I came across a very misleading web site by a group called the American Grandparents Association recently. I am not going to link to it because the information on Medicare on the site is grossly misleading (so I am guessing all the other stuff supposedly informing seniors about diapers and cruises and annuities is equally screwed up). For starters, despite what the Medicare Advantage vs. Medigap article says, you are probably not blowing out that retirement cake these days until you are age 66, not at age 65. The law on Social Security Full Retirement Age (FRA) changed about 30 years ago. You would kind of expect a group called the American Grandparents Association to know that? The errors included
- The change in Social Security law has a lot of effects on how you sign up for Medicare because Congress did not change the Medicare age at the same time it changed the FRA. So this article is wrong. A person does NOT automatically get a Medicare card at age 65 unless he or she previously decided to take Social Security before FRA and thereby reduce their monthly Social Security payment for the rest of their lives (fewer and fewer grandparents will do that). If you are not already receiving Social Security as you are about to turn 65, you MUST proactively sign up for Medicare if you want it (and typically you will want it).
- The choice is NOT between Original Medicare and Medicare Advantage (note that not all Part C plans are called Medicare Advantage despite the wording in many articles). Medicare Advantage is effectively a supplement to Original Medicare, not an option to Original Medicare. You MUST sign up for Original Medicare Parts A and B first (see point 1 above) before you can choose a public Part C Medicare Advantage health plan as your supplement
- The key difference between choosing a public Part C Medicare Advantage health plan as your Original Medicare supplement and choosing a private Medigap plan as your Original Medicare supplement is NOT described correctly in this article and in almost all other articles on the Internet. The difference is just the same choice most of us grandparents have probably faced for the last 30 years at work: a local HMO vs. traditional “Blue-Cross-like” coverage that probably works the same everywhere in the United States (which we called Master Medical way back in the day). As a person on Medicare, that translates to two major questions: What insurance do favorite doctors accept? Are you a snowbird?
- The annual out of pocket (OOP) spending limit of no more than $6700 in all public Part C Medicare health plans – including Medicare Advantage plans – is a great benefit and is not available in Original Medicare or in all private Medigap plans (and not available at all in some states via the private Medigap approach). But the OOP limit only applies to medical expenses, not drug coverage.
- With a public Part C Medicare health plan, you do NOT have to “negotiate with the private companies regarding all terms of care and payment.” (Nor do you have to negotiate with the government if you choose the Medigap approach. This whole thing about “negotiating” on the American Grandparents web site is just crazy talk.)