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Karen Telleen-Lawton:Making it Through the Medicare Maze

If you’re flummoxed by complex Medicare options, a little background may help you determine which trees might provide the optimal shade for your medical future.

When Medicare insurance began in 1966, it consisted of Part A (Hospital Insurance) and Part B (Medical Insurance — doctor bills and such). Part A’s monthly fee is free for most, but Part B has a monthly fee. There are also deductibles and co-pays just like any other insurance.

In the 1980s, insurers began offering standardized Medigap policies which, for one monthly charge, cover some or all of the fees, deductibles and co-pays.

There are 10 policies (A to N) some of which provide additional coverage such as, hospice, blood or emergency care abroad.

A Medigap plan is the same no matter which insurance company you use. The only differences are the prices (which you can compare) and service quality (which is harder to discern).

The Medicare Advantage (MA) system began as an option for Medicare recipients who couldn’t afford Medigap. HMOs and PPOs which provide MA policies must provide the same Part A and Part B — equivalent coverage. They usually provide additional coverage such as vision and hearing.

Drug coverage began in 2006 as Part D Medicare. You can pick one online by entering your particular prescriptions; the best policies for your prescriptions will be listed. If you choose Medicare Advantage now, your plan includes drug coverage (so you don’t choose a separate Part D plan).

Overall, MA can be less expensive, according to Medicare for Dummies by AARP’s Medicare expert Patricia Berry. But as always, it depends on your needs and your region.

With traditional Medicare, you may be more likely to keep the doctors you have and find new doctors you want, because you’re not limited to the ones in MA’s HMO or PPO. But you are limited by ones who will accept Medicare patients, which is a problem in some areas.

Here is an essential point: Medicare Advantage is a whole different system than Medicare. It is managed care, which results in all sorts of different cascading decisions.

When you choose MA, you are opting out of Medicare proper. You can only redo that decision without consequence once in your life (with some exceptions). If within the first 12 months of choosing an MA, you decide to switch to (or back to) traditional Medicare, you can.

If your MA carrier decides to drop your area, or is guilty of some malfeasance, you can return to traditional Medicare. Other than those circumstances, you may still be able to buy a Medigap policy but it will lack the federal guarantees and protections such as for preexisting conditions.

Given that important nuance, I believe the best place to start looking is with traditional Medicare. Go online to www.Medicare.gov to read the basics, then Google questions that you have. You can also go to a fee-only financial planner, who will help you puzzle out what fits your needs.

Ask your friends what choices they made and whether they are satisfied.

Eventually, you will be reaching out to insurance companies, and then you will be inundated with advice. Best to have at least a primary level of knowledge beforehand. Then you will better understand the tradeoffs among the various policies, so you can find your best and healthiest place in the shade.

— Karen Telleen-Lawton’s column is a mélange of observations spanning sustainability from the environment to finance, economics and justice issues. She is a fee-only financial advisor (www.DecisivePath.com) and a freelance writer (www.CanyonVoices.com). Click here to read previous columns. The opinions expressed are her own.

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