Choosing the wrong Medicare plan can be potentially devastating.

Once a person is eligible for Medicare, they generally have two options. The first, and what I consider the preferable option, is to remain on the original Medicare and choose a Medicare Supplement (or Medigap) plan. The second option is to join a Medicare Advantage program. 

The Medicare decisions you make when you first enroll can affect your options for years to come. This blog will explain the potential pitfalls. 

Mistake #1: Choosing the Wrong Medicare Supplement Plan

Medicare Supplement plans were created in conjunction with the government and the private insurance industry when Medicare first began in 1966. 

These plans pay for the gaps that Medicare approves but does not fully cover. Those gaps include hospital deductibles and copays, physician services, outpatient services, testing, and medical supplies.

The most popular Medicare Supplement is known as Plan G. Regardless of which company you choose, the design of Plan G is dictated by the government. Every Plan G works the same way.

The mistake some people make is choosing the wrong company. Many people simply choose the least expensive Plan G. The problem is that rates increase over time.

It is often a much wiser financial decision to choose a highly rated company with the best history of renewal rates. If the average 65-year-old lives more than 20 years, it becomes much more important to focus on future premiums than the first-year premium.

Medicare Supplements are not like auto insurance where you can easily change companies each year.

For example, in Florida, if you want to switch from one Medicare Supplement company to another after you are six months past your initial enrollment period, the new application is medically underwritten. This means that unless you can answer “no” to a series of medical questions, you may not be able to switch Medicare Supplement insurers.

Choosing the right Medicare Supplement company from the beginning can help you avoid difficult decisions later on.

Our office looks at all of these details and helps educate clients on why one insurance carrier may be a better long-term choice than another.

Mistake #2: Choosing Any Medicare Advantage Plan

Many people choose Medicare Advantage without realizing how difficult it may be to switch to a Medicare Supplement later.

The government pays these plans an annual fee for every member they enroll. Medicare Advantage plans have provider networks, unlike original Medicare. Because they are for-profit organizations, you may not always get the care you want.

Our office receives dozens of phone calls every year from individuals who are enrolled in Medicare Advantage plans and want to move to a Medicare Supplement. The problem, as mentioned earlier, is that it can be difficult to qualify for a Medicare Supplement if you cannot successfully pass medical underwriting.

It is also important to understand that once you join a Medicare Advantage plan, original Medicare is no longer your primary insurance. The Medicare Advantage plan becomes your insurance, even though you must continue paying your Medicare Part B premium.

Additionally, prescription drug coverage is generally embedded within the plan. This means you cannot necessarily choose the Part D plan that is best for your medications.

The benefit of Medicare Advantage plans is that the premium is often $0. However, these plans come with copays and deductibles, those costs could outweigh any savings you thought you might have. 

My Biggest Medicare Caution

If there is one thing you should consider spending money on, especially in your later years, it should be your healthcare.

Whether you choose the wrong Medicare Supplement company or enroll in a Medicare Advantage plan that won’t fit your long-term needs, changing course to the right Medicare Supplement Plan later is very difficult if not impossible.

That is why I believe it is important to understand the long-term consequences before choosing a plan. If you need help reviewing your Medicare options, give us a call at 954-775-0275.