Updated: May 31
Individuals within six months of turning sixty-five are the most heavily marketed group when it comes to Medicare. I may need to start giving my future clients a jumbo mailbox as a birthday gift when they turn sixty-four. The mail man will be able to stuff the vast amount of marketing pieces in the mailbox with ease over the next year…problem solved! In all seriousness, choosing the right Medicare coverage can be the difference between thousands spent or thousands saved. We all know healthcare is one of the biggest expenses in the latter years of life. I’m afraid these costs will not be going down anytime soon.
There are a few concepts you need to understand before you ask yourself these questions. You need to understand the basics of Medicare. Original Medicare consists of Medicare Part A and B, you are going to need both. Most people will qualify for both parts when they turn sixty-five. You also need to understand prescription coverage under Medicare Part D. Fortunately, we have covered these topics in depth in previous blog posts. If you need to have a clearer understanding of these topics, click on the links in this paragraph to read more in depth.
There is a fork in the road decision to be made when beginning Medicare for the first time. Do I want a Medicare advantage plan or Medicare supplement? Most people will fall into one of these two categories. I know there is additional coverage options outside of these two, but they are the exception.
A Medicare Advantage plan takes the place of original Medicare and most often includes Prescription Part D. It is an all-in-one plan, there is one card for all Medicare services. Most plans have low or no premiums and additional benefits such as dental and vision. You will have networks, co-pays, co-insurance, and referrals needed in some cases. It works a lot like a conventional health plan you would have before you come on to Medicare. Learn more here.
A Medicare supplement pays after original Medicare. In general, a supplement covers the twenty percent that Medicare part B does not, it also covers the in-patient hospital deductibles that Medicare part A does not. You will have minimal or no medical bills with the right supplement plan. They also give you freedom from doctor networks. The tradeoff is the cost, Medicare supplements have higher monthly premiums. Prescription Part D, dental, and vision are excluded as well. Learn more here.
You should now have a solid grasp on original Medicare and your two options for Medicare coverage. Let’s explore five questions to help you determine which way you should go.
Am I on a fixed income with a tight budget?
We all feel the costs of food, energy, and just about everything going higher these days. This is starting to stretch many seniors on fixed income. You may want to consider a Medicare Advantage plan if there is no wiggle room in your budget. Most Medicare Advantage plans have low or no premiums. This works out well for people on a fixed income, especially if they are above average health. You can receive a great plan that will usually have a zero-dollar co-pay at your primary care doctor. Many preventive benefits are included for no cost as well. Not to mention all the additional benefits such as dental, vision, and much more. Medicare supplements usually cost right around $100 per month. The premiums will go up as you get older. The premium for a Medicare supplement is not the only monthy premium that you will need to pay. You will need to add a Part D plan to cover your prescriptions. The average Part D plan is around $30 a month. $130 a month in premiums can be a deal breaker for some on a fix income. Add another $40 to $50 if needing a dental and vision plan. It can easily add up to over $200 per month. If your health is above average and you’re on a tight budget, you may want to consider a Medicare Advantage plan.
Do I have substantial retirement income?
If the answer is yes, please just go with a Medicare supplement. You won’t feel the pinch of $200 premiums for your supplement, Part D, and vision and dental. You eliminate so many complexities with a supplement. You will have true freedom from networks, co-pays, and co-insurance.
Do I plan on traveling or living in two different locations?
Medicare advantage plans are local for the most part. They usually work best within the state the beneficiary resides. Smaller companies may only work within certain heath care systems that are local to the area. Going out of network while traveling may cause higher costs or denial of claims altogether. The exception is an emergency, there is no out of network for emergency situations. This is a rule set in place by Medicare. With that being said, Medicare supplements have no networks or referrals. You can go to any doctor or health system in the U.S. that takes Medicare. It’s that simple, a supplement is the best option for those on the move.
Do I have below average health?
I will always recommend a Medicare supplement if someone is struggling with their health. There are two reasons for this. A supplement pays for most or all copays and coinsurance that Medicare does not, this is the first reason. The second reason being there is no medical underwriting when first beginning Medicare. Medicare beneficiaries turning sixty-five have six months to choose a supplement based solely on age and not health. After six months, you may be turned down or have a higher rate due to health conditions. Heart disease and cancer may be an automatic disqualification. A person with severe illness may never qualify for a Medicare supplement outside of the initial six-month enrollment period. If you have below average health and can afford the premiums, go with the supplement.
Do I need extensive dental work done?
Medicare supplements do not cover dental. Medicare advantage plans may cover dental, some better than others. There have been a few major companies that have increased dental coverage within their Medicare Advantage plans for 2022. Two thousand dollars of dental per year included in a Medicare Advantage plan is not abnormal. Dental coverage included in a Medicare advantage plan is better coverage than a stand-alone dental plan. Most stand-alone dental plans have a three to six month waiting period for major procedures such as crowns or bridges. Stand-alone plans usually only cover fifty percent of the cost as well. If your budget is tight and you need dental work done, you may want to consider a Medicare Advantage plan.
There can be more to consider when choosing which option is best. These five questions can give you a good base line for a solid decision, but you may need to discuss your situation with a Medicare guide. Please reach out to me If you need further guidance on your situation. Medicare plans can be different depending on what county you live, so it’s always best to talk to a local professional. NC Senior Solutions was founded exclusively to help Medicare beneficiaries in North Carolina. We know Medicare and North Carolina! Feel free to visit ncseniorsolutions.com to contact me or learn more.