The Most Consequential Decision Facing Your Clients – Medicare Advantage versus Medigap
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Every year. Every day. I teach clients that they must choose one of two paths to complete their Medicare coverage.
When a person transitions to the Medicare system, there is lots of confusion. Remember that for the first time in 40 years, most are leaving the safety of their employer sponsored group plan and they have to make their own decisions. Those decisions may not be “fixable” at the next open enrollment window for the employer.
Suddenly, it’s not so simple.
Let’s visit the basics. Here’s the two-second overview of the two choices most people have. In this article I’m not addressing those who have retiree medical coverage available. I’m strictly looking at a person who needs to choose their products for the rest of their life with their own dollars.
Medigap follows original Medicare. When you purchase a Medigap plan, original Medicare pays 80%, and the plan you purchase will generally pay “the rest.”
Medigap costs for a 65-year-old are approximately $150.00 per month, every month.
Medicare Advantage is a bundled approach to Medicare. A private carrier creates a plan but must provide at least what original Medicare (Parts A and B) offers. It can add bells and whistles to its plan to attract new participants. These are managed-care plans with networks, co-pays, co-insurance and an out-of-pocket in-network maximum in 2021 of $7,550.
Thousands and thousands of Medicare Advantage plans claim to “cost” zero per month. Yes, zero.