Annual Enrollment Period is in full swing! This is your opportunity to make changes to your Medicare plan that will better suit your needs in 2019.
Recently, I was joined by Medicare experts Kathleen Brennan and Kevin Tinagero of 360 Insurance Services, who shared some crucial information on where to begin when it comes to your Medicare plan.
To begin, why don’t we start with the basics.
What is Medicare?
Medicare is a federal program that provides health benefits to those 65 and older or those younger if suffering from disabilities. Medicare was designed to replace your health insurance when you turned 65. If you are 65 currently, you are eligible to enroll in Medicare.
Original Medicare is comprised of parts A and B. Part A covers hospitals and skilled nursing, and it comes free as long as you've worked to contribute it into Medicare for 40 quarters and paid the deductible of $1340, which covers you for 60 days.
After 60 days, you get into some pretty stiff co-pays that start at $335/day and go as high as $670/day.
Part B is designed to cover doctors. It comes with an initial fee (currently $134) which provides you with 80% coverage. While 20% exposure may not seem like a lot, as the cost of delivering care becomes more expensive, that 20% can become sizeable.
When to enroll
There is an enrollment window of seven months on your 65th birthday, think three months prior, the month of, and three months following your birthday. If you fail to enroll during this period, you’ll end up with a 10% penalty you’ll pay every year (think 10% of $134 every year, with premiums increasing).
How to enroll
The initial step to enrolling in Medicare is to activate your social security, which will activate Part A and Part B. The second step to really getting a grasp of your Medicare coverage is to find an advisor who is a broker with a thorough understanding of the Medicare options. While Medicare Part A and Part B may not seem too difficult to grasp, we’re heading into the complicated world of Supplement and Advantage Medicare.
Supplement, Advantage, and Prescription Coverage
The Supplemental Plan
The Supplemental Plan is more commonly known as the Medigap Plan. The gap in the title may give this away, but supplemental coverage fills in the “gaps” from the other plans (remember that 20% from Part B we mentioned earlier?). Currently, there are 10 different versions of the Medigap plan, each representing a standardized service. This means if you opt for Medigap plan C, the benefits will be the same through every insurance company in every state. Most doctors accept Medigap, so you can likely still retain your family physician.
The Advantage Plan
The Advantage Plan works differently than the Supplemental Plan as it actually replaces your original Medicare by taking Parts A and B and combining them into one.
The Advantage Plan more closely mimics a group plan you likely received from your employer. However, there are some limitations as you may end up paying more for an out of network provider, and the network coinsurance may be more than you’d be seeing on a supplemental plan.
Our experts Kevin and Kathleen highly recommend you speak with someone before signing up for the Advantage Plan as it can get pretty murky and be difficult to know which plan is best to meet your personal needs.
Prescription Drugs or Plan D
When it comes to finding the right prescription drug plan, it’s likely time to call in the experts. All the plans vary, and depending on what medications you’re currently (or foreseeably) going to need will determine what prescription plan is best for you. What’s right for you may not be right for your spouse, so there is no blanket, one all solution. Even the premiums for the same coverage can differ depending on the provider.
There is no cost to working with an advisor (they’re compensated through the insurance companies), and they can help you determine what the best next steps are.
While this information may not be intimidating, I assure you that there are many more factors involved in the intricacies of Medicare.