HOW TO GET THE MOST OUT OF YOUR MEDICARE SUPPLEMENT CONTRACT
Henry Montag, CFP, CLTC | July 8th, 2009Medicare is an age based health plan that is provided to individuals that reach age 65. It is partially funded by the Federal as well as State Government. Medicare will pay for 80% of ones health care costs up to various guidelines and then it stops paying all together. It was never intended to pay for all of ones costs . In order to cover the 20% that medicare will Not pay for people purchase A Medicare Supplement plan. these types of plans will not only pay for the 20% Not covered by Medicare but will also pay for the various deductibles and co pays that are the patients responsibilities.
Medicare and Medicare Supplement plans are very confusing issues that most individuals that become eligible at age 65 do not understand. Many are confused as to which of the 12 standardized plans to choose and how to coordinate those plans with the balance of their overall health care objectives.
I find that many people mistakenly still believe that since medicare covers some long term care costs , and that their medicare supplement will continue to pay these costs if they need continued long term care . However after 100 days neither Medicare Nor Medicare Supplement plans will pay for any of their long term care costs. As a matter of fact 2 of the standardized plans will NOT pay for any long term care costs even for the first 100 days.
In addition there are various penalties that are assessed against a person if they do not sign up for the various benefits in a timely manner. During a persons open enrollment eligibility they can not be turned down for coverage due to health concerns. However if they wait beyond their open enrollment date they may not be afforded coverage until after a significant waiting period
Since Part D prescription plans are relatively new very few individuals understand nor are aware how to best structure their plan so as to personalize it to their specific needs. Not doing so will increase their amount of out of pocket costs otherwise known as the Donut.
Lastly, since all Medicare Supplement plans are standardized in terms of identical features and benefits, and the only difference between them is cost, one must shop the market to make certain that they’re not paying more than they should .My experience tells me that since standardization went into effect over 10 years ago, 1 out of every 4 people are still paying more than they should and costs can range by as much as 20% between companies. Considering the average cost for a Medicare Supplement is approximately $2000 annually , their savings can amount to more than $400 annually and that’s for each spouse.
As always seek expert guidance and advice in this highly specialized area of Insurance coverage as the consequence of Not doing so may cost you dearly.
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Tags: health care, health costs, henry montag, insurance, medicare, medicare supplement plan, part d prescription plans
About the Author: Henry Montag is an Independent Certified Financial Planner as well as a CLTC. He’s been in practice since 1976 with offices on Long Island, New York. He is a contributing writer for The Moneypaper, a national financial publication, been my sourced by Investors business Daily, Long Island Business News, Newsday, Wall St Journal, The Moneypaper,Investment News, Senior Lifestyles and has held insurance and securities licenses for over thirty years.
