Tag: Insurance Agent

Biggest Medicare Mistakes

Biggest Medicare Mistakes

The 5 Biggest Medicare Mistakes and How to Avoid Them

No one wants to make a mistake that will cost them hundreds (or thousands) of dollars down the road if they can help it! However, Medicare can be very confusing, and even very knowledgeable people can miss things. Here are the five biggest Medicare mistakes people make, and how you can avoid them!

#1 in Our Biggest Medicare Mistakes: Missing Enrollment Deadlines

Although the government gives us all a little wiggle room around each Medicare Milestone we pass, there are certain deadlines you must mind to avoid late penalties and inconveniences.

Original Medicare Coverage Deadlines

five biggest medicare mistakes and how to avoid them

You will need to sign-up for Medicare when you turn 65 if you are not already getting Social Security. You will be automatically signed-up for Medicare if you are getting Social Security. In addition, you will need to tell the government if you are delaying Medicare because of other credible coverage (such as an employers coverage).

You will have three months before your birthday to sign-up, the month of you birthday, and then three months after to sign-up. However, what some people do not understand, is that if you enroll after you turn 65, your coverage will not start until the first of the month after you enroll. This could lead to a gap in your health care coverage.

A NOTE ON CREDIBLE COVERAGE: Some people will delay Medicare coverage if they have a good health plan from their employer. This is usually okay, but there is an exception for small business employers to be aware of: If your employer has less than 20 employees, you will need to enroll in Medicare right away when you turn 65.

This is because when you work for a small business, their insurance will become secondary insurance and Medicare will be your primary payer. If this is the case, you will need to enroll right away in Medicare to avoid a penalty. (Also note that Cobra is not credible coverage.)

Medigap Guaranteed Enrollment Deadlines

The last Medicare Enrollment Mistake people make is missing their Guaranteed Enrollment period for a Medigap Plan. You will have six months, from the beginning of the month you first turn 65, to enroll in a Medigap plan with a guarantee to be issued a policy. If you apply after this window, you will have to go through medical underwriting. This means that companies have the right to deny issuing you a policy based on your medical history after your open enrollment is over.

It is important to remember that Medicare Advantage Plans have a different enrollment process than Medigap. The Medicare Advantage Annual Election Period is not for Medigap Plans. Which lead us right into Mistake #2…

Medicare Mistake #2: Not Understanding Medigap Plans vs. Medicare Advantage Plans

There are two main ways you can set up your Medicare Health Care Plan: Medicare Advantage (Part C) and Original Medicare with a Medigap Plan. You either have one or the other, not both. Both can be good ways to set up your health care, but not understanding how they work can lead to making on of our biggest Medicare mistakes.

We have a whole article on Medicare Advantage vs. Medigap Plans here. I suggest reading it if you are unfamiliar with the two plan types. Considerations with these plans include how you get your Prescription Drugs and how you want to budget your money. Cash flow can be different plan to plan with premium payments and out of pocket expenses to consider when making a decision. Your lifestyle needs and travel patterns also need to be considered when making a choice between MA and Medigap.

Mistake #3: Assuming Your Doctors and Drugs are Covered

We all know what assuming can lead to… mistakes! It is very important to make sure that your doctors are covered with the Medicare option you choose. The carrier will be able to help you confirm that you will be able to continue with your current doctor if you so desire. If you are working with an Insurance Agent, they will have the ability to do this for you as well.

Checking your drug options with a plan is also an important part of finding coverage. The government does make sure that at least two kinds of drugs are available per category of treatment. Moreover, carriers will have a process for you to make an exception for a drug not on its list (called a formulary). However, it makes for a smoother transition to check ahead of time to see what is covered for your specific needs.

Biggest Medicare Mistake #4: Assuming Medicare Covers Long-Term Care

It is a common mistake to assume that your Medicare coverage includes long term care – it does not. Skilled nursing facilities for recovery from a certain event are covered (and come with different co-insurances based on different plans). However, long term stays in assisted living and nursing homes are not covered. You will need to have a plan in place to cover these needs. Your planning may include, long term care insurance, IUL policies with long term care (or critical illness) riders, or self-insurance (paying cash).

Another option, for those that do not have a lot of resources saved up for retirement, is to “spend down” your assets to qualify for Medicaid to help you in paying for your care. However, I would not suggest this option for those that have the means to plan ahead for the level of care they desire or those that want to pass money on when they pass.

Biggest Medicare Mistake #5: Enrolling Directly with a Carrier

Ok, follow me on this one. When you first turn 65, you are bombarded with advertisements for different Medicare plans. Sometimes, it feels easiest to just pick up the nearest postcard and give that insurance company a call. Or maybe you have done your research on your own (which is just fine!) and decide to enroll directly with the carrier you want to go with. Here is where you should stop and consider this as a mistake.

Here is the problem: when you enroll with an insurance company for one of their plans directly, you have to deal with them alone. On the other hand, when you enroll with that same company through an independent insurance agent, you now have an advocate and support system to help you work with that carrier.

Here is how an independent agent helps:

  • First, if something goes wrong, you can call your agent for help! You are not on your own, and this is a big deal. As we all know, everyone can make mistakes – you, your doctor’s office, your insurance company. When these mistakes happen, you can call your agent for support and they can work with you and the insurance company to make sure you are taken care of.
  • Second, rates and plans change! A good independent agent will keep on top of industry changes and plan changes for you. They can stay on top of your premium rates and what might be new or changing in your area to make sure you always have the best coverage. You will not get this level of service when you work directly with a carrier.
  • Finally, you do not pay anything extra for working with an independent agent. They are still paid as an independent agent from Whichever company you are placed with at no charge to you.

Medicare Mistakes Summary

In addition to this article, another great resource is the Medicare and You book put out by the government. Since this is a large (120 page) document, we have created a Medicare and You User’s Guide for you to read and reference here.

In summary, you can avoid the biggest Medicare mistakes with a little research and a little help.

Reach out to a professional to answer any of your market specific questions and find out more about Medicare, Medicare Advantage, Medicare Supplements, and their differences here on MedicareLifeHealth.com.

Please follow us:
error
Medicare Advantage vs Medicare Supplement

Medicare Advantage vs Medicare Supplement

Medicare Advantage vs Medicare Supplement (Medigap): What Medicare Plan is Best for Me?

I am a firm believer that there is a good Medicare health plan out there for everyone. Moreover, there might even be more than one good choice out there for your situation. If there is more than one good choice available to you, you might be weighing your options right now – Medicare Advantage vs Medicare Supplement.

First, Let’s review your Medicare options:

Original Medicare (no supplement)

Certainly, stand-alone Medicare coverage is an option. You would still want to get Part D Prescription coverage. (There are penalties down the road if you do not get Part D or have credible coverage already and then want to get it later.) However, you would then be left paying your deductibles and 20% coinsurance out-of-pocket.

For example, with ONLY Original Medicare and NO supplement or MA plan, if you ended up having a major health event like a surgery, the 20% left that medicare doesn’t pay could still be thousands of dollars.

You would also have to go through medical underwriting with a private insurance carrier if you later want a supplement and you have missed your Guaranteed Issue time frame. You can always join a MA plan later, but only during a special enrollment period or during the Annual Enrollment Period (Oct. 15 – Dec. 7).

Original Medicare with a Supplement

With this option, you keep Original Medicare and add on a Supplement (Medigap) Policy with a private insurance company to help you in paying the pieces that Medicare does not. These costs can become large if you have a big medical event or a chronic illness. In this instance, a Supplement would protect you from “losing the shirt off your back”! You would also have a stand-alone Part D Prescription Drug Plan (or a plan that is considered “credible coverage”).

Medicare Advantage (MA/MAPD)

Finally, with a MA/MAPD plan you would replace Original Medicare with a bundled plan offered by a private insurance company. These often include a Prescription Drug Plan. (These are called MAPD plans, which are most the common plans). You still “have Medicare” with these plans. However, they are run by private companies who put together networks of providers and health facilities.

One question we hear a lot is, “can I have both Medicare Advantage and a Medicare Supplement?” No, you have one or the other. Not both, they do not work together and it is illegal for anyone to sell you both.

What are the Differences Between having a Supplement (Medigap) and having Medicare Advantage (MA/MAPD)?

Now, let’s do a breakdown of Medicare Advantage vs. Medicare Supplements. First, let’s look at the difference in care and the differences in cost. We are assuming you either have Medicare Advantage or Original Medicare with a Supplement (aka Medigap Plans).

Medicare w/Medigap Medicare Advantage
Care OptionsYou can go to any doctor that accepts Medicare already. Specialist referrals are not needed.You typically must visit doctors that are in the plan’s network if you do not want to pay extra. Specialist visits sometimes need a referral, depending on your plan. Click here to read more about plan structures (HMO, PPO, etc.)
ExtrasNASome plans include extra benefits such as hearing, dental, vision and fitness/wellness programs.
Monthly
Costs
Medicare Part A – usually premium free
Part B – Monthly Premium (based on income level)
Part D – Monthly Prescription Premium
Supplement – Premium dependent on which company & plan letter you choose
MAPD plans with Drug Coverage Included pays a monthly premium to the insurance company for all services. Some plans include the Part B Premium and some plans do not. Some plans have a $0 monthly premium option.
Out of Pocket CostsCosts can be very minimal depending on that Medigap plan you choose. There are high deductible options, and starting in 2020, the Part B deductible will have to be paid by everyone who is just aging into Medicare. Some plans have lower out-of-pocket costs than Original Medicare and all have a yearly limit on out-of-pocket expenses that are covered by Medicare.
Domestic TravelEmergency and urgent care are always covered in the US. You can use any doctor that takes Medicare in the US for routine visits. If you spend long periods of time traveling and need to see a doctor for routine visits whole out of town, this might be your best option. Emergency and urgent care are always covered in the US. You will have to use doctors in network for routine visits for them to be covered. Some insurance companies have large networks that can span several states, so make sure to inquire about how large the network is before you rule out a MA plan if you travel a lot.
Foreign TravelSome supplement plans cover part of the emergency medical fees you may use in other countries. Plans C, D, F, G, M & N have 80% foreign travel exchange limits. Plans do not typically have any over seas coverage.

Making Your Choice between Medicare Advantage vs Medicare Supplement

Now that you understand the basics of Medicare Advantage Plans and Original Medicare plus a Medigap (Supplement) Plan and know the significant differences between the two, it’s decision time.

First, I always recommend speaking with a licensed, independent agent that can help you in assessing all the various plan types available in your area. Every county has different options for MA/MAPD plans, and insurance carriers have different prices on the supplement plans you may be considering.

Second, it’s good to have an idea of what is important to you. You should be thinking specifically in regards to money and lifestyle when choosing a path.

Consider these questions when choosing between Medigap and MA Plans:

Do you plan on living in another place for a significant period of time during the year?

If you are a “snowbird” or are planning a longer vacation where a routine doctor visit may be necessary when away from your primary residence, then a supplement may be your best choice. Remember though, emergency / urgent care visits are covered with both types of plans.

However, if your travel happens to be international, Both Original Medicare and MA plans do not cover foreign travel, but some supplement plans (plans C, D, F, G, M & N) have 80% foreign travel exchange limits that will help off-set some costs.

What is (or will be) your cash flow situation in retirement?

Some retirees have pensions, social security and other payments (like annuities) that come to them automatically each month. Other retirees have less of these automatic infusions or smaller required distributions and prefer to leave as much of their cash in investments as possible. Finally, some retirees are on a smaller, fixed income. This might require them to consider cash flow very carefully.

In each situation, you will need to review how you are paying for your health services, as each plan offers different payment options.

Cash Flow with a Supplement:

With a supplement, you will have a set amount of money (that could be a larger sum than an MA plan) come out of your bank (and/or S.S./R.R. check) each month. This can add up when you consider it includes Part B premiums, Part D Prescription premiums, and your supplement premiums. However, if you chose a plan that covers everything Original Medicare leaves out, then you would not pay any other out-of-pocket fees for Medicare covered services.

Cash Flow with a MA/MAPD Plan:

With a Medicare Advantage plan, you will most likely have a smaller amount of money coming out of your wallet each month. You will most likely have an MAPD plan that includes your drug plan, as stand alone MA plans are becoming much more rare, and some plans even include Part B premiums. So, with a MAPD plan, you would be paying a MA premium and maybe your Part B premium each month. Moreover, there are sometimes zero dollar per month ($0/month) premium MA plans available. The costs then to consider and maybe budget for with MA plans is if there are any co-pays, co-insurances and deductibles with the plans. Each plan will be set-up differently, and each plan will also have a max yearly out-of-pocket limit.

Just like in any kind of insurance, Medicare plans are set-up to allow you to choose how much out-of-pocket expenses you incur versus monthly premiums you pay.

Looking at your budget and then talking through your options with a licensed agent will allow you to make the best choice for your situation.

How interested are you in extra benefits being included?

Finally, one more consideration is the other elements that round out your health insurance plan, such as dental, vision, hearing, etc. If you have a supplement plan, you will need to decide if you need these services, and if you do, are you wanting to take on insurance plans for them. You might decide to add on a stand-alone, or a plan that includes any or all of these common services (dental, vision, hearing).

Often times, Medicare Advantage plans will include these services as a part of their plan as an additional benefit which might save you money if you were planning on getting a stand alone plan or paying cash for these services.

Moreover, many MA plans will offer fitness or wellness services that are included at no additional cost. Sometimes this means you will not have to pay for a separate gym membership. Silver Sneakers is one example of a national program that is used by many MA plans to provide fitness and wellness services.

The Next Steps for Choosing Your Medicare Plan

As you can see, developing your Medicare Health Insurance Plan can be very involved, but I am confident you can do it! Having a professional to help you through the process is important. Please reach out to an independent insurance agent to review what is available in your area. They will be able to explain plans in specifics and answer your questions about Medicare Advantage vs Medicare Supplement.

Finally, Medicare.gov is also a good tool for answering your broader questions, and we also encourage you to comment on this page or contact us directly with any questions. Thanks!

Other Topics Related to Medicare Choices:

medicare advantage vs original medicare with a supplement - Medicare Life Health Pin
Please follow us:
error
What is Medicare Advantage

What is Medicare Advantage

Is Medicare Advantage Best for My Situation?

In this article, we look at what is Medicare Advantage (aka Medicare Part C). As we discussed in our Medicare 101 Post, there are two different Medicare paths. You will choose one when you are setting up your health care in retirement.

  • Path One = Original Medicare, Part A and Part B, with a stand alone Prescription Drug Plan (Part D) and an optional Medigap (Medicare Supplement) Plan.
  • Path Two = Medicare Advantage (Part C) that replaces Medicare Part A and Part B and typcially includes a Part D Drug Plan. These plans are offered by private insurance companies that you work with directly.

The Basics of Medicare Advantage

Medicare Advantage “bundled” plans are offered by private insurance companies (carriers). You use them IN PLACE of Original Medicare, but they are still Medicare. Moreover, they must include all the same Medicare services covered by Part A (hospital) and Part B (medical). In addition, almost of them include Part D (prescription drugs).

You will hear/see these plans referred to as MA plans, and MAPD plans when they include prescription drugs.

What is the Advantage to Choosing a MA or MAPD plan?

Medicare Advantage

The first advantage to these plans is that many of them have lower out-of-pocket costs than Original Medicare. Secondly, they often have extra benefits such as dental, vision or hearing that is not included in Medicare.

What are the Costs of a MA / MAPD Plan?

First, remember that most people have Medicare Part A “premium free”. (See this page on the medicare.gov website if you are wondering if you are in the “most people” category.) Second, remember that most people also pay a monthly premium for Part B. However, some Medicare Advantage plans will pay all or part of your Part B premium.

There may be many (or just a few) different MA and MAPD plans available in your area. They will all be set up differently and cost different prices from carrier to carrier. We suggest finding an independent insurance agent/broker that can compare different plans, carriers (insurance companies) and prices. They will help you pick a plan that fits your lifestyle and financial needs. Please note, there are often plans out there that have low or even $0 monthly premiums.

In addition to whether or not you pay a monthly premium with a MAPD plan, each plan will have a different set up for out-of-pocket costs:

You will need to decide what plans fit well with your monthly cash flow situation in addition to how often you need medical products and services.

How do MA and MAPD Plans Work?

Insurance companies usually set-up Medicare Advantage programs as a PPO or HMO networks. You might be familiar with this style of network plan insurance if you had (have) one from an employer or even from the open marketplace.

Typically, you will need to use doctors in your MA plans network. (Unless it is an emergency, or unless you are willing to pay extra to go “out-of-network”). If you have providers you want to keep, ask them if they are part of a network you are considering. In some MA/MAPD plans, you may also need referrals to see specialists. These are all plan specific requirements. You will need to look all these requirements prior to making your MA decisions.

HMO and PPO plans have much more robust networks now than plans from the past. Most people can find a plan that is large enough/flexible enough to work with their lifestyle. This is true even if they travel frequently in retirement. I recommend talking to a licensed agent to make sure you understand how the plans work.

When Can You Sign-up for a Medicare Advantage Plan?

If you are a US citizen with both Part A and Part B Medicare coverage, you can join MA plans in your area during these times:

  • During your Initial Enrollment Period (IEP): Just like joining Original Medicare, you can join a MA plan during the 7 month period (3 months before the effective date of Medicare Part A and B, including the month Medicare begins, and then 3 months after) of time that you are turning 65.
  • During the Annual Enrollment Period (AEP): October 15th to December 7th, is when you have the opportunity each year to join an MA/MAPD plan. Your new coverage will begin January 1st.

    *OEP – As of 2019, if you are already in a Medicare Advanage plan, you can also change plans during AEP, or you can switch plans once (or switch back to Original Medicare) during Open Enrollment Period – January 1st to March 31st.

Other things the US Government would like you to know about MA Plans:

  • Emergency and Urgent Care is always covered with MA plans.
  • MA plans cover all Original Medicare Services and carriers must follow all Medicare rules.
  • MA plans may have extra benefits like vision, health, dental and other fitness/wellness programs.
  • You can join a MA plan with pre-existing conditions (except for ESRD, which is a special case and has other options).

Who can Help You with a Medicare Advantage Policy?

Just like a supplement, you can compare these plans online, but I suggest you talk to a professional, independent insurance broker that can help you compare plans. It won’t cost you any more money to use a professional, and Medicare Advantage Plans can be overwhelming when you are trying to pick one, especially if there are many offered in your area.

Remember, independent agents work for you (not the carriers), and having an actual person to help you in communicating to insurance carriers and keeping you updated each year is very valuable. This is something you do not get if you sign-up directly with a company online.

If you are in the state of Nebraska and you are looking for an agent to help you in any area of Medicare, Health or Life Insurance, please get in touch with me here.

Where to go next:

Medicare Advantage Part C - Medicare Life Health Pin
Please follow us:
error
Social media & sharing icons powered by UltimatelySocial