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Should I Buy a Medicare Supplement Plan When I Turn Age 65?

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Yes, you should consider all of your options when turning age 65. However, if you have group insurance through work, you may be able to defer your Medicare and supplemental enrollments until retirement. Your group size matters here.

When you enroll in Medicare Part B, consider secondary insurance too. You’ll want to supplement what Medicare Parts A and B do not cover.  Whether it’s an Advantage plan or a Medicare supplement insurance, you will likely benefit from secondary coverage.

In our experience, traditional Medicare supplement plans are the more comprehensive insurance policies. You might pay higher monthly premiums, but your out of pocket exposure will be less than with most Advantage policies. And there are few if any network restrictions with a Medicare supplement.

Your Medicare Open Enrollment Window In Focus

The reason to explore your insurance options at age 65 is you may only have a seven month window to choose and enroll in a plan. 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 usually 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 if they have qualifying group health insurance (20 or more employees) at work.

Furthermore, if you miss your window, you make have late enrollment penalties added to some of your premiums. Late enrollment penalties can affect your Part B and Part D drug premiums. These penalties are to be avoided as they can be for a lifetime.

And if you find a Medigap company that will accept you outside of your 7 month Open Enrollment window, your coverage can cost more. It’s best to avoid them and to avoid medical underwriting, delays and premium increases by being on time.

What About Medicare Advantage Plans?

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 a Medicare Advantage Plan as the premiums are usually lower than most Supplements life F, G & 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 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 costs.

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.

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 potentially deal with larger cost sharing and some network restrictions.

Can My Health Be A Factor When Purchasing Coverage?

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 on a tight budget might consider an Advantage plan. Those who cannot qualify for a Medicare supplement due to health, age or missing their Open Enrollment window might choose this option. And with the advent of Medicare Medical Savings Accounts, some Advantage plans contribute to a savings account for your health.

If you have health issues and have the financial means, a Medicare Supplement might be your first choice. Advantage plans are growing in popularity however and enrollments are up. They are not a bad choice for many who are eligible.

Request Agent Guidance & Assistance

Hyers and Associates is an independent agency specializing in Medicare supplements, Advantage plan, and Part D insurance coverage across the U.S. Contact us today to discuss your options in more detail as you near age 65.

Category: Medicare Supplements, Retirement Planning