Q & A: April 2017

Q: I’m still working and will turn 65 in July of this year.  I currently get my health insurance through my employer.  We have more than 20 employees and I’ve been told I can keep my employer’s health insurance instead of starting Medicare in July.  The health insurance that I have now is pretty expensive and the deductibles are high.  How can I compare the costs between the two types of insurance?

A:  It’s smart to compare your health insurance options.  Your Initial Enrollment period for Medicare begins three months before you attain age 65, the month you turn 65, and ends three months after you attain 65.  If you decide in favor of starting Medicare as soon as you are eligible, then you would want to shop and compare coverage costs now.

Medicare alone does not cover all the costs you will have.  Most people also get either a Medicare supplement to cover out-of-pocket costs and Part D plan for prescription drugs, or enroll in a Medicare Advantage plan with Part D coverage.

Medicare supplements tend to have higher premiums than Medicare Advantage plans, but will cover most, or even all of your out-of-pocket costs, depending on which policy “A” –“N” that you choose.  Medicare Advantage plans have lower premiums, but you instead pay co-pays for every service.  If you get sick or you are hospitalized, your out-of-pocket costs could be thousands of dollars.  But unlike Medicare alone, Medicare Advantage plans have annual out-of-pocket maximums to cap what you pay.  Those maximums average $5,332 in 2017 but can be as high as $6,700.

It’s important to compare your prescription drug costs based on the drugs you actually take under Part D and Medicare Advantage plans since that expense for most people is their most significant cost, next to premiums.  You can compare Medicare Part D drug plans and Medicare Advantage online at www.Medicare.gov by clicking on the link for “find drug and health plans.”  You can do a general search based on your zip code, and the drugs you input.

To get information about Medicare supplement premiums, first select the plan offering the coverage you are interested in, “A” through “N”.  You can find a listing of these plans on page 82 of the 2017 Medicare & You handbook but not all states will have all plans.  Once you have chosen the plan then you can simply compare premiums between insurers.  The coverage for each type of plan is just the same, but premiums between various insurers can vary tremendously.

To get a list of supplemental plans offered in your state, insurers and premiums, check your state’s insurance commission’s website for published guides comparing Medicare supplement premiums.  Look up the plan you are interested in to compare premiums in your area.  Be sure you look at the quotes for people who are your age, but do read on to get a feel for how premiums rise with age.  Once you pin down a few likely insurers, you will need to call the insurer to confirm premium quotes for your zip code.

If all this sounds complicated — it is.  But comparing these costs is well worth the effort.  Depending on what you have now, Medicare may wind up saving you a considerable sum, and provide lower deductibles than what you get through your employer.  This decision is important to get right, especially if you are married and your spouse is also getting health insurance through your employer’s plan.  If so, caution is advised because your decision affects your spouse’s coverage.

To help you sort things out, TSCL strongly recommends that you get free one-on-one Medicare counseling through your state health insurance assistance program (SHIP).  Many of the programs operate through area agencies on aging, local departments of senior services or senior centers.  You can also get more information online at www.Medicare.gov or call 1-800-Medicare (1-800-633-4227).