Taking care of your health, especially over the age of 65, requires an understanding of your individual medical needs. In addition, finding the right services and providers can take some thoughtful research and consideration related to your particular requirements.
With several options depending on your requirements, choosing health insurance can often be a daunting process. Here’s how to choose the right plan for you and your family.
1. Plan Ahead
Don’t delay in researching your healthcare options. Generally, when you are feeling well, this is the best time to consider your health needs. With a clear mind, you will be able to thoroughly explore the pros and cons of providers and facilities to get the necessary data you need to find the best fit for you. You can also save the list of your specific health care providers to refer to later.
2. Identify Your Preferences
Whether you’re planning for yourself or finding care for a loved one, it’s essential to share your options with others who are part of your care team. It might include sharing which doctors you like, which hospital you prefer, or choosing a nursing home close to family and friends.
3. Select Your Plan Type
For many people, the most critical factor is the cost of health insurance. Health Maintenance Organization (HMO) plans are the least expensive, offering lower monthly premiums and lower costs for medical services. You can see a specialist only when your primary care physician (PCP), who is also responsible for your regular checkups, refers you. So, the downside is that HMO plans are most restrictive.
PPO (Preferred Provider Organization) plans charge higher premiums in exchange for more flexibility in choosing your providers. For example, you don’t need a referral to see a specialist, and you can use out-of-network doctors as well. However, you’ll incur higher costs, and you may have to file a separate insurance claim.
The Point of Service (POS) plans offer the benefits of HMO and PPO plans simultaneously. You have access to see in-network and out-of-network providers and facilities. However, when you see an in-network primary care physician (PCP), you have no deductibles, and preventive care is covered, and they may refer you to a specialist. Also, you have the option of looking at an out-of-network provider but with a higher cost.
4. Determine Which Plan Best Fits Your Financial Situation
There is more than just a premium as an expense when it comes to getting a health cover. Consider the following expenses that may affect your budget.:
- A copayment may be required every time you visit a provider.
- Co-insurance payment refers to the amount the insurer has to pay for certain services—for example, 20% of a hospital visit.
- The deductible needed you to pay a certain amount before coverage begins.
- Policies have set limits and can vary widely. Less expensive plans will have an upper limit, so don’t be fooled by low premiums. You may end up paying a large medical bill.
5. Utilize Tax-Advantaged Medical Spending Accounts If Available
There are three main types of medical expense accounts: Health Repayment Account (HRA), Flexible Spending Account (FSA), and Health Savings Account (HSA).
A health repayment account (HRA) is an employer-funded health expense account. Some plans may include an HRA to help cover the employee’s out-of-pocket expenses on a tax-free basis.
Another type of medical expense account is a flexible spending account (FSA). It allows you to spend on different kinds of eligible expenses. There are three kinds of FSA accounts; (i) Health care FSAs, (ii) Dependent care FSAs, and (iii) Limited purpose FSAs.
If you’ve a high deductible health plan (HDHP), you can fund up to $3,600 ($7,200 for a family) in 2021 in a health savings account (HSA). People age 55 and older can contribute an additional $1,000 per year. You can also make a lump-sum IRA transfer to your Health Savings account up to the contribution limit. Each contribution reduces your taxable income.
If you retire before 65, you can still deposit the amount in a health savings account. For example, you can fund an HSA from your pension, which will reduce your taxable income. However, unlike an FSA, you don’t need to liquidate the health savings account every year, so you’ll continue to enjoy tax-deferred growth from your investments. But, make sure you end contributions six months before you enroll in Medicare. Otherwise, you may get fined.
Once you’re on Medicare, you can use a health savings account to cover the following costs:
- Medicare Part B premiums (even if it’s paid out of your Social Security retirement benefit, you can pay yourself.)
- Medicare Advantage Plan (Part C)
- Prescription Drugs Scheme (Part D)
- Medicare Prepaid Expenses
- Long term care insurance premium
Add a Medigap or Medicare Supplement plan if….
- You need a plan that covers some or all of the costs that Original Medicare does not cover.
- When your medical care outweighs higher premiums.
- If you don’t need prescription drug coverage, or you want to buy it separately.
- You need the freedom to see any doctor who accepts Medicare.
Choose to stay with Original Medicare if …
- You don’t want to go to the doctor often.
- You’ve other coverage through an employer.
- Paying about 20% of all your medical and hospital costs is affordable for you.
- If you don’t need prescription drug coverage, or you have it already.
Choose a Medicare Advantage with a prescription drug plan if….
- Paying a lower monthly premium than Medigap is essential to you.
- You need to get Medicare Part D bundled with your Medicare Parts A and part B.
- You prefer having predictable copayments and deductibles instead of paying a deductible or 20% of costs.
- A plan that pays 100 percent of your costs once you have reached the out-of-pocket limit.
- You want to see doctors in your plan’s network, which will save you money.
- You do not plan to see a doctor while you are away.
- You want a single card facility and one company for your Medicare.
- The plan includes extras you may want, such as dental and a free gym membership.
Indeed researching and finding the right plan for you can be exhaustive at times. Even though you research everything, there’s a chance that you might miss some important points regarding choosing a suitable plan. Therefore, we suggest consulting our licensed agents specializing in Medicare to help you assess your medical needs and suggest a suitable Medicare package.
Plan your health with Simpler Horizons today!