If you are approaching 65, or have recently reached that milestone, it is time to celebrate your independence. You now have the opportunity to become even more independent when it comes to your health coverage.
Medicare Offers Choices
Many Americans pay into Medicare their whole career, but are not aware of all the options they have available to them once they reach the age of eligibility. Medicare is one of the great ways our country encourages independence. We love to have choices. So, when it comes to Medicare, what are they?
Medicare has four parts, listed by letters.
- Medicare Part A is for hospital coverage
- Medicare Part B is for doctor’s visits
- Medicare Part C is not a separate benefit, but an optional alternative program called Medicare Advantage. It allows for a private insurance company to provide the equivalent of Parts A and B
- Medicare Part D is for medications
The Big Decision
Based on all those parts of Medicare, there are three basic options (Medicare Part D is commonly included as an option in any of them, so we’ll leave that out).
1. Get “Original Medicare” (Parts A and B) and then pay for all your copays, deductibles, and other expenses out of pocket.
2. Get Original Medicare plus a Medigap plan, also known as a Medicare Supplement Insurance plan. This allows Original Medicare to cover most of the cost of approved benefits but then copays, deductibles, and some other expenses are covered by the private Medigap plan.
3. Go the Medicare Part C route and get a private Medicare Advantage Plan. The insurance plan offers all the benefits that A and B offer, but premiums may be lower or benefits higher depending on the plan.
Why Option 2 Offers You the Most Freedom
If it’s independence and flexibility you want, you should go with the second choice. Original Medicare is almost universally accepted at hospitals and by doctors. Having that assurance that you can travel anywhere in the country and be treated is the definition of independence in retirement. The Medigap plan also frees you from worry on other expenses on Medicare-approved procedures.
With Medicare Advantage Plans, the third option above, you are more limited in which facilities you can visit. The private insurance company is providing the benefits from Medicare A and B, but they determine where you can go to a much greater extent. This becomes a much bigger problem if you need to go to a specialist, like, for example, at a research hospital like Duke.
Cardinal Advisors Can Help Choose a Plan
If you need care, and you want to maintain your independence in retirement, pick a Medigap plan to supplement your Original Medicare. Cardinal Advisors in Cary, North Carolina can help you determine the right option for you. Give us a call today, and we’ll help you keep your freedom and choice in your retirement health plan.
Hans Scheil is the author of “The Complete Cardinal Guide to Planning for and Living in Retirement” and the accompanying workbook. He can be reached at Hans@CardinalGuide.com.