Is This Retirement Benefit Really Not A Benefit At All?

Some retirees pay needlessly for health insurance

You’ve worked hard all your life and now its time to get the gold watch and think about all the things you want to do. But you need to make sure that your former employer’s health insurance is the right choice for you. It used to be that you would work for a company long enough to qualify for their health insurance coverage, and in some cases, other than some co-pays, reasonable deductibles and co-insurance you didn’t have any ongoing cost. But with companies trying to compete globally, things have changed. Many companies are looking at pension plans and retirement benefits as an easy place to cut costs. Some companies are charging higher monthly premiums and offering less coverage.

Original Medicare

Insurance is confusing. Becoming eligible and understanding Medicare is no different. Generally, you become eligible for Medicare Parts A and B on the first of the month in which you turn 65 (Medicare disability exempted). If you have worked and paid into Medicare for 40 quarters (ten years), you automatically receive Part A. Part B has to be elected and has a monthly premium of $96.40 for 2009. This premium is automatically deducted from your Social Security check. Most people elect Part B. In general terms, a beneficiaries responsibility is a $1068 deductible for hospital stays up to 60 days and various costs for other Part A services. Part B addresses outpatient medical care and you are responsible for 20% co-insurance.

Time to weigh your options

First option: If your retiree benefits include health insurance that has a reasonable deductible and co-pays and no or a very small monthly premium, then you may want to go that way. Also look at the type of plan. Is it an HMO or PPO with a limited network? If you have dreams of travelling, then this may be a drawback.

Second Option: If your former employer’s policy has a large annual deductible and co-pays, co-insurance and pay a monthly premium, then check out a Medicare Supplement Insurance Policy. Within 63 days of leaving your employer or having group coverage terminate, you are in a guaranteed enrollment period and no health underwriting is required. You qualify regardless of health. The are many quality  “A Rated” companies offering standardized plans and you can get a Medicare Supplement quote online in a few seconds. You may even be able to apply online or over the phone. When you are making every dollar count, it makes sense to at least explore your options and request a Medicare Supplement quote to compare to your retiree benefits.

Would my former employer steer me wrong?

Having worked with Seniors for a number of years, I could tell you some horror stories about retiree health benefits. So here I go. There is a multi-national company that has a factory nearby and been a fixture in the community for over 40 years. When a worker retires (if they weren’t a contract worker!) they qualify for a health insurance benefit. A PPO with a premium near $160 per month, a $3000 annual deductible which has to be met for all services except a primary physician, 80/20 co-insurance and the premium goes up every year. A $160 monthly premium would more than cover the most popular Medicare Supplement and eliminate the deductible and co-insurance.

Why choose a Medicare Supplement policy?

• Guaranteed issue within 63 days of losing employer group insurance.
• Premium is often less and coverage more comprehensive that employer option.
• You want freedom to choose your own providers, especially if you travel.
• You don’t want to be nickled and dimed with co-pays and co-insurance.
• You want the freedom to choose which company you do business with.

You have worked hard and you need to make your money last. Its important to check your options. Health care cost increase at a much greater rate that inflation. You have paid into Medicare and a Medicare Supplement policy can almost guarantee you that you won’t have any unexpected suprises. Do the right thing and request a Medicare Supplement quote today. It may mean the difference in whether or not you can take that extra vacation each year.