When you’re 65, unless you’re covered through an employer, you will join the millions of seniors who get health insurance coverage through the federally-established program, Medicare. And while the program can make healthcare decisions simpler, there are still choices you need to make when opting in. This includes whether to go with Original Medicare and Medigap or an Advantage Plan.
Medicare is a comprehensive program covering a great many different medical needs—each of which is broken up into one of four parts.
Original Medicare, which is one of two main coverage options seniors have, is comprised of Parts A, B and D.
For some seniors, the coverage offered by Original Medicare isn’t enough. With no dental or vision coverage and limited lists of providers, Original Medicare just isn’t a good fit for every senior. That’s why some choose a Medicare Advantage plan instead. These are insurance policies issued to seniors by insurance companies. They can be issued as HMO plans with closed networks or as PPO plans, allowing seniors to get limited coverage even when using an out-of-network provider.
When seniors choose Original Medicare rather than Medicare Advantage plans, they can choose to get a Medicare supplement policy—also called Medigap. These policies issued by insurance companies help seniors by paying a portion of the copayments in an Original Medicare plan and by providing health benefits in foreign countries, something not generally covered by Original Medicare.
Deciding which way to go when signing up for Medicare will depend on your budget, your future travel plans, your preferred medical providers and more. It’s important to learn as much as you can about the system and the options so you can better weigh the possibilities and make the best choice for your budget and your lifestyle.
We hope you enjoyed the POSTRETIREMENT BENEFITS PLANNING series. If you’d like to learn more about financial planning, income or what to look out for when planning for retirement, check out our other series: