When planning for retirement, one big question pops up: Should you choose a Medigap plan or stick with employer retiree coverage? If you live in Arkansas and are trying to decide, this guide will break it all down for you.
Navigating Medicare doesn’t have to be complicated. The Overton Agency team is here to help. Call now at 501-881-2050 or stop by 1201 Oak St, Conway for personalized support.
What Is Medigap?
Medigap, also known as Medicare Supplement Insurance, helps cover the costs that Original Medicare (Part A and Part B) doesn’t pay. These out-of-pocket costs include copayments, coinsurance, and deductibles. Private insurance companies offer at least one Medigap policy type, and these plans work with Medicare to provide extra coverage. Medigap is private supplemental insurance that helps cover these gaps in your Medicare coverage.
Key Features of Medigap Plans
- Covers out-of-pocket costs like deductibles and copayments.
- No network restrictions, so you can see any doctor that accepts Medicare.
- Guaranteed renewable, meaning insurers must offer at least one Medigap policy option as long as you pay your premium.
- No drug coverage, so you may need to buy a separate Medicare Part D plan for prescriptions.
- Beneficiaries with Medigap can have more predictable health care costs.
- Medigap does not work with Medicare Advantage plans; you must have Original Medicare to purchase Medigap.
What Is Employer Retiree Coverage?
Many employers offer retiree coverage from a former employer to help former employees pay for health costs after retirement. This coverage often works with Medicare but can differ widely based on the employer.
Key Features of Employer Retiree Coverage
- May include drug coverage, eliminating the need to buy a separate Medicare Part D plan.
- Can cover additional benefits, like vision, dental insurance, and hearing.
- Often subsidized, which means the employer may help pay the premium.
- Plan rules can change, and employers may reduce or cancel coverage over time.
- Retiree insurance is secondary to Medicare, meaning Medicare pays first, and the retiree plan covers additional costs.
For help comparing these plans, Overton Agency, LLC, provides guidance tailored to your specific needs.
Comparing Medigap and Employer Retiree Coverage
| Feature | Medigap Plan | Employer Retiree Coverage |
|---|---|---|
| Cost | You pay a Medigap premium plus a Part D premium for drug coverage. | The employer may help cover some costs, making premiums lower. |
| Doctor & Hospital Access | See any doctor that accepts Medicare. | May have network restrictions. |
| Drug Coverage | No drug coverage included; must buy a Medicare Part D plan. | Usually includes Medicare drug coverage. |
| Plan Stability | Guaranteed as long as you pay your Medigap premium. | The employer can change or end the plan. |
| Extra Benefits | Only covers Medicare-related costs. | May include dental, vision, and hearing. |
Who Is Eligible for Medigap?
To buy a Medigap policy, you must:
- Be enrolled in Medicare Part A and Part B.
- Purchase Medigap during the Medigap Open Enrollment Period, which lasts six months from the month you enroll in Medicare Part B.
- Medigap insurers may impose restrictions or charge higher premiums if you apply outside of this period.
Facts About Medigap Enrollment
- Many Medicare beneficiaries can choose between Medigap or retiree coverage.
- Beneficiaries are enrolled in Medicare Parts A and B before applying for Medigap.
- The Centers for Medicare & Medicaid Services (CMS) requires Medigap insurers to offer policies under specific regulations.
- Medigap insurers may require you to undergo medical underwriting if you apply outside your six-month Medigap Open Enrollment Period.
Which One Should You Choose?
The right choice depends on your personal needs. Ask yourself:
- Do you want stability? Medigap policies are guaranteed renewable, while employer plans can change.
- Do you need drug coverage? Employer retiree coverage often includes Medicare drug coverage, but Medigap does not.
- Do you travel often? Medigap policies allow you to see any doctor that accepts Medicare, which is great for frequent travelers.
- What are the costs? Compare the total cost of premiums, deductibles, and copays under each option.
- Are you satisfied with your current coverage? Some retirees prefer the benefits of employer-sponsored retiree benefits or Medicaid if they qualify.
How to Enroll in a Medigap Plan
If you decide that a Medigap plan is right for you, follow these steps:
- Enroll in Medicare Part A and Part B. You must have Original Medicare before you can buy a Medigap policy.
- Choose a Medigap plan. Compare different types of Medigap policies based on coverage and cost.
- Apply during the Medigap Open Enrollment Period. This six-month period starts when you turn 65 and enroll in Medicare Part B.
- Buy a Medigap policy. Contact a licensed insurer to find a plan that fits your needs.
Final Thoughts
Choosing between Medigap and retiree coverage is a big decision. Medigap plans offer stability and flexibility, while retiree coverage from a former employer may save you money and provide extra benefits. Compare your options carefully to find the best health coverage for your retirement years. If you need more information about Medicare or Medigap enrollment, contact your State Health Insurance Assistance Program (SHIP) for guidance.
For expert advice and personalized assistance, reach out to Overton Agency, LLC, at 501-881-2050. We are located at 1201 Oak St, Conway, Arkansas and ready to help you find the best coverage for your needs.
