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Sunday, February 20, 2011

What Medicare Plan Should I Choose? Part II

Medicare Advantage Pros

1. Many companies offer coverage for $0/month. (You will continue to pay your Part B premium) People are often confused by this. How can a company do that and make money? Keep in mind the federal government is giving the insurance company a significant subsidy and you continue to pay your part B premium.

2. Next, Advantage plans generally cover hospital, medical, prescription, and many have dental vision and hearing benefits.

Medicare Advantage Cons

1. Advantage Plans are not guaranteed renewable. Remember, the insurance company has a contract with the government, renewed yearly, which can be cancelled by either party at the end of the plan year. If your plan is discontinued, you will need to shop for a new plan.

2. Advantage plans will typically confine the beneficiary to a network of providers. There are much higher costs for going out of the network.

3. Have you heard about the 500 billion in cuts to Medicare? Obama does not like Medicare Advantage. Need I say more?

4. You will have co-pays and co-insurance for almost every procedure, doctor visit, hospital stay and so forth. Many people understand the doctor co-pays, however read your benefit schedules carefully because in many plans there are much higher co-pays for ambulance rides, hospital stays, imaging or skilled care.

5. Although you do have some dental, vision and hearing, these benefits can be very limited in the basic plans.

Traditional Medicare combined with a supplement, Pros

1. Choose the right supplement and kiss co-pays, deductibles and co-insurance goodbye. (does not include prescription)

2. They are guaranteed renewable. As long as you pay your premium, they cannot drop you for any reason.

3. No Network. You can get treated wherever Medicare is accepted anywhere in the United States.

4. You will know your monthly cost and be able to budget.

Traditional Medicare combined with a supplement, Pros

1. They do not come with a prescription plan.

2. They do not include vision, dental or hearing.

To sum it up, there are two choices. Original Medicare combined with a Medicare supplement and a prescription drug plan. The second choice is the all-in-one Medicare Advantage plan. I believe that Medicare combined with a supplement will provide the best coverage. I also feel this is the stable option considering the shaky future of the Advantage plan combined with the uncertainty of health. The advantage plan may be a good option for folks with very limited discretionary income who can simply not afford the supplement. As always, I recommend you go over your options with an independent insurance agent who can advise you based on your specific needs and then set you up with the plan and company that will best serve you.

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