Retirement Planning – Four Things to Consider During Medicare Enrollment

Retirement planning can encompass everything from deciding when to claim Social Security benefits to plotting out leisurely post-profession adventures. However, amid the dreams of leisure lies an often-underestimated component — healthcare. 

If you are nearing the age of 65 or have already crossed that threshold, understanding the various Medicare options available to you is crucial to planning ahead for your health care expenses. The Medicare Advantage and Prescription Drug Plan Annual Election Period, happening October 15 to December 7, is the time to evaluate the plans available to you. On average, individuals have more than 40 different Medicare Advantage plan options, which gives you the opportunity to find a plan that meets your personal health, financial and lifestyle needs. 

Take inventory of your healthcare needs

It’s crucial to understand your healthcare needs as you plan for retirement. Begin with an assessment of your current health conditions, medications and regular treatments. 

Speak to your doctor about any health risks you have that may require additional treatment or any procedures you may need in the coming year. Knowing the costs of managing your existing conditions can help lay the groundwork for what you may need in your healthcare plan. 

Understand the differences in plan options

You have a choice between Original Medicare, which is health coverage managed by the federal government, and Medicare Advantage, which is offered by private insurers, like Humana.

Original Medicare includes hospital stays and doctor visits and can be used with any healthcare provider that accepts Medicare. It only covers about 80% of your medical expenses, so you are typically responsible for about 20% of your costs, with no annual cap. 

You have the option to purchase Medicare Supplement Insurance (Medigap) from a private health insurance company to help pay your share of out-of-pocket costs. Also, if you want coverage for most prescription medications with Original Medicare, you will have to purchase a separate Part D prescription drug plan.

Medicare Advantage plans have provider networks and may include other benefits in addition to everything covered by Original Medicare. If you select a Medicare Advantage Prescription Drug plan, you get coverage for prescription drugs without paying a separate monthly premium. Medicare Advantage plans also include maximum out-of-pocket limits, which can help make your expenses more predictable.

When compared to Original Medicare beneficiaries, Medicare Advantage beneficiaries report they are saving more than $2,400 on average per year on out-of-pocket costs and premiums, according to a recent analysis. 

Consider supplemental benefits important to you

Whole-person health goes beyond standard primary care visits, screenings and vaccinations. Caring for your teeth, eyes and ears is also important to your quality of life and can have financial implications if the care isn’t included in your insurance plan. 

While Original Medicare does not include benefits beyond hospital visits and doctor visits, Medicare Advantage plans can include additional benefits to meet your personal wants and needs. For example, all of Humana’s Medicare Advantage plans include dental, vision and hearing coverage, as well as worldwide emergency coverage and telehealth options. They may also include other benefits, depending on the plan and location. 

Evaluate the quality of your plan options

Cost and benefits are not the only factors you should take into consideration as you evaluate your plan options. The quality of the plan you select can have an impact on your overall experience. The Centers for Medicare & Medicaid Services (CMS) reviews and rates all Medicare Advantage plans before the enrollment period each year to help consumers make informed decisions. Plans are rated on a scale of one to five, with one indicating poor performance and five indicating excellence. 

The Medicare Plan Finder on Medicare.gov is an excellent resource for comparing plan costs, benefits and quality ratings.

Understanding the difference between Original Medicare and Medicare Advantage can help you pick the right plan for you. While both options provide similar benefits with the same level of hospital and medical coverage, Medicare Advantage plans offer other extra benefits and can make your expenses more predictable. 

Additionally, the benefits of Medicare Advantage go beyond the financial savings and can actually impact your health outcomes. When compared to Original Medicare, Medicare Advantage members have fewer inpatient hospital stays, fewer visits to the emergency room and lower readmission rates for beneficiaries with major complex chronic conditions.

To learn more about the differences between Medicare coverage options and determine what best fits your personal wants and needs, visit Humana.com/Medicare101. 

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