As you or a parent/loved one approaches age 65, you will be inundated with information about Medicare. We, at Kennon Insurance, can help you narrow down your options without reading all of these very complicated brochures.
You can enroll in Medicare as early as the first of the month in which you turn 65. Medicare Part A has no cost and Part B costs $134 (more at higher incomes). Because Medicare has lots of gaps and no prescription drug coverage, you need to purchase additional protection.
There are two ways to provide this extra coverage:
- Medicare Advantage Plans—are HMO or PPO plans that include prescription drug coverage all in one package. They actually replace your Medicare, with the insurance carrier being responsible for paying your eligible medical expenses. While Medicare Advantage plans can range in cost from $0 to $300/month, it almost always makes sense to choose one of the less expensive options. We prefer Highmark, UPMC, or United Healthcare options that all cost less than $90/month.
- Medigap Policy with a separate Prescription Plan – is a true supplement that you use in conjunction with your Medicare. You also need to purchase a separate drug policy. Medigap plans come in 10 different forms. We like Plan G the best. The benefits for a Plan G from one carrier would be exactly the same as a Plan G from another. For a 65 year old, Plan G would be approximately $145/month. A separate drug policy would be about $28/month for a total monthly premium of $173.
So, the obvious advantage of a Medicare Advantage plan is the lower monthly premium. In addition, they provide extras like pretty good vision, very basic dental, a hearing aid allowance, and free gym memberships.
The main plus of a Medigap plan is lower out of pocket expense when you incur claims. On a Plan G, your only out-of-pocket for Medicare eligible expenses, is the annual Part B deductible, which is currently $183. (The separate prescription policy and the Medicare Advantage plans have similar out-of-pocket drug expenses.) Another advantage of Medigap plans is you do not have to worry about whether or not the provider is in a particular network. Any provider that accepts Medicare will accept a Medigap plan (about 97% of providers nationally). This can be particularly important with the current UPMC-Highmark situation or if you spend a lot of the year outside of Western PA.
Please contact us at (800) 564-6063 for more information or with any questions.