If you are turning 65 within the next 3-4 months, and you live in the USA you are probably getting a lot of mail. You've likely been placed on a list of people who are turning 65 and your name and address have been sold multiple times to different insurance companies who want your business.
It can be very confusing to get all of this information without context. To make things worse, your decision now can affect you for the rest of your life. And if you get it wrong, there can be penalties too.
What should you do with all this mail you are receiving? And should you make your decision by calling the first guy who sent you a mailer?
I for one can tell you that if you do that, it can lead to devastating effects.
For our personal situation, I worked in the financial services industry for over 20 years when my husband turned 65. I figured my husband could figure it out so I didn't get involved. I didn't realize how complicated Medicare was.
So my husband called the first guy who sent him a mailer. We actually wound up with over 4 inches of mail by the end of it, so that first guy was pretty lucky!
The guy signed my husband up for a Medicare Supplement Plan and then asked my husband if he took any medications. Because my husband said that he didn't take any medications, the insurance guy said he didn't need a prescription drug plan. That sounded OK to us, and would save us about $12 per month, so we believed him.
A few years later we found out that what the guy told us wasn't true. Although it wasn't the law that we had to buy a drug plan for my husband, we didn't know that there was a penalty for not doing so. The penalty was building up every month that we didn't buy a plan for him. By the time we realized it, 5 years had passed.
Now my husband pays a penalty that is more than the drug plan itself. And it's not just a one time penalty. The penalty lasts as long as my husband is alive.
I want to make sure that you don't fall into the same trap, so I'm giving you some tips if your sixty-fifth birthday is coming up.
1 Start early. Start learning about the different types of plans at least six months prior to your birthday. This will give you plenty of time to learn what you want. Start with taking this free online Medicare Class. This company won't sell your information, and you don't even have to put in your email address to take the first class.
2 Don't work with a broker or agent who only represents one company. Agents who only represent one company are doing just that. They are representing that company, not you. Work with someone who can compare companies for you and help you in the future if you want to change plans.
3 Ask the broker how long he or she has been in business. Because Medicare is so complicated, we recommend that you work with someone who has been selling that type of insurance for at least three years.
4 Work with someone who is certified to sell Medicare Advantage Plans, even if you plan on taking a Supplement Plan (they don't work together). The reason is that agents who work with those types of plans are held to a higher standard than agents who don't.
5 Don't rely 100% on a broker or agent to tell you all you need to know. Do your own research. Of course you want to work with a broker you can trust, but know enough on your own to know if the agent knows what he or she is talking about. The agent who told us that my husband didn't need a drug plan got no penalty. Because he wasn't certified to sell drug plans, he could tell that my husband didn't need one, and there was no recourse.
There are your five tips for choosing a Medicare Plan. For other tips, check out the other resources on this site.
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