For those receiving Social Security Disability Income (SSDI) and considering their Medicare options, picking a Medicare Advantage plan is probably the best choice you can make. In the long run, traditional Medicare plans (Parts A and B with supplement insurance) offer less coverage, are more costly, and are less convenient than having a Medicare Advantage plan.
Traditional Medicare
By itself, traditional Medicare is not expensive. Part A (hospital) coverage is free and Part B (medical) coverage is relatively inexpensive (generally $96.40 per month in 2008 for single taxpayers with an income of $82,000 or less or couples with $164,000 or less in income). However, traditional Medicare coverage is limited and many people also end up getting supplement insurance (Medigap) and prescription drug coverage (Part D), which both cost extra. Otherwise, trying to go without the extra insurance can leave a person stuck with large medical bills to pay – or unable to pay.
Medicare Supplement Insurance
Unfortunately, the rules for Medicare supplement insurance are different for Medicare beneficiaries under 65 who are on Social Security disability. Those with disabilities on Medicare have very limited access to supplement insurance. That’s because insurance companies can impose up to a six month waiting period for pre-existing conditions before paying benefits. This exclusion of coverage usually applies if you were previously uninsured or didn’t apply within 63 days after previous health insurance coverage ended.
Health History - A Barrier?
Medicare Advantage plans, on the other hand, are required to accept all Medicare beneficiaries unless they have end stage renal disease (permanent kidney failure). Once in a Medicare Advantage plan, though, such plans will accept those who develop end stage renal disease. Otherwise, your health history is not a barrier to enrolling in a Medicare Advantage plan.
In addition, even if your health history is a barrier, your state may be one of the 24 states that severely limit your Medicare supplement insurance options. In Texas, for example, people who are not yet 65 are limited as a group to getting only one Medicare supplement plan (Plan A). This is the most limited standardized Medicare supplement plan of the 12 offered in Texas and offers only very basic benefits. Meanwhile in 2008, Texas has 387 potential Medicare Advantage plans to choose from, 20 of which enroll only people with chronic or disabling conditions.
Medicare Advantage Benefits
As far as coverage goes, once you are enrolled, Medicare Advantage plans at a minimum cover everything offered by traditional Medicare (Parts A and B). They also may offer additional benefits not covered by traditional Medicare like dental care, hearing and vision screening, prescription drug programs, and other services that would otherwise have to be selected under a supplement insurance policy.
While getting extra coverage benefits, your out-of-pocket costs are likely to be less with a Medicare Advantage plan than if you use traditional Medicare and a Medigap policy. Everyone in a Medicare Advantage plan must pay the same monthly premium as those enrolled in Medicare Part B. From that point, your cost will depend on the benefits provided by the plan. There are some plans that don’t require you to pay an extra premium, but have deductible and co-payment requirements. Other Medicare Advantage plans may charge a premium, but have lower deductibles and co-payments. The main point, however, is that your overall costs under a Medicare Advantage plan should be lower.
Finally, Medicare Advantage plans offer more convenience than traditional Medicare, Medigap, and Part D coverage. By having all your health coverage under one umbrella, you don’t have to worry about coordinating benefits between different plans and providers. Under a Medicare Advantage plan, all statements, bills, etc. will come from only one source. This will make your life much easier, especially if you have ongoing health issues.
As with anything else in life, Medicare Advantage plans may not meet everyone’s needs. When evaluating your Medicare options, however, apply the three c’s (coverage, cost, and convenience) to see whether traditional Medicare measures up to your particular needs.
Learn more about Medicare and Medicare Savings Programs.