So, you are turning 65 or new to Medicare and you’re not sure which route to take when covering the gaps left by just having Medicare alone. When becoming eligible for Medicare and having to find your own health insurance, due to not having group or retirement coverage, you really only have two options to choose from. Here in Texas you can choose a Medigap Insurance Plan or a Medicare Advantage Plan. Well, with only two options, which one is the best?
I wish that question was as easy to answer as it is to ask. The answer to this question is completely up to you. Knowing the differences between the two insurance options is the first place to start; complete knowledge of the risks and rewards of each will help protect you in the long run from cost you were not expecting. Now, if you were to ask me that question, as an insurance professional, I would have to ask you a question right back; “How much of a gambler are you?” The reason for that statement is insurance is a gamble no matter how you look at it. You can pay for coverage month after month for twenty years and never use it or you can go without because of how healthy you think you are and the next thing you know you are looking at a $250,000 hospital bill.
The cushion to the gamble of insurance when you are Medicare eligible is Original Medicare. Medicare Part A covers most of your hospital services and you pay for that with the taxes you pay in over the years that you work. Medicare Part B, even though you have to pay for it, helps pick up 80% of Medicare’s approved charges for medical services. The problem is most seniors are on a fixed income, and the out of pockets risks left by just having Medicare alone could really hurt that income coming in. This is why there are options to help protect that income.
In my professional opinion, I would suggest to anyone that they choose a Texas Medicare supplement insurance plans over a Medicare Advantage plan, if it fit their budget. The reason for this is these plans are designed to fill in the gaps left by just having Medicare alone, hence the name Medigap. You are also not restricted to seeing certain doctors or hospitals, as long as you do not choose a Medicare Select Plan. More importantly you know exactly what your risk or gamble is, depending on which plan you pick.
On the flip side, there are numerous options of Medicare Advantage Plans to choose from, but make sure you fully understand the rules of the plan before signing up for one. Even though I think that there always should be the option of both plans to choose from, I just would not recommend a plan that restricts you doctor and hospital choices, offers lower premiums (sometimes $0) but leaves you with the chance to be out of pocket more if you have to use them, but the number one reason why I would suggest a Medigap Insurance Plan in Texas over a Medicare Advantage Plan is the uncertainty of their future. The point being is this, we all know that the government passed the Health Care Reform Law, well in this bill there is over $500 Billion dollars in cuts to Medicare. Out of the $500 Billion, $130 Billion are aimed directly at Medicare Advantage Plans. Even though these cuts do not kick in until 2012, here in Texas I saw 4 PFFS Plans pull out of the state and sent letters to their customers stating they would not have benefits come January 1, 2011.
I do not mind a little gambling, but if I only had two choices to pick from and one was uncertain with more out of pocket risk while the other was designed to cover specific areas that were not and offered freedom of choice, I believe my choice would be easy. Now, that is just my opinion and it is mainly pointed to the 65 year and older crowd. Here in Texas if you are on Medicare Disability, your options for Medicare Supplement Insurance Plans go from 10 Plan choices to 1. This is why I enjoy my job; I help people understand this gamble in life. As for the decision they make, I will always be unbiased in passing on my knowledge and hope that I will give them informed information to make an informed one. If I can answer any questions or concerns you may have feel free to contact me directly.