Thursday, October 15, 2009

Choosing a Medigap Plan

In the United States, Medicare is the nearly universal plan for adults over the age of 65.  However, it does not cover all costs.  As a result many older adults also buy Medigap plans.

There are twelve plans to choose form--already a difficult choice.  Some older adults purchase right away when they become eligible at age 65.  Others wait.

For those who choose to wait over the next several years, the choice may become more difficult in the next few years as indicated in a New York Times article.

The health care bill that is under continuing discussion in the Senate would change the copayments for visits in the year 2015.  If that were to come to pass, an older adult deciding whether to buy into this program in the years between now and 2015 would not only need to compare the potential savings on out of pocket costs from buying a plan now with the savings on premiums from not buying a plan now, but also look at the tradeoffs from facing higher copayments on new policies bought in the future.  Definitely an incentive to purchase now.  However, this is an information subtlety that many older adults may not understand.

The question the government must address is whether this is an appropriate incentive for older adults and how to provide the information in ways that will make decision making as rational and as well grounded as possible.

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