HEALTH INSURANCE: A REALITY CHECK
When should you go from a private or company policy to Medicare? What should you consider?
BY:JEFF IORIO
Healthcare costs can be astronomical, especially for those of retirement age. And upon retiring, you’ll face not having employer-provided health coverage and suddenly be relying on Medicare, which doesn’t cover everything.
The process begins at age 65, when all who’ve paid into the system during their career, whether still working or not, receive Medicare Part A, which covers inpatient hospital costs and skilled-nursing home care. Those still working at 65, however, face a decision: accept or temporarily opt out of Medicare Part B, which helps pay for doctor bills and outpatient services. The alternative for those working is to stay with their employer-provided plan.
According to Jeff Mogil, CEO of The Mogil Organization, a Manhattan-based insurance brokerage, it’s frequently preferable to opt out of Part B until you stop working. “Otherwise,” he says, “you’re just paying an additional $88.50 a month even though you’re already covered under a more comprehensive office plan.” Still, it’s imperative to keep both your primary insurance carrier and Social Security aware of your coverage status. When you do stop working, contact Social Security, get Part B and select it as your primary-care coverage.
At that point, consider getting supplemental health insurance to cover costs that Medicare does not. Known as Medigap, such supplemental policies are sold by private insurance companies. “Depending on the state where you reside, there are different standardized policies—Plans A through L—that provide a variety of benefits,” says Jeff Camps, chartered financial consultant for John Hancock. The extent of coverage and amount of deductibles for each plan will determine the cost of each plan’s premium.