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Life & Health Insurance/Affordable Care Act vs Medicare

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QUESTION: I currently have individual health insurance through the Affordable Care Act (ACA) and receive tax credits. But in the summer of 2016, I will be 65 and eligible for Medicare. The premiums I pay now are likely a lot less than what I would have to pay for Medicare. Am I required by law to switch to Medicare, even if it will cost more than private insurance through the ACA (assuming it will still be around then)?  Thanks

ANSWER: Lee:

ACA policies are for those under the age of 65, and you will not be able to continue your current coverage once you reach the age of 65. If you enroll in Medicare parts A & B at 65, your cost will be around $110.00 per month, automatically deducted from your Social Security check. If you choose to purchase a separate supplement policy to cover Medicare deductibles and co-pays, that type of coverage costs around $70-$150 a month, and an additional $20-$50 a month for prescription coverage. Or, you can enroll in a Medicare Advantage type supplement policy, with premiums ranging from $0-$100 a month, depending on benefit level.

If you want to keep costs to a minimum, and are not too concerned about having to stay within a network of providers for care, the Medicare Advantage/Complete type plans for little or no premium should work out for you, and most include prescription coverage. But if you want to be able to see any Medicare contracted provider in the country, with the ability to move out of state and keep your policy, that type of plan will be in the $150.00 a month range, plus $20-$50 for prescription coverage.

You are not required to buy a Medicare supplement or Advantage/Complete plan. Medicare A & B alone covers about 80% of your expenses. Regarding prescription coverage (Part D,) you will need to obtain a policy at 65 if you want to avoid a 1% penalty per month for not having Part D coverage for the months it was available to you.

The bottom line is that having Medicare A & B & D coverage will very likely be less expensive than what you have now, once an apples to apples comparison is made. As an example, you likely have a high deductible today that you will not have once you go on Medicare.

Please let me know if you have further questions. I know this topic can be confusing, and hopefully I have not made it more so.



---------- FOLLOW-UP ----------

QUESTION: Thanks for all the info. How long before I turn 65 should I start enrolling in Medicare and where would I start? I see ads for AARP and insurance companies advertised, but wouldn't know which one to contact. I would want to keep it as simple as possible.

Answer
Lee:

Medicare will contact you a few months before turning 65, but of course you can call them anytime, 1-800-MEDICARE (1-800-633-4227), or visit their very helpful website (no kidding, it's actually a very good website!) Simply visit www.medicare.gov. Under the, "Sign Up, Change Plans," link on the upper-left of the page will be links to such topics as, "Getting Started With Medicare," and, "Your Medicare Coverage Choices," to name just a couple.

You won't forget to enroll when the time comes, the three foot stack of sales brochures heading your way a few months before turning 65 from AARP, Humana, BCBS etc., will be quite the reminder. Enrolling in Medicare is actually quite simple, and possibly done automatically depending on several factors such as whether you will be working, fully retired, etc. I suggest giving Medicare a call today, and they can give you definitive answers based on your specific case. Of all the government agencies out there, Medicare is one of the better run agencies, and a call to them will answer most, if not all, of your questions. Still feel free to ask me any questions you may have of course, but a call to the number above will be very helpful. You are doing the right thing, getting answers well before turning 65. You will likely conclude that Medicare is a much better deal than what you have now.  

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Michael Higgins

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All questions pertaining to health insurance, whether group, individual/family, student, child-only, COBRA, HIPAA, Portability, dental. No expert knowledge in areas such as life insurance, disability, workman's compensation, auto, etc.

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34 years as owner of health insurance agency, primarily dealing with Blue Cross Blue Shield of Arizona.

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College, Business Administration.

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