How to Lower Medicare Costs

If your premiums are rising, consider these alternatives.

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.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.