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It’s Time to Start Exploring the Pros and Cons of Medicare Advantage

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Medicare open enrollment starts next month, on October 15. If you’re like most new enrollees, you have more questions than answers. That’s why we recommend this timely article from the financial website Kiplinger that sheds important light on the pros and cons of the popular plans called Medicare Advantage.

(Before we highlight some of the article’s excellent points, let us remind you that here at AgingOptions we can advise you or a loved one concerning all aspects of your Medicare choices. Between our many years of experience and our network of Medicare experts, we’ll help you find the answers – and the plans – that are right for you.)

Pretty much everyone knows that Medicare covers most health care costs for those aged 65 and older. But there are some big financial gaps in coverage, including co-pays and deductibles, which can add up to many thousands of dollars per year. That’s why most people supplement their Medicare insurance with what is commonly called “medigap insurance” that bridges the gap left uncovered by regular Medicare. These same beneficiaries also typically purchase some form of prescription drug coverage (called Medicare Part D).

If that sounds confusing it is. The Kiplinger article gives an example of an average 65 year old man who would end up paying three monthly insurance premiums: about $105 for Medicare Part B, plus $191 for the most popular medigap plan, plus $34 per month for the average drug policy. That’s almost $4,000 in annual medical insurance premiums. There must be a simpler way, right? The answer is yes. The desire for simplicity and savings has led millions to purchase Medicare Advantage plans – but there are some caveats that purchasers need to know about.

Under these Medicare Advantage plans, which now cover about one-third of Medicare beneficiaries, private companies offer lower-cost plans which, says Kiplinger, “let you trade government-administered Medicare for comprehensive medical and drug coverage through a private insurer for much less than the cost of a medigap policy.” The average Medicare Advantage policy costs just $34 per month above the standard cost of Medicare Part B premiums. Beside lower costs, beneficiaries appreciate the fact that one policy does it all, eliminating the headache of managing three policies and three premiums. As Kiplinger puts it, “It sounds almost too good to be true.”

That may be an apt description. Indeed there are some significant downsides to Medicare Advantage plans, the chief one being choice – or rather a lack of it. With regular Medicare, says Kiplinger, you can use almost any doctor or hospital who accepts the plan. A Medicare Advantage plan, by contrast, limits your choices to the doctors and hospitals covered by the company’s plan, which means your preferred providers may be excluded from your network. This is clearly something you’ll want to find out before you make a purchasing decision. And here’s another, potentially more ominous drawback: if you decide to drop your medigap policy and switch to Medicare Advantage in order to save money, you may not be able to switch back if your health has deteriorated. This is because, while Medicare does allow you to switch back and forth at certain times between Medicare Advantage and basic Medicare, your worsening health gives the medigap insurer grounds to reject you. The rule in Obamacare that prevents insurers from rejecting applicants based on preexisting conditions does not apply to medigap policies, says the Kiplinger article. You’ll wind up with a choice between greater out of pocket costs and limited choice of healthcare providers.

“People need to make this decision with their eyes open,” says Tricia Neuman, director of the program on Medicare policy for the Kaiser Family Foundation. “In essence, it means the decision people make is an irrevocable one, and many people don’t realize it. They assume they can go back and forth, but they can be locked into Medicare Advantage.” There’s much more to the Kiplinger article and we encourage you to read it. (Again, click here for the link.)

For a full range of advice, including all aspects of retirement planning, let AgingOptions be your most trusted resource. With our comprehensive approach called LifePlanning, we can help you answer all the critical questions that a solid plan should answer. Are your financial resources properly allocated? Are all your legal documents in place and up to date? Is your family informed about and supportive of your wishes? Have you considered where you want to live? Have you prepared for your medical insurance needs? An AgingOptions LifePlan answers all these questions and more. To find out about LifePlanning – without cost or obligation – we invite you to attend a LifePlanning Seminar soon. These popular sessions are fast-paced and packed with helpful information and invaluable insights gained over our many years of retirement planning experience. Click on the Upcoming Events tab to register online, or call us and we’ll be glad to assist you. It will be a pleasure to meet you soon at a LifePlanning Seminar!

(originally reported at

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