(BPT) – In a recent survey, 43 percent of newly retired people said they were spending more on health care than they planned. One of the primary reasons? An unintentionally misguided approach to choosing their Medicare coverage.
To make the process of comparing their plan options easier, too often people focus largely on their monthly premiums.
‘Although it may seem like the obvious choice to select a plan with the cheapest monthly premium, it’s important to look beyond the premium and focus instead on the overall value a plan provides,’ said Ben Kehl, vice president of consumer experience for UnitedHealthcare Medicare & Retirement. ‘One of the best ways to do this is to give careful consideration to what’s important to you in a Medicare plan as well as what isn’t.’
Not sure where to begin with this value-focused approach to your Medicare choices? The following three questions can help you move beyond a plan’s premium and consider other factors that contribute to a plan’s value. Your answers can help you maximize your Medicare health care dollars by selecting a plan that provides the greatest value for you.
How much financial risk are you comfortable with?
All Medicare plan options cover some health care costs, but they vary in the amounts they cover and when they start covering those costs.
Original Medicare (Parts A and B) requires you to meet a Part A deductible ($1,340 per benefit period in 2018) before it pays hospital costs and a Part B deductible ($183 annually for most people in 2018; can be higher or lower based on income) before it pays 80 percent of costs for doctor visits and outpatient services, leaving you to pay the remaining 20 percent. Original Medicare does not put a cap on how much you will pay for covered services in a given year, meaning a tough year from a health standpoint could leave you footing the bill for thousands of dollars in health care costs.
If the unpredictability of this equation leaves you uncomfortable, you’re certainly not alone. Most people choose one of two options to help contain their health care costs: Medicare supplement or Medicare Advantage.
Medicare supplement plans help pay some of the costs not covered by Original Medicare, such as copays, coinsurance and deductibles. Medicare supplement plans typically have a higher monthly premium than other Medicare plan options but minimize your out-of-pocket expenses as you’ll have little or no costs when you access care.
Medicare Advantage plans have what’s called an out-of-pocket maximum, which caps how much you will pay in health care out-of-pocket costs in a year. Once you reach that amount, your plan will cover 100 percent of the cost of the Medicare-covered services you receive, and you’ll pay only your premiums. Medicare Advantage plans tend to have lower premiums than Medicare supplement plans, and members pay copays or coinsurance when they need care.
Do you use prescription medications?
For help with the cost of your medications, you may want to consider a stand-alone Part D plan or a Medicare Advantage plan with prescription coverage. To protect your wallet, it’s best to enroll when you become eligible for Medicare, even if you don’t currently take many medications, as it will help you avoid premium penalties later on. There’s a good chance your health needs could change in the future. Consider, for example, that 90 percent of people age 65+ take at least one drug weekly.
When considering a Part D plan, make sure your medications are covered, meaning they’re included on the plan’s formulary. Your costs could be higher if you take a drug that’s not on your plan formulary. Choosing a Medicare Advantage plan that includes prescription drug coverage can be a cost-saving tactic as well as it’ll give you prescription coverage without having to pay a separate monthly premium for a stand-alone Part D plan.
How important is it to you to have routine dental, vision and hearing exams covered?
According to the America’s Health Rankings Annual Report for 2017, most people lose dental coverage when they retire. When the total cost of dental care falls on their shoulders, they may stop getting regular check-ups and routine care, making it more likely that they’ll experience serious dental issues or other health complications in the future. Likewise, routine vision screenings are important even for those who don’t wear glasses or contacts as they can detect the onset of health problems like macular degeneration and diabetes.
People are often surprised that Original Medicare does not provide coverage for routine vision, dental or hearing services. Many Medicare Advantage plans provide these extra benefits as part of their standard coverage.
Hopefully the process of answering these questions has got you thinking about what matters most when it comes to your health and your Medicare coverage. But remember that your health needs as well as your budget can change over time, so it’s important to re-evaluate your priorities periodically to ensure the plan you selected in the past continues to provide the most value in the present.
