Your Financial Future: Understanding Medicare
We are seeing many ads for Medicare policies on television, and your mailbox may be filling up with solicitations from different insurance companies.
This is because Medicare open enrollment starts in about two weeks. This happens every year between Oct. 15 and Dec. 7. This is when anyone covered by Medicare is making choices for their 2021 coverage.
Let蘑菇视频 discuss a few important facts about Medicare first. Medicare is the national program for all Americans age 65 and older. Everyone must go on to Medicare at that age unless they or their spouse is covered by an employee plan with creditable coverage and twenty or more employees. If you do not start coverage at the right time, you must pay a monthly penalty that will continue for the rest of your life. Original coverage begins when you turn 65 or lose group coverage based on your or your spouse蘑菇视频 work. Medicare is an 80/20 plan with lots of deductibles. Because of this, most people have some kind of supplement to help cover the extra charges.
Now let蘑菇视频 talk about the two types of options you will be considering during open enrollment. One type is an Advantage plan. These plans can range in cost from zero to several hundred dollars per month. Sometimes people wonder how you can get coverage for no cost. These plans receive payment from Medicare to insure your health.
They offer a network of medical providers you may visit, and every network is required to have all medical specialties in their network. While plans differ in benefits, it is not unusual that you can visit your family doctor at no cost. There may be a small fee to see a specialist, and you could incur some other out-of-pocket cost. These plans often offer extra benefits that Medicare does not cover. These might include eye glass coverage, hearing, dental and gym memberships. Most plans include some prescription coverage. Some insurance agencies do not offer these types of policies because they require additional training and testing.
The second type of supplement is a Medigap plan. There are 10 different plan levels, typically designated by alphabet letters. All F plans must cover the exact items. There can be different prices depending on insurance company. Plans F and G cover the most deductible and co-pays. With these policies, Medicare from the government is paying most of the cost and these Medigap plans fill in all or some of the gaps.
Medigap plans do not provide any of the extra coverage offered by Advantage plan and you usually have to buy a separate prescription plan. The costs vary from over $100 to several hundred. The main benefit of these types of policies are that they have the biggest network of providers. You can see any doctor in the country who accepts Medicare and is accepting new patients. It is also a consideration for people who go to the doctors often. These policies sometimes go up in cost as you get older. To avoid adverse selection, these plans can ask health questions and deny coverage. However, the first six months you go on Medicare, you must be accepted by the companies. This is why these companies appeal to people expecting more health issues.
Work with a professional that can explain all of the choices to you and consider any changes you have had in doctors or medicines. Make an informed choice to help control your health care cost next year.
Your Financial Future is written by certified financial planner Gary W. Boatman, MBA and CFP, who also wrote the book, 鈥淵our Financial Compass: Safe Passage Through The Turbulent Waters of Taxes, Income Planning and Market Volatility.鈥� If there is an area that you would like to see discussed in the column, send your suggestions to gary@BoatmanWealthManagement.com.