If you are turning 65 and will be eligible for Medicare, you should consider getting one of the Medicare insurance plans that are available to you. Very few people become eligible for Medicare and decide that Medicare Parts A and B are enough coverage. There are just too many holes in Medicare not to consider purchasing a plan. Anyone who has gotten close to Medicare age knows, you are literally inundated with information mailed to you. The most important information is sent from Medicare. This unbiased information gives you an overview of your options.
Medigap
A Medigap policy (Medicare supplement) is the traditional type of plan that has been around since 1965. It's called Medigap because it fills the gap left by Medicare. Medicare Part A requires you to pay a hospital deductible and co-pays for extended stays and Part B requires that you pay 20% of all covered outpatient charges. A Medigap policy will, to varying degrees, fill these gaps.
Medigap insurance is available as one of several standardized plans. Plans will be the same from one company to the next. When you first become eligible for Medicare, you have an open enrollment period that lasts six months from the first day of the month that you become eligible. During this time an insurance company cannot refuse you the opportunity to purchase any policy health insurance family or individual health insurance that they sell, no matter what pre-existing medical conditions you may have.
If the Medigap policy is affordable, this is the best time to purchase. Compare rates with several companies, knowing that coverage will be the same no matter which company you look at. Standardization makes comparing Medigap insurance policies easy.
Medicare Advantage
Advantage plans are not Medicare supplements. But rather, you are receiving your benefits from an insurance company that is approved and contracted with CMS (The Centers for Medicare and Medicaid) to administer your Medicare. The idea behind this is that private insurance companies are more financially efficient than the federal government, and should be able to stretch the money allocated to give you more benefits.
medicare insurance plans do not fill the gaps, but rather give you set co-pays, co-insurance and deductibles that may control costs and limit your out-of-pocket expenses compared to other insurance. Advantage plans also often include Part D drug coverage, as well as many additional benefits not included in Medicare, such as dental, vision and hearing. Many people choose an advantage plan because it will often have lower monthly premiums or no premiums at all.
Advantage plans also have an open enrollment period when you become Medicare eligible. Plans also have an annual enrollment period because companies contract for one calendar year at a time, and can change or discontinue plans each year.
