A dictionary says a “snowbird” is someone who travels to warm climates for the winter.
While retirement brings more freedom to spend several months away from home for whatever reason, one significant restriction for seniors is whether or not their health care coverage will follow them. And those over 65 are most likely looking at Medicare, which only allows you to enroll in one state.
Let’s look at the Medicare options.
Original Medicare and a Supplement Insurance (or Medigap) Plan
The most obvious solution would be Original Medicare, a federal program that lets you see doctors and use hospitals anywhere in the U.S., as long as Medicare is accepted. (Its reach extends to Puerto Rico, Guam, the U.S. Virgin Islands and the Northern Mariana Islands.)
However, Original Medicare only covers 80% of approved Medicare Part A (hospital insurance) and Part B (medical insurance) expenditures, with no upper limit to your exposure. So most people with Original Medicare will opt for the further protection of a private supplement insurance (or Medigap) plan. The different Medigap plans cover varying percentages of the Medicare-approved costs not paid by Medicare, all the way to total coverage.
The upside is that Medigap plans also cover you nationwide if the doctor or facility accepts Medicare. And they cover some emergency care provided outside of the country. The downside is that the Medigap plan premium is an additional ongoing expense.
As you seek out Medicare providers wherever you are, you will want to look at the three categories of Medicare acceptance:
A participating provider accepts the Medicare reimbursement as full payment of services.
A non-participating provider accepts Medicare reimbursement but reserves the right to charge you up to 15% more than Medicare’s approved coverage.
An opt-out provider does not accept Medicare at all.
Original Medicare also doesn’t cover prescription drug expenses, so you most likely will enroll in a private Medicare Part D prescription drug plan. Some plans will contract with a preferred pharmacy. If your plan does, you will want to choose a plan where the retail pharmacy has a nationwide footprint and you are allowed to use it. Other plans may restrict you to a more local or regional network of pharmacies, so check to see if mail-order pharmacies offer a solution.
Medicare Advantage Plans (or Medicare Part C)
Medicare Advantage plans, offered by private insurers, match the coverage provided by Original Medicare, plus some additional benefits such as prescription drug, dental and vision coverage.
These plans offer varying combinations of premiums, deductibles, coinsurance and copayments. While your selection should be based on your available budget and resources, you can change plans annually to reflect your medical needs and financial situation.
But Medicare Advantage plans also come with local or regional networks of providers under contract with the plan’s insurer. All plans must cover the cost of emergency care beyond the network. But the different types of plans determine how restricted your network will be, if you can receive any out-of-network coverage (beyond an emergency), or if you can pay more out-of-pocket to see a non-participating provider. Typically:
HMOs, or Health Maintenance Organizations, have the greatest restrictions.
PPOs, or Preferred Provider Organizations, offer more freedom to receive care from out-of-network providers, but at a higher cost.
PFFS, or Private Fee-for-Service, usually doesn’t have a local provider network.
SNPs, or Special Needs Plans, include specific networks of providers within a restricted area.
MSAs, or Medical Savings Accounts, have networks but must provide at least some out-of-network care at a higher cost.
A few private insurers offer domestic travel benefits or “passport” programs that can work with various Medicare Advantage network types. These programs offer the flexibility to receive medical care at in-network costs while you are away from home. Before traveling, you would contact the insurer and provide your destination zip code to activate your travel benefit and let the insurer help you find in-network providers there.
You are usually limited in the number of months of coverage away from home, and coverage is not necessarily available in all counties in all states. Once you return home, you would contact the insurer to deactivate the travel benefit.
Takeaway action step: The most efficient way to identify what Medicare Advantage plans offer travel benefits in your location might be to work with an insurance broker specializing in Medicare coverage. The alternative is to identify insurers you like and contact them directly to see if they offer plans with domestic travel coverage.
Medicare Cost Plans
Possibly a limited-term solution … Medicare Cost Plans blend parts of Original Medicare with Medicare Advantage. They are offered by private insurers approved by Medicare, who work to provide additional benefits beyond your Original Medicare coverage. (Where Medicare Advantage plans replace your Original Medicare, Medicare Cost Plans work with it.)
These plans appear similar to Medicare Advantage plans, with networks of providers. However, they offer greater flexibility in your choice of Part D prescription drug plan and your use of out-of-network providers. Costs for out-of-network visits are covered by Medicare Part A and Part B (rather than the private insurer), subject to their deductibles and coinsurance.
While these plans appear ideal for snowbirds, they are only available in limited and specific areas of the country and are being discontinued due to new federal laws. (The government is trying to remove the plans from counties with two or more competing Medicare Advantage plans.) Today, eight states offer Medicare Cost Plans in some or all counties.
If you opt for a Medicare Cost Plan and it becomes unavailable, you can easily move to a Medicare Advantage plan or Original Medicare. You will also be allowed to access a Medigap plan without facing the obstacle of medical underwriting. (If you were switching back to Original Medicare for some other reason, insurers could deny you access to their Medigap plans, limit coverage of pre-existing conditions or charge much higher premiums.)
Takeaway action step: Use the Medicare Plan Comparison Tool to find if a Medicare Cost Plan is available near you, or ask your State Health Insurance Assistance Program (SHIP) to help.