When it comes to Medicare one thing is certain – it is complex. Helping a first-timer understand the various program parts and coverage options usually requires at least an hour-long, face-to-face meeting. Even renewals for Medicare Advantage and drug policies offer great complexities. So, for those of you who are turning 65 soon or are trying to sort out your current plans by the December 7th 2014 renewal date, we thought it might be helpful to provide a basic overview of Medicare:
Complete medical coverage with Medicare comes in three parts: Part A, which you automatically receive once you turn 65; Part B, which either comes automatically if you get social security benefits or you have to apply for; and Part D prescription drug coverage, which you must apply for. Parts A & B provide coverage for your medical care, but come with co-pays, deductibles and unlimited out-of-pocket expenses. To protect yourself from the potential high expenses from these gaps in coverage, you will have to decide between either buying Medigap coverage through traditional supplemental policies or joining the Medicare Advantage (or Part C) plan.
The main benefit of a traditional supplemental policy is that it offers comprehensive, stable coverage. Your benefits will not change from year to year, but your rates will go up every year. Many people prefer this option for both its reliability and quality of care. However, it can lead to a higher fixed monthly cost. We help our clients through the cost-benefit analysis of each policy to help them find the best option for their medical situation.
Medicare Advantage, or Part C, is an ‘all-in-one’ Medicare plan. It offers its own medical coverage, usually with included Part D drug coverage. While Part C plans tend to have lower monthly premiums and place a cap on out-of-pocket expenses, they require co-pays. If you are a healthy person, Medicare Advantage can be a cost-saver, as you most likely will not spend your monthly rate savings on co-pays. These plans change every year, so you will have to review your coverage each fall to make sure it still applies to your medical situation.
Drug coverage is the final part of the Medicare mix. As mentioned before, Medicare Advantage usually includes a Part D drug policy. However if you choose the traditional Medicare option and a supplement, you will have to find a separate policy within the Part D portion of Medicare. Even if you feel you do not need this type of coverage, you should carry it. You may run into the situation down the road where you are unexpectedly prescribed a very expensive medication. If you then decide you would like to add coverage, you will be charged a penalty.
Fortunately, you do not have to wade through the myriad of Medicare options on your own. WIFS advisors can help you understand the different coverage offerings and choose the right mix for you. For an appointment, send us an email, or give us a call at 317.663.4138.
