There comes a time when an employee turning 65 years of age faces an important decision– do I leave my company medical plan to go into the myriad of plans available in the Medicare environment? The employee has been on their company’s health policy for many years and likely contributed a portion of their paycheck for premiums, along with paying for claims his/her benefit plan demanded – such as co-pays, deductibles, and other out-of-pocket expenses. Now, challenged for the first time in their life with another option, he/she stares at this daunting task without clear and concise information of “the other side” of benefits.
The Medicare requirements and plans do not appear overwhelming: When you turn 65, if you worked for more than 10 years and contributed into the Medicare program, you are offered Part A (Hospitalization) at no cost and Part B (Major Medical) at a premium – dependent upon your income. And, when choosing a Medicare plan, there are generally two types of coverage available for improving upon Parts A&B; Medigap policies OR Medicare Advantage plans.
Comprehending the 2 plans do not appear overwhelming: With Medigap, any doctor or hospital taking Medicare may be visited and these supplemental policies you purchase fill in the “holes” from Medicare Parts A, B, and D coverage. With Medicare Advantage plans, or Medicare Part C, you are required to have Medicare Parts A&B and the insurance carrier fills in the gaps of Medicare coverage utilizing their numerous plan offerings, however, you will be expected to see their provider network in order to obtain the richest benefits of your plan.
So, one would think that if there are only these options to concern yourself with when you are turning 65, how difficult can this really be? Well, don’t kid yourself – remember you are 65. When it comes to Medigap, you are tasked with understanding Plans A-N as you navigate the exposure you are left with in your Medicare Parts A& B coverage. Next option is to sift through all the Advantage plans, and their differences in cost and benefits from, and within, each carrier. And lastly, it has now become a concern to simply remain on your health insurance policy at work – believing it avoids the responsibility of deciding on your Medicare options as you turn 65.
A humbling example I ran into years ago was an owner who remained on his company policy, had under 20 employees when Medicare is primary, and opted not to purchase Part B. The carriers in the market assumes that when you turn 65 you take Parts A & B, so when it comes time to pay claims, they only pay a small portion of the claim. They expect Medicare to pick up the large portion and, as a result, creates a surprise bill you don’t want to experience. This decision could leave you exposed on your current plan and exposed to penalties when joining Medicare after leaving your company.
As a broker, I recognize my role – for every client that I work with – as one that encompasses not only health insurance and benefits, but a responsibility to help every employee that works for my client. We are in a time where so many people are turning 65 but find themselves unable to retire. As a result, there is a high demand to make sure they are appropriately covered by insurance – especially when their healthcare is in such demand of services. Most important, is that they are educated, informed, and guided in the right direction when it comes to their medical plan choices at such a crucial time in their lives.