This blog if for anyone who is on Medicare, who will soon be on Medicare, or who loves someone who is or will soon be on Medicare.
Open enrollment has just begun. If you own a TV you know that because every other commercial has someone trying to see you a Medicare Advantage plan. And if you are any where near to turning 65, you should consider having an extra mail box just for those Medicare Advantage offers.
Medicare is one of a whole host of issues we consider when creating and implementing a long term comprehensive financial life plan.
But the issue is too important to restrict it to my financial life planning clients only.
Everyone knows what Medicare is. Or do they? If you haven’t reached 65, you just think it’s health insurance for seniors. And it is. But there are complexities that few people understand until they are confronted with making difficult choices.
Medicare doesn’t cover everything. There are two ways to get around that:
1. Medicare Advantage (Part C)
2. Medigap (or Supplemental) Insurance.
Medigap insurance covers the, well, gaps that Medicare doesn’t cover. There are multiple plans, but all are standardized by law. You know exactly what you are getting and what it will cost.
So now the purpose of this blog. Medicare Advantage is not Medicare. When you sign up for a Medicare Advantage plan you are stepping out of Medicare and into the wild wild west of for profit medical insurance.
Medicare doesn’t make a profit because it is focused on seniors’ health care.
Medicare Advantage makes huge profits (enough to pay for those TV ads and CEO salaries).
How? Medicare pays the insurance company a lump sum per participant based on zip code and then walks away. The insurance company makes a profit by expending as little of that money as possible for health care.
If you would like to know more, email me (not this newsletter) with Medicare Advantage in the subject line. I will send you more information to help you make a wise decision.