Medicare Decisions

The First Major Decisions 

If you are eligible for Medicare benefits, there are four major decisions you need to make, and the first 2 decisions can often be made in less than 30 seconds.  The first decision is – decide if you are ready to enroll in Medicare Part A & B. The second decision is -decide if you need to enroll in Part D, which is Prescription Drug Coverage. 

For many people, the first decision is easy.  They already know that they want Medicare benefits to begin as soon as possible, which is usually the first day of the month they turn 65 years old.  However, some who have health coverage through a group plan may not want to enroll in and begin paying for Part B. If you are not sure about if you are ready, then I suggest talking to a licensed sales agent who has experience with Medicare.  They can help you think through your options and the pros and cons of enrolling or delaying enrollment. 

The Second Major Decision

The second decision is equally easy for many people, but in two possible ways.  They either know they need prescription drug coverage so enrolling in Part D as soon as possible is a no-brainer, or they know they do NOT want it, so enrollment is not pursued. The first consideration should be, “Do I already have some form of Credible Coverage for prescription drugs?”  If you do not, then you should be aware of the potential late-enrollment penalties that may come about later if you do not enroll in Part D when you are first eligible to do so.  If you have Credible Coverage for prescription drugs, then you may conclude that enrollment in Part D is not necessary.  I encourage you not to assume anything about your coverage; you should verify if your drug coverage is considered “Credible” for Medicare purpose.  Again, the point here is to avoid late-enrollment penalties, or at least be aware of them.  

The Third Major Decision 

Bam bam – One, two!  Two of the four major decisions can be made by many people within a few seconds.  What are the other two decisions to consider?  I’m glad you asked. 

The third decision requires more knowledge, understanding and consideration.  The third decision is – decide if you want to receive your benefits through Original Medicare Parts A & B, OR if you want to receive your benefits through a Medicare Advantage (MA) Plan.  Note that this is a “fork in the road” decision, but there’s an IMPORTANT subtle nuance to point out here.  The decision is NOT a choice between keeping Parts A & B or enrolling in a MA Plan.  You must have and continue to keep Parts A & B to enroll in a MA Plan.  In other words, even if you choose to enroll in a MA Plan, you must continue to pay the Part B premiums.   

Rather, the decision is centered around your personal preferences related to how you want to RECEIVE your Medicare benefits.  Either your claims will be sent to Medicare or sent to a private insurance company.  Either you will accept the cost sharing responsibilities under Parts A & B, or you will accept the cost sharing responsibilities under the MA Plan.  These are sort of distinctions being made within the third decision. 

Minor Decisions Under the 3rd Major Decision 

Sub-decision 1 (related to the MA route) 

Before proceeding to Major Decision Four, I want to point out a few “sub-category” decisions that you’ll need to navigate depending on what you decide to do with the 3rd decision.  Knowing what these “sub” decisions are ahead of time may influence your direction for decision three. 

Here’s what I mean – If you decide to go with a Medicare Advantage, you then will need to choose which TYPE of Medicare Advantage Plan.  Are you willing to go with a HMO network plan or would a PPO network plan serve you better?  There may also be Private-Fee-For-Service (PFFS) or Medicare Savings Account (MSA) Plans offered in your area.  Which type will serve you well? 

Sub-decisions 2 (related to the MA route) 

Next, you’ll need to decide on an insurance carrier and a particular MA Plan to enroll in first.  I say, “enroll in first” because you will get the chance to change MA Plans each year during the Annual Election Period. 

Sub-decision 1 (related to the Original Medicare route) 

Going up a level, back to your third decision, if you choose to go the Original Medicare route, then you need to decide if you want to purchase a Supplement Plan (also known as a Medigap Plan) to cover the gaps in Original Medicare.   

What do I mean by gaps?  Simply this- Parts A & B were not designed to cover 100% of every approved hospitalization and medical claim.  Medicare pays a portion of the approved amount, and the Beneficiary is responsible for the remainder.  For example, Part B of Original Medicare only covers 80% of the Medicare-approved claims, leaving the Beneficiary responsible for the other 20%.  This 20% coinsurance amount is an example of a “gap” that a Medigap Plan could cover. 

Many people who choose to receive benefits from Original Medicare prefer to have a Supplement Plan in place to cover the gaps.  So, perhaps the real question here is – can you afford to pay the premiums for a Medigap Plan? This is a premium that is in addition to your Part B premium.  

Sub-decisions 2 (related to the Original Medicare route) 

If you want a Medigap Plan and can afford it, the next decisions to be made are – which Medigap Plan version do you want (Click here to jump to my page about Medigap Plans) and what insurance carrier do you buy it through?   Do you prefer to stick with large, well-branded insurance carriers or are you comfortable with using a lesser-known insurance carrier?  Talking through these decisions with a licensed, independent sales agent is advisable as they usually have resources to shop around and show multiple quotes from a variety of carriers.  

The Fourth Major Decision 

Moving on.  We have one more decision to make and, in my opinion, it may be the most important of all decisions related to your Medicare journey.  I have saved the best for last. 

    • Do I want to work with an independent agent who represents multiple insurance companies, or do I prefer to work with an employee of one insurance company?” 

    • Do I want to work with someone who will sit with me face to face, or am I comfortable with dealing with an agent via telephone and email only? 

    • Do I want to build a relationship with an agent who can guide and serve me for years to come, or am I just looking for a transactional person to get me going?” 

    • Do I want an agent who does Medicare part-time, or do I want an agent who considers insurance business her full-time career? 

Like it or not, the Medicare “journey” requires you to make decisions.  For many, if they turn out to be mistakes, you can learn from it and alter your choice.  However, there are a few decisions that are hard to unwind, so be careful.  Again, I encourage you to seek advice.  If you are like most people approaching Medicare for the first time, you probably don’t yet know all the right questions to ask and a good agent will not only guide you through your options, but then provide good customer service to you in the future.