The short answer is yes, unless you have group health coverage at work. If your employer group is over 20 participants, then usually you can defer Medicare, but it’s wise to talk with your HR specialist first.
But if you choose to enroll in Medicare Part B, it is a good idea to have a secondary plan in place in order to supplement what Medicare Parts A and B do not cover. Whether it is an Advantage plan or traditional supplement, you will almost always benefit from secondary coverage.
In our opinion, traditional Medicare supplement plans are the more comprehensive insurance policies. You might pay higher monthly premiums, but your out of pocket exposure will be much less with an Advantage policy. And there are few if any network restrictions with a supplement.
The main reason to explore your Medicare options at age 65 is that you only have a seven month window to buy most types of insurance. This includes the 3 months before your 65th birthday, month of, and three months following your 65th. If you do nothing, then you can miss your open enrollment window.
If you miss this window, then you may be have to go through medical underwriting to buy a Medigap plan. If you have poor health, you can be turned down. You only get ONE open enrollment – and this is when you first enroll in Medicare Part B. Most people do that at age 65, but some do defer.
Furthermore, if you mist your window, then you make have late enrollment penalties added to your premiums. So even if you can find a company that will accept you, your coverage can cost more. And these penalties are from the government. And they can last a lifetime. It’s best to avoid them and to avoid medical underwriting by being on time.
Medicare Advantage plans can be tricky. When you enroll in this coverage, you are allowing a private insurance company to cover what Medicare normally would through Parts A & B. Advantage plans insure you for what Original Medicare usually covers and part of what it does not – and they typically include Part D drug coverage. By law, you cannot be enrolled in both a Medicare supplement and an Advantage plan at the same time,however.
If you are healthy, like any other insurance, you need not worry about your plan. In fact, you will probably save money by enrolling in an Advantage Plan as the premiums are usually lower than Medicare supplement policies like Plans F, G, or N.
However, if you get sick and have major claims, Advantage plans will typically have larger out of pocket expenses In the long run, you may not have saved any money at all. In fact, you could be spending a great deal more.
The other issue with Advantage plans is that they are network driven plans. If you choose Humana or United Healthcare, then you will want to make sure your doctor(s) accept that coverage. Going out of network for care can expose you to even more out-of-pocket expenses.
It should be noted that in some states, like Ohio for instance, those under age 65 who are eligible for Medicare due to disability cannot purchase a traditional Medicare supplement. In these cases, a Medicare Advantage plan will be the only other option to Original Medicare.
So this is what your weighing: You can pay more for a supplement and reduce your out of pocket exposure and network limitations – or pay less for an Advantage Plan and then potentially deal with larger cost sharing and some network restrictions.
There are no restrictions at age 65 for preexisting conditions when purchasing a supplemental Medigap plan. However, there can be after your six month open enrollment window has closed… depending on your situation.
Like many health insurance products, you need to be healthy in order to purchase and be accepted into a plan if you are not in open enrollment. If you have enrolled in an Advantage plan and the insurance company leaves your area – and your health has deteriorated – you will have fewer opportunities to purchase a supplemental policy.
Of course, there is a place for Advantage plans. Seniors who have missed their opportunity to enroll in a Medicare supplement and cannot otherwise qualify for one or who are operating on a tight budget might consider Advantage coverage. But if you are in good health and have the means, a Medicare Supplement might be your first choice.
Hyers and Associates is an independent agency specializing in Medicare supplement insurance coverage across the U.S. Contact us today to discuss your options in more detail as you near age 65.