Q: I have retiree coverage, but wonder if now that I have Medicare also I should quit my retiree plan?
A: Many times when individuals retire, their previous employer offers them health insurance as part of their retirement package. This is often prior to Medicare coverage, but when you age into Medicare, there may be continued retiree coverage. This is an important option to review. This coverage is often more comprehensive (complete) than Medicare options available to the general public. Even if you have been on Medicare and your retiree product for a while, it is worthwhile to evaluate the options periodically.
If you have just become eligible for Medicare, before you can follow any advice or suggestions from me, you must first contact your insurance plan or plan administrator (your previous employer). They can tell you what will happen to your benefits after you become eligible for Medicare. Some companies continue to offer the same benefit package you currently have, some companies reduce the benefits, and some companies stop the benefits all together. Once you have this answer, you can decide what to do next. You then must look at the price you pay for your retiree plan. There are many retiree plans that change the price of the premium after you reach the age of Medicare eligibility.
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If your benefits continue to be the same, that is wonderful, assuming you can afford the cost of the premium.
If your benefits are reduced, the premiums become unaffordable or your benefits stop altogether you may want to consider dropping your retiree coverage and getting a Medicare Insurance product available in your area.
It is very important to realize that once you disenroll from the retiree plan your previous employer offers, you may never re-enroll in this plan. This is a very important decision and should not be made lightly. Often retiree plans like you have offer additional benefits that Medicare does not offer. For example, benefits like dental coverage, eye care and eyewear, and maybe prescription drugs. These benefits are expensive and could be impossible to replace in another plan.
Fact Box
As individuals retire or age into Medicare, their insurance situation can change dramatically. There are a multitude of options open to those with Medicare. The terms are different, the prices are different, the products offered are dramatically different each year.
The purpose of this column is to give those who are eligible for Medicare, or soon to be eligible for Medicare, some understanding of their insurance options and how it could impact their health and finances.
These questions and answers are meant as a guide to help you understand the complex questions you are now thinking about. Each individual's specific situation may create a different solution. You shouldn't necessarily do what your friends, family and neighbors do.
The prescription drug coverage is a significant issue to consider. Most retiree plans do not have a coverage gap (donut hole) in their prescription drug coverage. This means that your prescriptions likely cost the same amount for you any time you fill them throughout the year. Sometimes this makes an expensive monthly premium a good investment.
Also remember that Medicare plans are calendar year plans. The new plans start in January and run through December. Changes to the plan are generally made for the new year. Retiree plans can be different. For instance a retiree product from a school district is usually July to June. The annual enrollment period for the school retiree plan would have a start date of July 1. This can lead to confusion about when you have the right to change plans. If you stay with your retiree plan your annual enrollment period is in May and June to begin July 1. If you switch to a Medicare plan your enrollment period is October, November and December to begin Jan. 1.
The most expensive option available to you may not be the best option for you. Paying more for your health care premium does not necessarily get you better coverage. The least expensive option also may not be the best. If your plan has a premium that is $0 each month, but your doctors don't participate, you are paying nothing to get coverage that doesn't work for you.
With Medicare insurance plans (either a retiree benefit or a plan available to the general public) you want to be an educated consumer and be certain that you find a plan that suits you and best meets your needs. Remember that each situation is unique and what works for your neighbor may not work for you. Good luck to you with your insurance journey. Don't hesitate to ask someone for help if it becomes overwhelming. Help can be found at the Office for the Aging, Insurance Professionals, my office or by calling Medicare at 1-800-MEDICARE (633-4227).
Janell Sluga is a geriatric care manager certified and works for Senior Life Matters, a program of Lutheran Senior Housing, and has worked in Chautauqua County with seniors for more than 18 years. She is HIICAP (Health Insurance Information, Counseling & Assistance Program) counselor-trained by Office for the Aging. She does not sell insurance or represent any insurance company. She is an unbiased source of insurance and education to help seniors choose the best option for them.
You may submit questions to be answered in later columns to Janell Sluga at Senior Life Matters, 737 Falconer St., Jamestown, NY 14701, or call 716-720-9797, or by email at janells@lutheran-jamestown.org. Please remember that not all questions can be answered in this format, but as many as can be, will be.