I have a medigap policy, but my premiums have been rising
over the past few years. My health so far has been good. Should I
change to a cheaper medigap policy or consider switching to an
all-inclusive Medicare Advantage plan? I am a widow and must
watch my budget.
You have several new options to help lower your health-care
expenses. You could switch to a Medicare Advantage plan during
open-enrollment season (November 15 to December 31) for coverage to
begin in 2011. Medicare Advantage plans provide both medical and
drug coverage, and the premiums tend to be lower than if you buy a
medigap policy, to cover doctor visits and outpatient services,
plus a separate Part D prescription-drug policy. But though your
premiums may be lower with a Medicare Advantage plan, your
out-of-pocket costs could be higher.
A new type of medigap policy, which was introduced in June 2010,
may be a good alternative. Until recently, insurers sold 12
standardized medigap plans, labeled A through L. Some of those
original options -- Plans E, H, I and J -- are no longer available
to new enrollees. But you now have two new choices: Plans M and N.
Plan N balances coverage and costs. It could be a good alternative
Coverage for Plan N is similar to medigap Plan F, the most
popular medigap plan, except that in addition to the premium you
must pay the $155 annual deductible for Medicare Part B, plus $20
for each office visit and $50 for emergency services. But the
premiums for Plan N are generally so much lower than for other
medigap policies that you may still come out ahead, even if you
have several visits to the doctor or hospital during the year.
For example, the least-expensive Plan F for a 70-year-old man in
Miami costs $211.50 per month, according to PlanPrescriber.com. But
Plan N costs only $169.20 per month, so even if you visited a
doctor 12 times and went to the emergency room twice during the
year, you'd still come out ahead with Plan N.
Although you can use any doctor who accepts Medicare, beware of
"excess charges." Doctors can charge a patient up to 15% of the
Medicare-covered charge. Plan F covers such excess charges, but
Plan N does not. If your doctors charge extra, your out-of-pocket
costs could really add up.
Several insurance companies are offering the new Plan N
regardless of your health. That's a big plus, as most other plans
can reject you or charge you extra based on your health or age,
unless you are within six months of your initial enrollment in
Medicare Part B.
Medicare Plan Finder
lists of medigap plans and prices
If you buy a medigap policy, you'll also have to purchase a
separate Part D policy to cover your prescription drugs. For help
shopping for Part D and Medicare Advantage coverage, see
A Step-By-Step Guide to Comparing Your Medicare
. Also see
4 Key Changes to Medicare Drug Coverage
Changes to the Medicare Advantage Plan
for more information about the way the plans are changing in