A complete retirement plan must go beyond savings and investment to include health, medical, and insurance considerations. For most retirees, Medicare is the foundation of a medical insurance plan. Since it does not cover everything, a secondary market for supplemental Medigap policies has developed.
In 47 states, the Medigap policies have been standardized. The states of Massachusetts, Minnesota, and Wisconsin have developed state specific Medigap plans. In the national scheme, ten plans are offered, which are designated by letters A through N.
The first step in selecting a Medigap plan is determining a suitable type of plan (A through N) by comparing ten core benefits. Examples of the benefits include coverage outside of the US, skilled nursing care coinsurance, out-of-pocket limits, and the cost of blood. More coverage comes with higher premiums. Therefore realistically defining needs is the most important step in obtaining the right level of coverage.
The second step is simply comparison shopping. Online comparison tools are readily available, and medicare.gov provides additional information and advice.
Medicare and Medigap insurance use the term “open enrollment” is a unique way. This term does not refer to an annual period but to a once in a life time period, specifically the six months starting the month of the 65th birthday.
The Medicare open enrollment period is the best time to buy Medigap insurance because during this period, everyone can get the same deal. Insurers are not allowed to use health status, pre-existing conditions or other individual information to decline applicants or to set different rates during this unique period.
Planning for medical coverage during retirement takes knowledge and planning. Familiarization with the details of the system should be done well in advance to allow a pressure-free choice. Please contact us to discuss how medical coverage fits your retirement plan.
