So, you are aging into Medicare this year. Are you prepared to do that? Most are not and many mistakes are made that have a financial impact down the road.
- You work for a company with less than 20 employees and want to keep your current coverage. Under current CMS rules, you have to take Parts A & B because under this scenario Medicare pays first. If you don’t take Part B you will then be subject to a lifetime fine based on the current Part B premium which includes any surcharges due to income. The fine is 10% per year for every year you don’t have Part B and the fine is based on the current Part B premium and any surcharge due to income. If you are in this situation, you can only apply for Part B between January and March for a July effective date.
- You work for a company that has more than 20 employees. Under this scenario you only need to take Part A because your employer group health plan pays first so you don’t need Part B. (Part B is everything outpatient) What you need to consider is the cost of your group health plan; do you have a younger spouse who is not qualified for Medicare; what are the deductibles and max out of pocket under your group plan and most importantly, is your coverage considered creditable by Medicare? (The creditability is based on the employer’s drug plan. Does the drug part of the plan considered to be equal to or better than Medicare? If yes, you are fine but would advise you to annually get a creditable coverage letter because you will need it when you do on Medicare to avoid any late penalties. If the plan is not creditable you will need to get a Medicare drug plan.
- Does your company have an HSA as part of your group insurance? If they do, you cannot contribute after going on Medicare but you can use your HSA to pay your premiums or healthcare costs. This is critical to understand and avoid doing.
So now that the basics are out of the way, what type of insurance should you get?
- Consider your income while either working or retired. Can you afford the insurance? The Medicare Supplement plans are somewhat expensive so the cost and benefits should be considered before purchasing a supplement. The cost varies by plan but are $30-200 per month. There are 10 plans and each has a price range defined by insurance carrier. With these plans you can go to any Doctor or Hospital anywhere in the country as long as they take Medicare. With a supplement you will also need a separate drug plan. Take all these items into consideration along with your health to determine if the supplement is the way to go.
- If the supplement will ultimately be too expensive for you, consider an MAPD plan. They come in two flavors in Nevada; HMO and PPO. The HMO typically does not have a monthly premium but it requires you to use their Doctors and facilities in the plan. If you go out of network for anything other than an urgent or emergency situation you could be paying the entire bill. The HMO’s max out of pocket is $1900-$4000 depending upon the plan.
- The PPO might also be an option. Their premiums are usually $45-$130 per month and may fit your situation. You also need to understand the max out of pocket as it is typically $6000-$6700 annually.
You do have nationwide coverage but you need to understand that if you want to use their nationwide network you need to ask the following question or you could be out of network. Ask the provider if they take the MAPD PPO plan from (currently in Nevada) either Aetna or Humana? If they say yes, you are in network. If they say no, you can still use them but will pay higher prices. For many seniors this is an acceptable alternative to the Medicare Supplement but it does have some restrictions and you need to be aware of them.
- Lastly, you do need a separate drug plan if you buy a Medicare Supplement. There are 3 different type of plans to buy.
The Saver plan has a deductible which must be met prior to paying the fixed copays for your medications. CMS sets that deductible at $405 for 2018 but the insurance company may charge less if they want. The premiums monthly are $20-$40.
The Preferred plan does not have a deductible but has a higher monthly premium. That premium is $50-$90 per month. Watch out because sometimes the increased monthly premium could also mean a higher cost for your medications.
The Enhanced plan is the most expensive and used by someone who takes many medications. Their monthly premium is $100 or more per month.
The best way to determine which drug plan is best for you based on your needs is top go to Medicare.gov and input your drugs and review the 24 plans available in Nevada. It is complicated to do so and would suggest you meet with a Medicare broker who can guide you through the process.
As a Medicare broker, we can ask the right questions to guide you through the process. Medicare is complicated so let someone who knows the market provide the essential guidance so you get what you want and can afford.