It’s no wonder Las Cruces seniors may make poor choices about their healthcare plans, which can be disastrously expensive since the older we get. Access to health coverage is one of the primary reasons that the average age at which people retire is going up explains Kiplinger’s recent article, “Yes, You Can Sign Up for Medicare While You’re Still Working,” . Many seniors who keep working past 65 don’t understand they can sign up for what is often more affordable Medicare coverage, even while they’re still employed.
When to Consider Medicare Even if You Still Have Employer Health Coverage
Most working seniors don’t have to enroll in Medicare. It’s not required that all seniors make the jump as soon as they hit 65. However, there are some situations where it’s mandatory. It is important to be aware of these exceptions to ensure that there are no gaps in your coverage. If you delay your signup, you might end up paying for it: your small company’s group plan can deny your claims if they find you’re eligible for Medicare. There are also financial penalties for late enrollment, so if you work for a small company, you must be ready to make the leap to Medicare coverage, regardless of your retirement plans. Working with Las Cruces E-Law firm can help you create a plan for handling your Medicare and long-term care decisions before you turn 65, thereby streamlining the transition off of your employer-sponsored health insurance.
Medicare Plan Selection: What Are Your Options?
Hesitation and misconceptions about Medicare prevent Las Cruces senior workers from shopping for better health coverage plans. Factors seniors should consider when selecting a Medicare plan include costs, coverage, additional health coverage, prescription drugs, doctor and hospital choice, quality of care, and travel.
A recent article from The Wall Street Journal, “The 5 Biggest Mistakes People Make When Picking a Medicare Plan,” takes a look at the mistakes people make, how to make better choices and which plans are recommended.
Original Medicare, which the government offers, has three parts: A, B, and D.
- Part A covers care for inpatient hospital services, among other things.
- Part B is for physician services.
- Part D is for prescription services.
Original Medicare includes Medicare Part A (Hospital Insurance) and Part B (Medical Insurance). You aren’t automatically enrolled in Part D—you must proactively select this plan covering prescription drugs. You have only 63 days after your initial enrollment in Medicare to enroll in Part D. If you miss this window and don’t have any other drug coverage, your Part D premium will be permanently higher.
The appeal of traditional Medicare is the ability to visit any hospital, doctor, or healthcare provider without a referral or prior authorization of services. If you have doctors you trust, do a lot of domestic travel, need care in different places, or think you might benefit from a treatment a private insurer may deny, this is your best choice.
Many people don’t even consider the options when choosing Original Medicare. Instead, they allow it to be chosen for them. If you claim Social Security before age 65, which nearly half of Americans do, the Social Security Administration automatically enrolls you in traditional Medicare when you turn 65. It’s the path of least resistance. However, this might not always be the best fit.
Medicare Premiums for Part A and B Vary
The flexibility of the plan comes with certain costs. Part A premiums are often zero for those who have worked for at least ten years. However, Part B carries premiums based on household income. If your household modified adjusted gross income exceeds about $370,000 (or individually more than about $180,000), those premiums can rise to more than $500 a month per individual.
With Original Medicare, a hospitalization has a $1,600 deductible. A hospital stay longer than 60 days comes with a $400 co-payment daily, and a skilled nursing facility stay of more than 20 days will cost $200 a day. You’ll also be responsible for 20% of the Medicare-approved cost of physician services during the hospital stay.
Medicare Advantage Plan
Carefully consider the costs of Medicare Advantage plans when making your Medicare plan selection. Medicare Advantage is an alternative to Original Medicare. First, you sign up for Parts A and B, and then you can sign up for a Medicare Advantage plan, also known as Part C. This option is a bundle of A, B, and D, delivered by private insurance companies approved by Medicare. Some plans do not include prescription drug coverage, so you must check carefully.
Medicare Advantage companies are paid a fixed amount of money monthly by the government, so they have an incentive to reduce costs by providing better coverage for medicines that will keep you out of the hospital, However, there are coverage issues. Zero premiums apply to Part A and D, meaning you still pay the Part B premium. The cost savings on out-of-pocket costs apply only if you stay in network. If you go out of network, your care can quickly become extremely expensive. The in-network and out-of-network distinctions limit where you can get your medical care. If you need access to a certain hospital or healthcare provider and they are not in the network, there may be better options for you.
Medigap Supplement Plans
Medigap is supplemental insurance sold by private companies to pay out-of-pocket costs of Original Medicare (like the 20% coinsurance or cost-sharing in Parts A and B). Each Medigap plan (plans A to N) offers a different level of coverage that demands careful consideration in terms of weighing which plan best fits your needs. Nearly 10% of those who chose Original Medicare don’t have supplemental coverage.
Finally, many people feel this is too confusing to manage on their own, so they turn to a broker, which makes sense. You should know brokers work on commission, receiving payment from insurance companies. Make sure to ask your broker how they are paid, ask about the plans they are not telling you about and whether or not the discounts you are being offered at sign-up will go away in a year or so.
If you have questions about how to choose the right Medicare plan while preparing for future health care and long-term care costs, request a consultation with Las Cruces Elder Law Attorney Michele Ungvarsky. She can help ensure your Medicare plan selection is thoughtful and considers all elements of your personal and financial wellbeing.
Reference: The Wall Street Journal (Aug. 15, 2023) “The 5 Biggest Mistakes People Make When Picking a Medicare Plan”