As we approach age 65 and retirement we start to consider living life on a fixed income and come to the reality that there are some luxuries and "nice-to-haves" that we could and should do without in our later years. Maybe we forego certain services we paid for while we were employed to allow us more leisurely time when we weren't working. We're a little more conscious about each new addition to our budgets and have to consider not only how to save money on such things as services but we also have to protect ourselves from unexpected bills that could be inconvenient or even devastating to our savings and budgets.
There is no doubt that at or near the top of the list is how to ensure we get the medical treatment we want and/or need and to protect ourselves from the potentially large medical bills that may come up as we age. Let's face it. We're not getting any younger and as we age it is just inevitable that we will, at some point (and often times unexpectedly), have to have serious medical attention. With the rapidly rising cost of medical costs even a temporary stay in a hospital can cost tens of thousands.
Most of us are lucky that we have Medicare parts A & B as our primary coverage. Of course, we have been paying in to the Medicare system just about our entire working lives and most of us will still pay at least $110/month for part B (in 2010); however, that's not much to pay for 80% coverage of medical bills after some small to moderate deductibles for hospitalization and outpatient benefits.
The concern is the additional 20% that is not covered. What is the best way to ensure you're not exposed to that 20% (which can be tens of thousands of dollars in catastrophic situations - which is what we want to protect ourselves from) you would owe for medical expenses.
The two main categories folks consider are Medicare Advantage plans or Medicare supplement plans.
Medicare Advantage plans, however, are not really considered supplements... mainly because they are not supplementing Medicare parts A & B. Medicare Advantage plans actually replace your Medicare parts A & B and are required to provide coverage that is at least as good as or better than regular Medicare. The advantage (if you will) of these plans is that they typically cost less than Medicare supplements, often include your Part D drug coverage, and some times have additional benefits like dental and/or vision. Sounds great on the surface, huh?
Here's the rub with Medicare Advantage plans. They typically have small networks... especially in rural areas. So, you have to go to certain doctors and hospitals (and they may not be the ones you want to go to). Also, the private insurance company is now able to make decisions on whether medical treatments are necessary (keep in mind these are for profit companies selling these plans). Also, many recipients find that the plan has some previously undisclosed gaps in coverage that gives them coverage that is only comparable to if they only had Medicare coverage. Remember the plans only have to have coverage that IS AS GOOD AS Medicare or better. Now do you really think insurance companies are going to provide better coverage than they are required to in all areas. So, if you take a Medicare Advantage plan please be aware of your limitations and exclusions. Oh, and those dental and vision benefits? They're usually comparable to discount plans you can get through various associations. So, they look good but they're typically not what you would expect.
Medicare supplements provide better coverage of medical services and a larger network. Many Medicare supplements cover most or all of your gaps in Medicare and typically cost less than $150/month in most states and your network is the Medicare network which is a fairly extensive nation-wide network of medical facilities that accept Medicare coverage. If a doctor takes Medicare they will typically take your Medicare supplement (regardless of the company you purchased it from). Your Medicare part A & B are still your primary coverage. So, Medicare still makes the decision on whether your medical expenses will be covered and the supplement just has to pay the difference.
So, with a Medicare supplement you can see more doctors and feel comfortable that most, if not all, of your medical bills will be paid. You might not have the dental and vision discounts and you'll have to buy a part D separately but you can feel comfortable that medical bills won't be responsible for killing your budget or your savings.
How To Find The Right Way to Supplement Medicare Benefits For Seniors, Why Should You Enroll In Medicare Part D? Mortgage PMT Protection The Finer Points of Medicare Eligibility How To Apply For Medicare Supplemental Insurance And Get The Best Rates What Benefits Does Your Local Medicare Supplement Company Offer?
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