3 Case Studies for Go-Go Retirees
The early years of retirement can be the greatest time of your life. For those folks who enjoy good health (physical and financial), it is a time to travel, play, see family and enjoy the fruits of a family and career. And for the first time, your health insurance should not be either ridiculously expensive or tied to your employment. Medicare can be great, but it requires some decisions upfront that can impact your healthcare for the rest of your life – so it is worth spending a little time understanding costs and alternatives. Let’s look at three typical case studies about choices and decisions.
Case 1 – Healthy couple, traveling more, part-time commitments
This could be my wife Martha and me – but we are hardly unique. We both turned 65 in the same year, our 7 month Initial Election Periods (IEP – 3 months before and after our 65th birthday, birthday month and 3 months after) overlapped, so I could drop my work coverage, retire, and both go on Medicare in the same month. We had similar priorities for lifestyle – we both want to be able to travel both domestically and abroad, have access to any doctor that takes Medicare, and we would rather pay a little extra for comprehensive coverage with very limited out-of-pockets.
The critical coverage issue for us was emergency care while abroad – and Medicare Supplements D,G, M and N provide up to $50,000 of emergency care outside the US, with a 20% co-insurance payment. These plans are relatively cheap (we pay $90 and $110 per month) and cover virtually all of the costs that Medicare does not cover in the US.
The solution was simple – Medicare Supplement with original Medicare. We got supplements during our IEP for Supplements (first 6 months after turning 65 and taking Part B). This is the key thing to remember for this case – Supplements are a great deal for young retirees who want to travel. And you have 6 months after you turn 65 and take Part B to sign up for a Supplement with no Medical Underwriting – they must take all comers. You can read more about Supplements (here). I normally suggest that folks take a Plan G or N, and then go out to play – expenses are effectively capped at a predictable cost in the US, with great coverage aboroad. A word of caution about Supplements – they are fundamentally all the same except for price, and price varies tremendously on a state-by-state basis and by issuing company. Find the lowest cost plan that you can from a reputable underwriter – and it may make sense to check out additional benefits. I switched plans this year and the Supplement includes free access to my favorite health club – a benefit equal to half the monthly cost!
Finally, don’t forget to get a Part D plan – whether you are taking prescription drugs today or not. The mechanics of Part D provide for penalties the longer that you do not enroll – and you can get very cheap plans which are helpful with occasional scripts. We got plan this year for $6.50 per month, which we will get back with a few prescriptions.
Medicare Supplement Plan G + Cheap Part D drug plan
Case 2 – Healthy couple, wants to spend over 60 consecutive days a year at their condo in Mexico
Mexico is great for active retirees, particularly to escape the cold winters of New England. We have friends who spend time from Mexico to Argentina – but if you are out of the US for over 60 days the only solution is an Advantage Plan including worldwide coverage and Medicare Part D. Certain Advantage Plans offer worldwide emergency coverage for stays up to 6 months (good), some also offer urgent care coverage (better), and some offer extended stay options out of the home market (best). Get an agent (like us) to do the digging – but it is worth it. Most Advantage plans are $0 premium plans in competitive markets today. With some work, most people can find a great plan with extended emergency care abroad.
Medicare Advantage is tricky – the plans change every year and are offered on very limited geography; sometimes defined by Zip Code. But if you qualify, these plans are great low-cost coverage in the home market and extended coverage offshore. As a plus, most of these plans today include a Part D drug plan at no additional cost.
$0 premium Medicare Advantage Plan with worldwide emergency and urgent care, and Part D (drug plan) included
Case 3 – Healthy people traveling a long way from home
The third case is for everyone who travels outside the US – plan for a way to get Home in an emergency! Medical emergencies happen when you travel – and normal airlines may not be a medically feasible way to get home. You can charter an air ambulance for a few hundred thousand dollars, or you can participate in a membership in a medical evacuation program (technically not insurance) for a few hundred bucks. We work with Medjet – which is a great provider – but there are others out there. Whatever you do, get a program with a reputable service provider, and then go play.
Participate in an emergency medical transport program.