Know Your Options Before Signing Up for Medicare

As you get ready to turn 65– you may be inundated with information about Medicare. All this information is confusing- but it is important to do your research before choosing your plan. If you aren’t fully informed- you could end up making mistakes that will cost you down the road- particularly when it comes to how “Medicare Advantage” and “Medigap” plans interact.

The first thing to understand is Medicare’s alphabet soup of options. One option is traditional Medicare. This consists of Part A- hospital stays; Part B- physician and other outpatient charges; and Part D- prescription medications. In addition- you can purchase a Medigap policy that covers some of the gaps in traditional Medicare- Parts A and B- but a separate Part D plan will likely be needed. Another option is Medicare Advantage (Part C)- which permits Medicare beneficiaries to receive their medical coverage- and prescription drug coverage if desired- from private companies in one package and without the need for a Medigap plan and usually- without the need for a separate Part D plan. You must enroll in Part A and Part B in order to join a Medicare Advantage plan. In general- traditional Medicare offers more flexibility with regard to doctors while Medicare Advantage plans tend to be managed care plans- which means only certain doctors and providers are covered. For more information, see the advantages and disadvantages of Medicare Advantage.

The first step to choosing the right option is to think about your health care needs. Do you need to see specialists regularly? Do you want vision or dental services? Is it important to be able to see providers nationwide?  These are some of the considerations when choosing between traditional Medicare and Medicare Advantage. For more information, see the two choices from the Medicare Rights Center.

If you decide to go with traditional Medicare- you also need to decide whether you also want a Medigap policy and a Prescription Drug plan. For more information, see what to look for in a prescription drug plan and choosing a Medigap policy.

Medicare has an annual open enrollment period in which you can switch from Medicare Advantage to traditional Medicare or vice versa. However- it’s not so simple to switch from Medicare Advantage to a Medigap plan that supplements traditional Medicare. If you apply for a Medigap policy within six months of enrolling in Medicare Part B- a Medigap insurer can’t refuse to sell you a plan based on a preexisting condition. After this six-month period- insurers can refuse to sell you a policy- delay coverage- or charge a higher premium because of an existing health condition.  Think about this when deciding between traditional Medicare and Medicare Advantage.  For more on the Medigap/Medicare Advantage decision, see the Center for Retirement Research.

If you leave traditional Medicare for Medicare Advantage and then decide to return to traditional Medicare- you won’t face quite the same problem with Medigap. Once you return to traditional Medicare- you have the right to go back to the same Medigap policy you had before you joined the Medicare Advantage plan- provided the same insurance company you had before still sells it.  If the policy is no longer available- you have a guaranteed right to buy a Medigap policy designated A- B- C- F- K or L that is sold in your state by any insurance company as long as you had Medicare Advantage for less than a year.

There are many resources available to help you with your Medicare decisions. The website allows you to find and compare plans- AARP offers a Medicare question and answers tool– and Consumer Reports has a guide to getting the most out of Medicare.

For further reading, see these resources on what you need to know about signing up for Medicare and other general information about Medicare.