Orlando Sentinel

Picking a Medicare plan, a complex process

- By Elliot Raphaelson Elliot Raphaelson has decades of experience as an adviser, teacher and author in the field of personal finance. He welcomes your questions and comments at raphelliot@gmail.com

Selecting a Medicare plan is complex. For a summary of the basics, you should obtain a free copy of “Medicare & You (2023),” a government handbook that is updated each year.

Contact the Center for Medicare and Medicaid Services (CMS) at 800-633-4227 to obtain a copy; or visit https://www.medicare.gov/ medicare-and-you.

Traditiona­l Medicare refers to Part A (hospital insurance), Part B (medical insurance) and Part D (drug coverage). The major advantage of traditiona­l Medicare is that you can visit any hospital or doctor affiliated with Medicare without a referral or prior authorizat­ion.

If you claim a Social Security benefit prior to age 65, you are automatica­lly enrolled in traditiona­l Medicare. Although traditiona­l Medicare is flexible, it may not be your most cost-effective choice.

Part B premiums are based on your income. In 2023, for most participan­ts, the standard monthly premium is approximat­ely $165 per month. However, if your family’s adjusted gross income (AGI) exceeds $370,000 or your individual income exceeds $180,000, your monthly cost will be higher.

Medigap is supplement­ary insurance to original Medicare. Part B covers 80% of your physician services. If you require hospitaliz­ation, there is a $1,600 deductible cost that could be covered by Medigap. If you require skilled nursing care after your hospital stay longer than 20 days, the cost would be $200 per day without Medigap coverage.

The bottom line is that without Medigap coverage, you could be facing substantia­l out-of-pocket expenses. There are 10 types of plans, which vary by state. Medicare.gov covers the difference­s in the plans and the associated premiums.

Part D premiums are tied to income, with an average cost of $43 per month. You have only 63 days after your initial enrollment in Medicare to enroll in Part D. Enrollment after that date will result in higher premiums.

Medicare Advantage Plans, known as Part C, are an alternativ­e to traditiona­l Medicare. If you are healthy, and remain so, a Medicare Advantage plan may be cost-effective, but there are disadvanta­ges. These plans, which vary significan­tly, can include insurance coverage for routine dental, vision and hearing. You have to do your homework before you select a Medicare Advantage plan. “Medicare and You” provides valuable informatio­n.

In order to be eligible, you must first sign up for Parts A and B. Some of these plans offer prescripti­on drug coverage. Some offer lower monthly costs than traditiona­l Medicare. In most cases, you will need to use health care providers who participat­e in the plan’s network.

These plans set a limit on what you have to pay out-of-pocket each year for covered services.

An excellent resource is your State Health Insurance Plan (SHIP). SHIP is available in all states. You will be assigned an unbiased individual with expertise in Medicare to work with you. There is no cost. I volunteere­d for SHIP for several years.

Another source is “Get What’s Yours for Health Care: How to Get the Best Care at the Right Price” by Philip Moeller (Simon & Schuster). The book is comprehens­ive, unbiased and covers the pros and cons of traditiona­l Medicare vs. Medicare Advantage. Moeller also provides good advice on minimizing drug costs.

Medicare options are plentiful and complex. Some cost-effective options are available only at the time you apply. Don’t hesitate to ask your primary health-care advisers for their advice.

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