The Hidden Dangers of Medicare Advantage Plans for Social Security Recipients

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104. Medigap Policies are an excellent option, especially for retirees with needing a high level of medical care, however...

Outside of the initial election period, when a retiree turns 65 or unless there is a special election period, such as losing employer coverage, retirees are subject to medical underwriting and there's no guarantee for the premium. The insurer has the option of rejecting the application altogether. Two states, New York and Connecticut, have year around guaranteed issue, and a very few other state have birthday rules for guaranteed issue. However, outside of these limited periods, it is difficult to enroll in a Medigap policy outside of the initial election period when turning 65. Medigap premiums are based on age, inflation and increased insurer costs, and the premiums increase over time, some times significantly. It's not uncommon for older retirees being forced to move from Medigap to Advantage because they can no longer afford the Medigap premiums.

Medigap policies are great in that they allow the retiree to see any provider in the US that accepts medicare without a referral and there are no prior authorizations.

Medigap policies were designed to fill in the gaps for original Medicare Parts A and B. However, there is no prescription drug coverage with a Medigap policy and in order to meet the Medicare requirement for Part D coverage, a separate, standalone Part D prescription policy is required. In fact, Medicare assesses lifetime penalties if a retiree is not enrolled in creditable prescriptions coverage when first eligible for Medicare.

Original Medicare does not cover dental, hearing or vision benefits for eyeglasses. Separate policies are required for their coverage.

Ideally, a Medigap policy is the best way to obtain the best medical coverage after age 65. However, may retirees aren't aware of the guaranteed issue limitations for enrollment and miss this opportunity during their initial election period. Without the guaranteed issue benefit, a retiree is subject to medical underwriting and the insurance carrier has the option to reject the policy. If the insurance carrier decides to write the policy, the premium will be based upon the retiree's age and health status.

Medigap policies are generally the best option for retiree needing a high level of medical care, since the out-of-pocket costs are loser. However, Advantage is a viable option for retiree who are generally in good health and don't require a high level of medical care. They are also a viable option for retirees without sufficient financial resources to afford the premiums for a Medigap policy, plus a Part D prescription policy, along with dental, vision and hearing policies.

Advantage is far from perfect, however, given the current Medicare system, it is a viable option for many retirees. Medigap policies are generally the best option for retiree needing a high level of medical care, since the out-of-pocket costs are loser.

Advantage is a viable option for retiree who are generally in good health and don't require a high level of medical care. There are many low or $0 premium policies available, and there is a medical out-of-pocket maximum for every policy. Advantage plans have networks, HMO's and PPO's, and a primary care physician is required. The out-of pocket costs are higher for Advantage than for a Medigap policy. but many of the plans offer dental, hearing and vision benefits, as well as gym memberships and other benefits.

All of the Medicare plans are available to be viewed on the Medicare.gov website and have star ratings from one to five stars. Medicare does the star rating annually, based on quality and performance It makes sense to review the rating on the Medicare.gov site and select a plan with a high star rating

With both Media and Advantage plans, the retiree has the right to file appeal plan decisions, as well as file grievances about the plan, quality of care, doctor, provider, or hospital. Grievances can be filed with the insurance carrier or directly with Medicare.

Of course, there are bad actors in every insurance area. It pays to be a proactive consumer and do the research. Until there are major changes to the Medicare delivery system, Advantage plans offer a viable (if not perfect) option for many retirees, despite the warnings in earlier posts.