Do you want to make sure you choose the best Medicare plan for 2024?
Well, pay close attention to this article because you want to make sure you get this right!
When it comes to Medicare, everyone needs clarity on three fundamental principles:
- Enrolling at the right time.
- Opting for the appropriate coverage.
- Securing the best cost.
In this guide, I’ll explain six easy-to-follow tips to help you navigate these decisions and find your ideal Medicare plan.
**1. Timing Is Everything**
Understanding when to enroll in Medicare is crucial. The general misconception is that everyone should join Medicare at 65. While that’s true for many, it isn’t a universal rule.
Do you need to enroll at 65?
If you’re covered by any of the following, enrolling at 65 isn’t optional:
– ACA plans
– COBRA insurance
– Work for an employer with less than 20 employees
Who Can Wait Beyond 65?
Those still employed (or have spouses who are) at a company with 20 or more employees can delay their Medicare enrollment. However, there are considerations to keep in mind:
– If you enroll in Medicare Part A, you can no longer contribute to your Health Savings Account (HSA). If you have a significant employer plan with an HSA, it may be better to postpone enrolling in Part A to keep benefiting from your HSA contributions.
Conversely, if you don’t have an HSA, enrolling in Medicare Part A is fine (and recommended). However, enrolling in Part B may not be necessary if your workplace plan offers better coverage at minimal cost.
- The Initial Enrollment Period
For those starting Medicare at 65, the Initial Enrollment Period (IEP) is critical. Spanning seven months, this window allows ample time for enrollment. For instance, if you turn 65 in July, your IEP starts three months prior in April and extends until three months after in October.
If you’re already on Social Security, they will automatically enroll you in Medicare during your IEP. Expect to receive your Medicare card approximately 90 days before your 65th birthday.
**Self-enrollment Tip:**
Enrolling during the first three months of your IEP means your coverage starts the month you turn 65. Use the My Social Security portal at SSA.gov for a streamlined enrollment process.
Here’s a video on how to enroll through SSA.gov.
3) Special Enrollment Period (SEP)
If you’re still covered by a group plan and work for a company with 20 or more employees, there’s no immediate rush to enroll in Medicare. However, if you decide to jump aboard, ensure it doesn’t conflict with any Health Savings Account (HSA) benefits you might enjoy.
The crux lies in the ‘Special Enrollment Period’ or SEP, designed for folks who didn’t hop on the Medicare train at 65 because they had other work-related health coverage. Here’s a scenario to elucidate:
Imagine your birthday is on July 10th. To qualify for SEP, you’d need to demonstrate that since your eligibility for Medicare at 65, you’ve had continuous, credible work-related insurance coverage. Say, if you want to start Medicare two years later at 67, you’ll need to verify you’ve been insured for those two intervening years without any gaps. Note: COBRA doesn’t count as credible coverage.
The procedural aspect involves two forms:
- L form: Filled out by your employer, this form verifies your continuous coverage. Changed jobs after turning 65? You’d need one form from each employer.
- B form informs Medicare when you wish to start your coverage. For instance, if your current plan ends on June 20th, you’d request your Medicare to kick in from July 1st.
4) Making the Right Choice
After deciding when to start Medicare, you’re faced with choosing the optimal plan. Remember, once you’ve registered in Parts A and B, you have two main pathways:
- Medigap (Medicare Supplemental Plans): This private health insurance fills the voids that original Medicare doesn’t cover. For instance, Medicare has several “gaps” in coverage:
-
- Part A (Inpatient): Includes a deductible and coinsurance related to extended and skilled nursing stays.
-
- Part B (Outpatient and Doctor Services): Involves a minor deductible, coinsurance, and excess charges.
- The original Medicare doesn’t shoulder everything, especially outside preventive services. Therefore, you’ll inevitably hold bills post-hospitalizations, doctor consultations, outpatient surgeries, or MRIs.
Enter Medigap. Most folks today opt for the G plan, which addresses five Medicare gaps. The one gap left? The Medicare Part B deductible, which resets every January.
As we dive deeper into Medicare, it’s clear that not all plans are created equal. Some distinctions matter; understanding these can mean the difference between maximum coverage and unexpected out-of-pocket costs.
Medigap Plans: N & G
- Plan N: Often seen as a cost-effective alternative, Plan N covers four of the six known Medicare gaps. Here’s what you need to be aware of:
-
- B Deductible: This isn’t covered. Annually, you’re responsible for this charge.
-
- Excess Charges: If your doctor charges over the Medicare-approved amount, these additional costs must be covered.
-
- Copays: Expect a $20 copay for doctor visits and a $50 copay for ER visits.
- Given these gaps, Plan N usually offers a lower premium than Plan G.
- Plan G: More comprehensive than Plan N, Plan G covers five of the six gaps. The one thing you’re on the hook for is the Medicare Part B deductible, which is an annual charge.
With both plans, remember that you’ll need to choose a separate drug plan tailored to your medications and preferred pharmacy. This drug plan can be changed annually if a different one suits your needs better.
Medicare Advantage Plans: The C Plan
Medicare Advantage, or Plan C, is a whole different ball game. While it might seem complex, the fundamental distinction is simple:
- Replacement Plan: Once you opt for Plan C, your Medicare A and B benefits are replaced by this plan. Instead of Medicare, a private insurance company now manages your coverage.
- Medicare B Premium: Regardless of whether you’re on the traditional Medicare setup or choose a Medicare Advantage Plan, the Medicare B premium remains a constant. Typically, this is $148.50/month (though this might vary based on your circumstances). This amount is often deducted directly from your Social Security check. You can be billed quarterly or opt for a bank draft if you’re not on Social Security.
The choice between traditional Medicare with a supplement (like Plan N or G) and Medicare Advantage (Plan C) boils down to personal preferences, financial considerations, and healthcare needs.
Medicare, with its myriad of options, offers flexibility. Yet, this can sometimes lead to confusion. Whether you opt for traditional Medicare supplemented by Plan N or G or decide to go the Advantage route with Plan C, it’s crucial to understand the implications of each. After all, your health and financial well-being are on the line. It’s always a good idea to seek advice, compare options, and make the most informed choice for your unique situation. Still, it’s not as open as the Medigap system.
5) Network Limitations:
- Medigap (Supplemental Plans): With these plans, you’re generally free to see any provider that accepts Medicare. This provides an expansive reach across the country and typically results in fewer restrictions.
- Advantage Plans (Plan C): These plans work within network systems. Depending on the plan, you might be in an HMO or a PPO:
-
- HMO (Health Maintenance Organization): More restrictive, you typically need to see primary care physicians (PCPs) and get referrals for specialists within the network. If you see a doctor outside the HMO without an appropriate referral, the plan might not cover the costs, leaving you to pay out-of-pocket.
-
- PPO (Preferred Provider Organization): Offers more flexibility. While you’ll get the best rates from in-network providers, you can see out-of-network providers at a higher cost. No referrals are needed to see specialists.
Comparing Costs and Flexibility:
- Medigap: Offers predictability. You pay premiums, but your out-of-pocket costs for covered services can be minimal. It suits those who prefer budget stability and broader access to providers nationwide.
- Advantage Plans: Offer potential cost savings, especially if you don’t use medical services frequently. However, there’s more cost uncertainty because of copays and coinsurances. The added perks, such as dental and vision allowances, are enticing. However, the restricted networks may only suit some, especially those who travel frequently or have preferred doctors outside the plan’s network.
So, when we decide which medicare plan is best for seniors in 2024?
Follow this simple outline…
6) Medicare Advantage Plans vs. Medigap Policies:
- Premiums and Costs:
-
- Medigap: Requires a premium (ranging, as per the example, around $80-$140 monthly). It covers gaps in Original Medicare, which means fewer out-of-pocket expenses.
-
- Medicare Advantage: Usually has a zero or low monthly premium beyond what you pay for Medicare Part B. Instead, you pay co-pays, coinsurances, and possibly deductibles. There is a max out-of-pocket limit (ranging from $3,000-$10,000 annually).
- Provider Networks:
-
- Medigap: This can be used with any provider that accepts Original Medicare.
-
- Medicare Advantage: Uses a network system, either HMO or PPO. You must check if your provider accepts your specific plan.
- Costs in Serious Illness:
-
- Medigap: Your financial liability is limited due to the premium, making this option potentially cheaper if you face a severe illness.
-
- Medicare Advantage: You assume costs until you reach the max out-of-pocket, which can be costlier if you fall seriously ill.
- Pre-authorizations:
-
- Medigap: No pre-authorizations are required. You get it if your doctor recommends a service and Medicare covers it.
-
- Medicare Advantage: Many services may require pre-authorization. The plan has a say in your healthcare services.
- Duration & Flexibility:
-
- Medigap: Lifelong as long as you pay the premiums. It’s tied to you, not the location. So, if you move states, your Medigap policy moves with you.
-
- Medicare Advantage: Yearly contracts tied to a service area. If you move out of the service area, you need a new plan.
- Prescription Drugs:
-
- Medigap Doesn’t include prescription drug coverage; you choose a separate plan.
-
- Medicare Advantage: Most plans come with embedded drug coverage.
- Enrollment & Eligibility:
-
- Both plans have windows around your initial Medicare enrollment where you can sign up without health questions (for Medigap, six months before and after the month you turn 65).
-
- After these windows, in most states, if you want to switch from Medicare Advantage to Medigap, you might face medical underwriting, which can deny coverage based on health conditions.
The bottom line is both options have pros and cons, and the right choice depends on individual preferences, health conditions, financial situation, and future planning.
Choosing between these two options is a decision that hinges on individual needs, budgets, and preferences. Some may prioritize Medigap’s flexibility and broad access, while others lean towards an Advantage Plan’s potential savings and added benefits. Before deciding, assessing your healthcare needs, financial situation, and comfort level with network restrictions is crucial.
Always remember, no matter which route you take, staying informed and understanding your coverage is the key to maximizing your Medicare benefits.
That’s where we come in! You don’t have to figure this out yourself because we’ve already done it, and we can help you determine the best medicare plan for you.
