His vision for starting GWS was to deliver investment strategies and wealth management services typically available at the highest levels of wealth. Today, clients benefit from these sophisticated financial services targeted to meet their unique needs.
As our clients approach age 65, the conversation always seems to turn to Medicare. If they don’t bring it up, I do because this government healthcare program can be confusing, leaving many with a fear of not having the information necessary to make an educated decision.
When applying for Medicare benefits, there is a decision to make – is traditional Medicare or a Medicare Advantage plan best? It’s a complex question and we work with our clients to help find the best answer for them.
It is understandable that someone would feel lost when trying to make this important decision. The stress and anxiety of tackling this unknown can be overwhelming. Most financial advisors understand the basics, but we prefer to walk our clients through the decision-making process. First, we educate clients on the structure of the Medicare system so they understand how the pieces fit together, and then we discuss their specific situation so they are prepared before going through the application process.
Traditional Medicare Plan
Medicare supplemental insurance policies, also known as Medigap policies, provide additional benefits and can reduce out-of-pocket costs when combined with Medicare Part A (Hospital coverage) and Part B (Medical Insurance). They’re provided by private insurance companies and require additional premium payments. And because they usually exclude prescription drug coverage, clients may need to layer Part D coverage on top. That means you could end up with three different monthly insurance premiums to pay and coverage plans to manage.
Medicare Advantage Plans
Medicare Advantage plans, on the other hand, combine Medicare parts A, B and sometimes D. In essence, these policies bundle coverage into a single Medicare-approved health plan offered by a private insurance company. The level of coverage varies depending on the plan chosen; again, there are numerous options available.
So which plan, Traditional Medicare or Medicare Advantage, is better?
The answer to the question varies depending on someone’s specific situation. If there is employer health plan coverage, it can sometimes act as a Medigap plan, so usually additional coverage is not necessary. Otherwise, I’ve found that traditional Medicare with a Medigap plan is a great option for clients who have a special health consideration, don’t mind shopping around and/or have a tendency to be thrifty.
On the other hand, Medicare Advantage plans tend to feel more like the employer health plans that many people are used to. They are great if the client is willing to pay a little more for the convenience.
The health insurance industry helps to make this more confusing since Medigap and Advantage plans differ between states and sometimes counties.
Medicare Resources
During these conversations, I often pull up the Medicare website because it is such a great resource; among other information, it shows what plans are available in each state. There is also a customized search option that lets enrollees filter plans based on the coverage they want, with an estimate of the health care costs associated with each specific plan.
While either traditional Medicare or Medicare Advantage plans could make sense at the time of enrollment, circumstances do change — and both the plans and health needs may require a recalibration in the future. The good news is that open enrollment occurs each year from October 15 through December 7 and we encourage our clients to shop around at least every three years.
Understanding your Medicare options, knowing the coverage and associated out-of pocket costs and when and how to enroll can be challenging. That’s why we put together this Medicare Survival Guide. In it we explain your options, give you helpful links and provide tips to keep you out of the penalty zone.
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