Turning 65 this year?
In the 20th century, more babies were born in 1957 than any other year. Now, all those babies are turning 65!
Welcome to Medicare.
Medicare comes in 4 parts—
Part A hospitals. If you’ve worked in the U.S.A. for 10+ years, this will appear to be “free”, since you’ve already “paid in” to it.
Part B doctors. If you’re taking social security benefits because you’re “retired”, then this will automatically be deducted from your check. If you’re no
Part C advantage OR supplement (both are optional and mutually exclusive)
Part D a prescription drug plan
You have to pay for Part B, $170 per month (2022), or it can be taken out of social security (if you’re getting it now)
Part D is another thing you either pay for or is included in a Plan. Usually, this is a minimal cost for someone turning 65. $10-$20 per month for a standalone plan is common.
There are financial penalties if you wait too long to enroll in Part B or D.
You may love or hate the idea of turning 65. But love it or hate it, it’s better than the alternative, right?
You can read more about how to pay for Medicare here: https://www.medicare.gov/your-medicare-costs/pay-part-a-part-b-premiums
Affordability
Most people who can afford it, stick with Original Medicare and add a Medicare Supplement (Med Supp) policy. That’s because Original Medicare only pays 80% for covered services. And there are deductibles, coinsurance, co-pays, which get automatically taken care of by a Med Supp policy. There is a monthly premium, which can go up as you get older. They are “guaranteed issue” when you turn 65, meaning pre-existing conditions are taken care of, they can’t turn you down. I just helped a 79 year old woman from our church get a Medicare Supplement policy for about $205 per month.
On the other hand, there are Medicare Advantage plans (MA). Most of them are $0 per month, but you will pay more for services as you use them
Here’s a way to think about the differences between them–
Medicare Advantage (MA) vs Medicare Supplement (Med Supp)
Most people, if they can afford it, choose a Med Supp plan, when they are turning 65. But Medicare Advantage plans are gaining in popularity– fast.
Below are the differences to consider.
Medicare Advantage (MA) when turning 65
These are like an a la carte restaurant. Pay as you go. The more services you use, the more it costs. You pay for what you use. There is a set amounts for services. If you don’t use it at all, and you have a $0 (zero dollar) premium, then you have a zero cost for that month.
Some of the most popular MA plans offer a $0 monthly premium. Almost all of them have a Prescription Drug Plan (PDP) built in. Those are called MAPD– yes, the Medicare world is full of acronyms!
If you don’t use any services or fill any prescriptions that month, you paid nothing for your healthcare. This is financially attractive to many people. On the other hand, If you use a lot of healthcare services, a MA plan can be expensive up to the Maximum Out Of Pocket (MOOP). This could be as high as $14,000 in a given year.
Medicare Supplement (Med Supp) when turning 65
These plans have a flat monthly premium (your payment), whether you use healthcare services or not. It’s like going to a buffet. Everyone who walks in will pay, no matter how much they eat. There may be some costs for certain services, depending on the Plan.
If a person has an Expensive procedure (open heart, transplant, amputation), they still pay the same monthly premium. Is there a downside? If you never go to the doctor, you’re still paying the same monthly premium.
Med Supp plans require you to have a standalone Prescription Drug Plan (PDP). However, if you’re just turning 65, these are usually very low cost: $10-$20 per month. Remember– there is a financial penalty if you do NOT sign up for this when turning 65– unless you are already on an employer insurance plan that contains “creditable coverage” for prescription drugs.
Monthly flat fee -OR- Pay As You Go?
With a Med Supp, you can go see any doctor in any state who accepts Original Medicare (which most of them do). With a MA plan, you have to stay “in their network” which is sometimes limited to a certain county, otherwise they may pay little or nothing.
If someone only goes to the doctor 2x per year, how much are they actually paying for that doctor visit? Someone on Med Supp might say “it’s free” because when they go to the Doc they are not paying a copay.
But really it’s their “monthly premium” X 12 months, divided by the two visits. Someone in this situation might be better off in a MA plan because their 2x copays might be $20-$60.
But some people would rather budget the same amount every month– they don’t mind paying a little more for the flexibility– whether they use it or not. So, a Med Supp might be better. They’ll have to sign up for a Prescription Drug Plan (PDP) and still have to pay for prescriptions.
You can’t predict a broken bone or bronchitis. Insurance is all about your risk tolerance.
Mobility & Travel
- If you spend 6 months per year in different states, a Med Supp might be a better fit for you.
- People who stay close to home, may be better with a MA plan.
- Some may want to go to a certain Provider or Clinic, so we have to check to see if a certain doctor is In Network for a MA plan, or discuss if it’s worth switching doctors for all the Plan advantages
Everyone wants a shortcut, but everyone’s bottom line is different.
If someone KNEW how much medical care they would need in the coming year, it would be EASY to figure out which plan is best.
You can choose your Medicare Plan 3 months before turning 65, the month of your birthday, and up to 3 months after turning 65. There can be lifelong financial penalties for not doing so.
–About Me–
I help Texans get & life health insurance. I’m licensed by the state of Texas, and my services are at no cost or obligation to you.
You can read about me here: https://houstonhealthandlife.com/about-me/
You can schedule a call with (phone, zoom, in person) at: https://calendly.com/danieloconnell/discovery60min
