When you are turning 65, you most certainly get inundated with information from all different sources – direct mail, phone calls, TV ads, unsolicited advice from friends and more. So, how do you sort through the noise to find the right course of action for you? Turning 65? How to Pick a Plan
Medigap vs. Medicare Advantage
The first, and really most important, choice that you will have is whether you will stay with traditional Medicare and purchase a Medigap policy to fill in the “gaps” in Medicare or whether you will opt for a Medicare Advantage plan. The differences in Medigap and Medicare Advantage are numerous, so it is crucial to understand them and make an informed choice when looking at these two options.
To briefly address those differences, Medigap plans pay AFTER Medicare and “supplement” Medicare; Medicare Advantage plans pay INSTEAD of Medicare. Medigap plans do not have networks (can go to any doctor nationwide that takes Medicare); Medicare Advantage plans are usually HMOs or PPOs and do have networks and sometimes require referrals to see specialists.
As far as costs, Medigap plans typically have higher premiums than Medicare Advatnage plans in most areas of the country. But in terms of out-of-pocket costs, Medicare Advantage plans have a menu of co-pays and deductibles for each different service or procedure, whereas the out-of-pocket costs on Medigap plans are more limited and defined. Turning 65? How to Pick a Plan
The last consideration when comparing these two is future insurability. When you go with the Medicare Advantage plan initially, you may have to go through underwriting in the future if you decide you want to switch to a Medigap plan. Some people choose to start with Advantage plans, since they are in good health, then later try to switch when they have more health problems. Unfortunately, it can be difficult to do that. Turning 65? How to Pick a Plan
Next Step: Compare the Plans
Once you decide which route you are going to – Medigap or Medicare Advantage – you can start to compare the plans. Turning 65? How to Pick a Plan
Medigap plans are relatively straight-forward to compare. They all are required go by the standardized coverage chart. So, for example, a Plan G (usually the best deal) with one company is the exact same as a Plan G with another company. See more about what Plan G offers.
Comparing Medicare Advantage plans can be more difficult as there are more variables, but that makes it even more crucial to do. Some things you need to consider when comparing Medicare Advantage programs are the network of doctors/hospitals, the coverage for your specific medications, the premium for the plan, the co-pays for different medical services and procedures, and the rating and history of the plans you are considering. You can compare all the Medicare Advantage plans on Medicare.gov. Turning 65? How to Pick a Plan
Pick a Plan and Re-Evaluate Over Time
One of the big mistakes that I see with people on Medicare is that people choose a plan at age 65 and then stay on the same plan the rest of their lives. In most cases, this is not advantageous for you.
One, the plans change over time. With Medicare Advantage plans, they change in terms of cost, coverage, networks, and more. With Medigap plans, while the coverage can never change, the costs do change over time. Turning 65? How to Pick a Plan
It is crucial that, once you make your initial selection of a plan, you re-evaluate your needs over time to make sure you have the best plan for you. Turning 65? How to Pick a Plan
