The following is a guest post from Ross Blair, President and CEO of Plan Prescriber, Inc., a provider of comparison tools and educational materials for Medicare-related insurance products.
In 2011, a record 2.8 million Americans turned 65 and became eligible for Medicare. If you’re a newcomer to Medicare this year there is one piece of advice I recommend you take to heart: don’t wait until the last minute to start planning your Medicare enrollment.
Relax. You’re not locked into the same Medicare plan forever. You can change your Medicare Advantage coverage and prescription drug coverage once a year, and some Medicare supplement plans allow you to enroll at any time. If you take your time before your 65th birthday, the decision-making process should be easier.
Learn the basics. Trying to understand Medicare can make anyone’s head spin. Medicare is a different type of health insurance plan than you may be used to, so before you get inundated with sales pitches and unsolicited advice, try to understand the basics.
There are three basic ways to cover yourself: Original Medicare (Part A and Part B), with a Part D prescription drug plan; Medicare Advantage Plan, which can include vision, dental and prescription drug coverage; and a Medicare Supplement plan which fills certain gaps in Original Medicare.
Figure out what you can afford. It sounds simple, but if you haven’t estimated what your retirement income will be, start doing that math before you enroll in Medicare.
Calculate your income after Social Security benefits, pensions, IRA and 401(k) savings, etc. Then, create a list of monthly expenses including rent, utilities and food, as well as other things like your prescription drug costs. Subtract your expenses from your income to develop a good sense of what you can afford to spend on Medicare on a monthly basis.
Next, look at your savings and think about what kind of a Medicare deductible you can afford if you have a large medical expense. Once you know what you can afford to pay each month for premiums and prescription drugs, as well as what type of annual deductible you could afford if you have an unexpected illness or injury, you’re ready to start comparing plans.
In most states there are 10 standard types of Medicare Supplement plans. For the purposes of this article, I’m using the N supplement plans as an example.
There are many Medicare Supplement N plans available on Plan Prescriber if you input your zip code into our tool. There may be additional supplement N plans available in the county that are not listed on the site. Plan prices don’t typically vary within a county, but be sure to use the zip code where you live when you research your options.
Consider your health when making decisions. Your health status will help determine the type of Medicare coverage that best suits your needs. Talk to your doctor about the types of illnesses you’re at risk for later in life, based on your current health status and family history.
Some Medicare Supplement plans don’t allow you to enroll later in life, and those that do may cost you more money. So, you want choose a plan that will fit your budget today, and in 15 years. And, if you take prescription drugs use a drug comparison tool, to help you pick a plan that covers your drugs at the lowest possible cost.
Consider your travel plans. Whether you travel internationally or to different states, it’s important to understand the circumstances under which you’ll be covered. There are Medicare supplement plans that provide travel emergency health care coverage when you’re in foreign countries. If you migrate to another state for several months each year, look for Medicare plans that will cover you outside of designated networks. However, original Medicare and most Medicare supplement plans are good in any location in the United States.
Question brand loyalty. Some Medicare supplement and Medicare Advantage plans come from companies you’ve heard of. If there is a brand you trust, investigate their coverage and consider it as an option. But, price is also an important factor. Don’t pay more for the exact same coverage, because you like the name of the insurer.
All Medicare supplement plans are required to offer the same benefits, but the costs can vary widely. So a Medicare supplement K plan from one insurer must – by law – cover the same services as a Medicare supplement K plan from another insurer in your area. Again, using a good online comparison tool helps you compare plans and prices side-by-side so you can make an informed decision.
Ask for help. Medicare is complex, but there are a number of resources available online, by phone and in person. In addition to online sites like PlanPrescriber, you can contact your State Health Insurance Assistance Program (SHIP) for assistance. SHIPs receive federal funding to provide free local health insurance counseling to people with Medicare. Also, the federal government has created 1-800-MEDICARE to provide information about Medicare coverage and costs, as well as health plan options.
Giving yourself the time to research and consider your Medicare coverage options can pay off.
The Centers for Medicare and Medicaid Services (CMS) has neither reviewed nor endorsed the information provided by PlanPrescriber.