It’s no secret that the rising cost of Medicare is taking a toll on America’s seniors. This is most especially felt by the increase in out-of-pocket expenses. Many retirees are on fixed incomes, so the impact to their quality of life can be detrimental.
As if the rising costs were not enough, an Orlando-based insurance company was recently declared insolvent and its 38,000 Medicare Advantage subscribers were left scrambling to find alternative coverage before their current policies expired on July 1. This situation should serve as a wake-up call for everyone to evaluate their health needs and assess their expenses.
The power is most certainly in the consumer’s hands. There are specific things seniors can do to mitigate the rise of their Medicare expenses. At a minimum, conducting an annual review of their policy and health needs is key to determining the most cost-effective and beneficial coverage. This may appear daunting at first, but the process in conducting such a review can be broken down into three basic areas:
1) Review your current health costs
The question is not whether Medicare insurance costs will increase, but rather it’s a question of by how much and why. If individuals can monitor their updates annually, they’ll have a better grasp on the situation.
Let’s say for instance a person paid $400 a month for both their Medicare insurance premium and any out-of-pocket expenses in 2012, and last year paid $500 a month. The $100 monthly increase is clear, but what may not be are the reasons for it. Was it the cost of drug coverage and supplement coverage itself? Did it increase because the person’s income rose? Did their doctor recommend prescriptions that weren’t covered by Part D? Were there vision, dental or hearing issues that weren’t covered under Medicare or a supplement?
To help simplify the process, many companies – including my own – offer free templates that allow consumers to perform a thorough annual review of their costs..
2) Assess your current health needs
It’s equally important for seniors to examine their health history from the past year. For instance, imagine a senior citizen who didn’t experience any health issues in 2012, but was diagnosed with prostate cancer last year. Consider how much those unforeseen events will impact their health moving forward. Also seniors should take stock on things such as their fitness, energy and activity levels as well as their diet and nutrition. Health conditions can change at the drop of a hat. As we age, it’s essential for seniors to take inventory of their health situation and at the beginning of each year, determine where they are and what coverage they may need.
3) Consider all your options
Once an individual reviews their Medicare healthcare costs and assesses their current health condition, the next step is to consider all of the options. Perhaps a Medicare Advantage plan such as a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO) might be better suited for one person while a Supplement is a better alternative for another.
Seniors should also be sure to take the time to keep key dates in mind. For instance, the annual enrollment period occurs in October, November and December. There’s also the Medicare Supplement birthday rule in several states that allows Medicare beneficiaries the opportunity to shop for a more affordable plan and switch Medicare Supplement providers without going through underwriting. In addition, if an individual moves, they typically have 63 days to make a new plan selection.
While rising Medicare costs are understandably frustrating, they aren’t going anywhere but up. It’s important for seniors to stay on top of it all by reviewing their health costs, assessing their current health situation and considering all their options on an annual basis. Staying organized and keeping track of this information will help in the long run and can potentially lead to significant savings.
Editor's Note: Bill Haynor is the Founder and CEO of SeniorQuote Insurance Services, Inc., a nationwide provider of Medicare-related products and services. Haynor holds more than 30 years of experience in the insurance and the financial services industries and personally knows the issues related to seniors navigating through the confusing Medicare insurance market. To learn more visit http://www.seniorquote.com or contact Haynor here.