Thursday, December 5, 2013
By JIM MILLER
DEAR SAVVY SENIOR: I'll be 65 in a few months -- Medicare enrollment age -- and am thinking about getting a Medicare supplemental policy to help cover things outside of Medicare. Can you give me some advice on choosing a plan? -- Shopping Sam
DEAR SAM: If you're planning to choose original Medicare for your health coverage, getting a supplemental policy too (also known as Medigap insurance) is a good idea if you can afford it because it will help pay for things that aren't covered by Medicare like co-payments, co-insurance and deductibles. Here are some tips and tools to help you choose an appropriate plan for you.
Medigap policies, which are sold by private health insurers, come in 10 standardized benefit packages labeled as the letters A, B, C, D, F, G, K, L, M and N.
Plan F is the most popular, followed by plan C because they provide the most comprehensive coverage. Plans M and N, the two newest options, are cost-sharing plans that have cheaper premiums that make them appealing to healthier retirees who don't use as much health care.
If, however, you live in Massachusetts, Minnesota or Wisconsin, you have different standardized Medigap plans that you can buy. For more information on the different types of plans, call Medicare at (800) 633-4227 and ask for a free copy of the "Choosing a Medigap Policy" guide (publication 02110) to be mailed, or see medicare.gov/pubs/pdf/02110.pdf.
To choose a policy, consider your health status and family medical history. The differences among plans can be small and rather confusing, so you'll need to do some homework to pick a plan that works best for you.
To help you choose, use the Medigap online search tool at medicare.gov, and click on "Supplements & Other Insurance" at the top of the page, then on "How to Compare Medigap Policies." This tool will break down what each plan covers along with premium cost ranges, and lists the companies that offer them in your area.
Since all Medigap policies with the same letter must cover the exact same benefits, you should shop for the cheapest policy.
You'll get the best price if you sign up within six months after enrolling in Medicare Part B. During this open-enrollment period, an insurer cannot refuse to sell you a policy or charge you more because of your health.
Three pricing methods will affect your costs. Medigap policies are usually sold as either "attained-age" policies that are premiums that start low but increase as you get older; "issue-age" policies that increase prices due to inflation, not age; and "community-rate" policies, where everyone in an area is charged the same premium.
Issue-age policies may start out a little more expensive than attained-age policies but generally have few rate increases over time. And issue-age and community-rate policies will usually save you money in the long-run.
You also need to know that Medigap policies do not cover prescription drugs, so if you don't have drug coverage, you need to consider buying a separate Medicare Part D drug plan too. You can compare plans and cost at medicare.gov/find-a-plan.
Also note that Medigap plans do not cover vision or dental care, hearing aids or long-term care, either.
Instead of getting original Medicare, plus a Medigap policy and a separate Part D drug plan, you could sign up for a Medicare Advantage plan that provides all-in-one coverage. These plans, which are sold by insurance companies, are generally available through HMOs and PPOs. To find and compare Advantage plans visit medicare.gov/find-a-plan.
If you need help, contact your State Health Insurance Assistance Program, which provides free Medicare counseling. See shiptalk.org or call (800) 677-1116 to locate a counselor in your area.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org.