By Deborah Jeanne Sergeant
If you’re approaching 65 and thus qualifying for Medicare, you may wonder why you should also pay for additional health insurance coverage.
Especially if you are in good health, do you really need all the bells and whistles?
Yes, you do.
“Everyone should have some kind of supplemental plan,” said Cynthia Scott, president of OMC Financial Services in Dewitt. “Do your research. There’s Advantage plans and other types. You should always go for the best coverage you can afford, even if you’re healthy. If you’re older, you never know what can happen. You can have an accident or develop some kind of a disease. You really have to be careful about skimping on your health insurance. I would not cut back on health insurance.”
Medicare Part C, also called “Advantage plans,” is offered through private insurance companies. They include standard Medicare and more, such as prescription drug coverage. Medicare covers about 80% of all claims. While that sounds like a lot, a hospital stay, surgery, and lifesaving procedures would still rack up sizable bills.
Another option is Medicare plus a Medigap policy.
“It’s a supplement of which there are various orientations, but in essence, they’re designed to offset the 20% that original Medicare doesn’t pay,” said Bill Chamberlain, managing partner of The Finger Lakes Group in Binghamton, Elbridge and Auburn.
The advantage plans are less expensive than Medicare plus a Medigap plan. Plus, participants still have to purchase Part D, which is prescription drug coverage.
“You can spend between $3,000 and $4,500 a year in premiums,” Chamberlain said. “With Advantage, there’s a zero premium plan and ones that give you a portion of your Part B premium. The most expensive Advantage plan runs about $125 a month or $1,500 per year.”
People typically go with Medicare plus a Medigap plan if they want to know exactly what their out-of-pocket expenses will be. Advantage plan participants must pay copays but have an out-of-pocket maximum, which is typically around $7,000 per person.
“For people in good health and with few chronic health conditions, Advantage is the better choice,” Chamberlain said. “With most Advantage plans, there are supplemental benefits added, like incidental dental, some vision coverage, a certain amount of over-the-counter medication per quarter, and meal delivery following extended stays in the hospital or in-patient rehab. Those aren’t benefits afforded to you with a Medigap plan. If you look at the statistics, the scale is shifting away from Medigap plans and toward the Medicare Advantage plans.”
People shopping for an Advantage plan should make sure that they find one where their current providers are included and their prescriptions are covered. HMO plans have a more restricted network; PPO plans allow for some coverage outside the network.
Chamberlain warned to not listen to celebrity-endorsed advertisements or solicitations for health insurance plans but to work with a professional.
Except for “qualifying events” such as retirement or moving outside the service area of one’s plan, participants must sign up during open enrollment and cannot change their plan until the next year’s open enrollment period, which is Oct. 15-Dec. 7.
“Never go without coverage,” said Randy L. Zeigler, private wealth adviser with Ameriprise Financial Services, LLC in Oswego. “It’s foolishness.”
Most of his clients who are 65 and no longer have employer-provided coverage go with Advantage plans. He encourages people to ask their county’s Office for the Aging to look at plans and also decide what plan fits their health needs.
“Any of us can experience injury or illness at any time,” Ziegler said. “You usually don’t get a warning six months in advance when you’re going to have an illness or injury, where you’ll need a more intense level of health care plan.”