Are you turning 65? Will you continue to work and go on Medicare? Or will Medicare be your only health care insurance? Have you learned everything you need to know or do you still have questions? Did you take advice from friends on Medicare? Do you really understand how those Medicare Advantage plans work? Are all Medigap plans really the same?
Even if you have already bought a plan, take 3 minutes to read this. It might just save you a lot of time, money and grief.
You are about to go on Medicare. Here are some things you need to know about your journey.
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Turning 65 – You are not alone
Roughly 80% of retirees turning 65 have never bought health insurance before.
My 40 years in the health insurance business was not enough to prepare me for understanding the Medicare system. It took me about a month of research and talking to Medicare specialists before the light bulb turned on.
If it was that difficult for me I can imagine how confusing it is for you and everyone else.
Your friends that are on Medicare are probably still confused about what they have and how it works. I know this because I talk to people every day that were told something about Medicare that is 100% wrong and will prove very costly down the road.
Ask your friends who THEY talked to in making their decision. If they were pleased, ask for a recommendation. Then you talk with that person and decide if they are giving solid advice or simply pushing a product.
If they bought a $0 premium Advantage plan (along with a bunch of junk to fill the gaps), or Medigap plan F they will learn to regret that choice later down the road.
Things you probably don’t know
When turning 65 you have ONLY ONE Initial Enrollment Period (IEP). During that time you can enroll in ANY PLAN from ANY CARRIER without answering health questions. Your initial enrollment for Medigap begins the month when you turn 65 AND go on Medicare Part B. It ends 6 months later.
During your IEP you can freely change Medigap plans within the same carrier or move from one carrier to another without penalty. Most people we talk to will end up paying a lot more for their coverage than was necessary. It is not too late to change. Don’t let pride stop you from making a better financial decision. (More on this later)
You have 63 days from the time you turned 65 and enrolled in Medicare Part B to pick a Part D drug plan or Medicare Advantage plan. If you wait, your next opportunity will be during the Annual Enrollment Period (AEP) and you will pay a LIFETIME late enrollment penalty.
If you bought an Advantage plan and then learned that was the wrong decision you can still purchase a suitable Medigap during your IEP. This happens with some frequency so no need to feel embarrassed.
Many of the newer Advantage plans are “front end loaded” so you pay most of the costs of your care without the benefit of a copay. The networks are also more restrictive than you may have been accustomed to with traditional health insurance.
Medigap is simple, but not as simple as some might think. Sure, the plans are standardized. All plans with the same letter (plan F for example) are identical in every way except the price you pay.
But the simplicity stops there.
Financial ratings don’t matter. “A” rated carriers like AFLAC and Mutual of Omaha have sucker punched retirees in the past.
Look for LONG TERM STABILITY in the Medicare supplement market. If a carrier doesn’t have at least 5 years in the Medigap market operating under the SAME NAME, you probably want to cross them off your list.
Mutual of Omaha, United World, United of Omaha and Omaha Insurance Company have common parentage but the comparison stops there. The names are interchangeable and every 3 – 4 years an old carrier will be swapped for a newer one that has rates 20 – 30% below the “old” carrier. The new, lower rates are only for NEW APPLICANTS.
Aetna Health and Life, Manhattan, Omaha Insurance Company, Companion Life …….. all have “hot” rates in Georgia right now. But none of them have more than 3 years in the Medigap business an at least two have already had a 9% rate increase.
You don’t have to do what I do but consider this. I have more experience in the health insurance business than anyone you have talked to so far. There are some paths I won’t take because I know the pitfalls.
Maybe you should do the same.
I enrolled in Medicare in September, 2015.
I didn’t buy a plan from any carrier with less than 5 years in the Medigap business.
I didn’t buy plan F.
I didn’t buy a Medicare Advantage plan. Even if I did, I certainly would NOT buy a hospital indemnity plan, a cancer plan, a heart attack plan, etc to fill the gaps. Any agent that pushes those policies is more interested making as much money as possible off you than they are in serving YOUR needs.
Ultimately, whatever choice you make should fit your needs and budget. I don’t expect everyone to make the same decisions I make, nor would I pressure anyone to buy something just because I am doing it. But I do believe my clients deserve to know the choices I makd and why I made them.
If you want to know what I bought and why, just ask.
There are more than 170 different Medigap plans in Georgia. You probably looked at half a dozen or less.
There are only THREE Medicare supplement carriers with competitive rates that have 5 or more years in the Medigap business. If you didn’t buy from them you probably are, or will eventually be, paying too much.
You are turning 65 and need to make a decision before going on Medicare. Better to review your decision now rather than later.
Let me know how I can help.
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