If there's one expense that could wreak serious havoc on your budget in retirement, it's healthcare. As people get older, health issues tend to arise. And even if you do a great job of looking after yourself, you may still find yourself running to doctors and specialists more often than you'd like.
One way to keep your healthcare costs more manageable is to choose the right Medicare coverage. And now's the perfect time to do it.
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Medicare's fall open enrollment period is currently underway. Between now and Dec. 7, existing Medicare enrollees can make changes to their coverage.
That could mean switching from one Part D drug plan to another. Or it could mean signing up for a Medicare Advantage plan for the first time.
If you're not familiar with Medicare Advantage, it may seem like a whole new world. As an overview, Medicare Advantage plans are offered by private insurers and are required to provide at least the same level of care as original Medicare. Medicare Advantage plans typically include drug coverage, making them a convenient and effective way to manage your health.
Here are some of the reasons you may want to choose a Medicare Advantage plan this year during open enrollment.
1. You can get extra benefits
There are a number of important healthcare services original Medicare won't cover. These include dental exams, vision checks, eyeglasses, and hearing aids.
Having to pay for these services yourself in full could eat into your retirement savings. The good thing about Medicare Advantage plans is that they offer supplemental benefits beyond what original Medicare covers. This means you may be eligible for coverage for dental cleanings, eye exams and glasses, and hearing aids.
On top of that, Medicare Advantage plans commonly offer extra health and wellness benefits. These can run the gamut from gym memberships to meal delivery services.
Because no two Medicare Advantage plans are the same, it's important to review the benefits offered by each plan you're looking at before making your choice. But if you find a plan with a lot of great benefits you'd qualify for as a patient, then it could pay to make a switch.
2. You may not have to pay a premium
A good number of Medicare Advantage plans have a $0 monthly premium. That said, Medicare Advantage enrollees still have to pay a Part B premium. But moving onto a $0 premium Medicare Advantage plan could be a cheaper prospect than retaining coverage through original Medicare.
This especially holds true because it's common to need a Medigap policy in conjunction with original Medicare. But if you don't have to pay a Medigap premium and can get a $0 premium Medicare Advantage plan, it could put more money in your pocket -- and help you stretch your retirement income further.
3. Your out-of-pocket costs will be capped
When you're retired and on a fixed income that consists of savings and Social Security, unexpected healthcare expenses can be scary. Another nice thing about Medicare Advantage is that it sets a yearly limit on your out-of-pocket spending.
Original Medicare, on the other hand, does not have a limit on out-of-pocket spending, leaving you vulnerable to huge bills. It's for this reason that enrollees in original Medicare are encouraged to buy a Medigap policy. But even so, you may find that this feature of Medicare Advantage gives you more peace of mind as you try to stick to a retirement budget.
An option worth considering
Medicare Advantage plans aren't perfect. They commonly limit enrollees to specific provider networks and often require prior authorization for screenings and services -- a process that can sometimes delay care or result in a denial of care.
But it pays to at least explore your Medicare Advantage plan options during open enrollment. If you find a plan that works for you, it could result in big savings.
