There are four maxims, or concepts, I throw out at nearly every new Medicare enrollee. They are meant to help reassure people and give them a few things to think about as they continue to learn more about their choices.
Typically, I am not throwing all four of these things out at once, but they are points I hit in our first appointment where the focus is on educating people about their options. This is the first time I’ve ever thrown all four out at one time. I hope that even without the context of a larger conversation they make sense and help you out.
Maxim #1: Most Everything Inside Medicare is Better
First, is that most everything inside Medicare is better than most everything outside Medicare. That’s a pretty bold claim and what do I mean by that? Well, the main thing I mean is that if you are paying for your own health benefits now either through individual coverage or COBRA you are going to be spending a LOT less every month on premium once you age into Medicare. On top of that your out of pocket costs generally drop as well. If you have group coverage now then whether it’s better or not really depends on how good your current group benefits are, but generally Medicare is still going to be less.
Maxim #2: It's touch to make a bad Medicare Decision
Second, this is kind of a corollary of the first maxim and that is it really is tough to make a bad decision in Medicare. You don’t need to feel like the decision you make when you turn 65 is going to define your choices for the rest of your life. You have opportunities to make changes and, again, for most people their out of pocket costs are going to go down. Your choices vary between original Medicare with a separate Part D plan and a supplement or getting a Medicare Advantage plan (an HMO or PPO generally). While I do think there are some choices that are better than others, even the “others” are generally better than what is outside of Medicare.
Maxim #3: Make Medicare a Financial Decision
Third, It’s a financial decision, not a health decision. When I am meeting with people often they will say something like, “I’m healthy so I really don’t need much.” Or they might say the opposite, “I’ve got all sorts of issues so I need the best insurance I can get.” Here’s the thing, when you turn 65 and age into Medicare you are guaranteed issue. You could be a one-legged diabetic with a heart transplant and they can’t even ask. Not the supplement company, not the Part D company, not the Advantage plan. What you need to focus on is what plan is affordable in regards to the monthly premium, both now and 15 to 20 years from now. In addition to that think about the potential out of pocket costs. Do you have income and savings to fall back on to pay those costs and will that income or savings be there on down the road?
Maxim #4: You Never Get to Keep All The Money You Save
Fourth, You don’t get to keep all the money you save. What I mean by that is the lower you drive your monthly costs the higher out of pocket costs you might face. In life, generally the less expensive something is…the quicker it’s going to break, it might be harder to use, or it might not last as long. With Medicare the less premium you pay generally means the more out of pocket costs you might have. The more premium you pay the less out of pocket costs you might have. Everything is on that continuum and you just have to figure out where in the range of Medicare insurance products you need to be.
So that’s it. My four Maxim’s of Medicare. Please read some of my other articles or watch some of my videos to get a better understanding of your Medicare options and what strategies you might want to use.