Who is Joe Namath? And Why is He a Threat to Your Retirement?

If you are over 40 years old, you most likely know who Joe Namath is, and what made him famous!

Joe had two claims to fame: 1) he boldly guaranteed that the New York Jets team he quarterbacked would win Super Bowl III in 1969. 2) He wore fur coats on the sidelines of NFL football games.

More recently, Joe has resurfaced, not in his fur coat, but in Medicare commercials.

"Did you know that you are missing out on important new Medicare benefits?" ... "You must Act Now before it's too late!" ... "Call the number on your screen, our Medicare experts are standing by."

Unfortunately, these commercials are causing many seniors to make one of the more important financial decisions of their retirement without all the facts. And the implications of this decision can saddle retirees with costs that were not disclosed by Joe, or the Medicare "experts" who answer the phone.

Ignore healthcare costs at your own peril!

Seniors enrolled in Medicare Parts A and B with a Medigap policy (also known as a Medicare Supplement) and a Part D prescription drug plan can count on highly predictable healthcare expenses. Yes, they have to pay their monthly premiums for the Medigap policy and Part D plan, but they have few additional out-of-pocket costs for healthcare beyond their monthly premiums.

And this type of coverage does not have networks. Seniors enrolled with this type of coverage can see medical providers throughout the country, because most healthcare providers accept Medicare. And these are the same doctors who have the power to determine your healthcare needs under the Medicare provisions, not the insurance companies.

But what about the Medicare Advantage plans?

The Medicare Advantage plans pushed by these commercials put senior's financial health at risk. With Medicare Advantage, the predictable costs are gone, and they are replaced by an unknown combination of copays and deductibles. Now the healthcare services are $20 here, $45 there, or $2,000 for a six-day hospital stay.

Seniors with Medicare Advantage plans also have to be aware of provider networks. Try getting health care with a Medicare Advantage Plan while you are traveling. If you are out of your network and need to see a doctor, you will likely pay the entire cost of the service.

And prior authorization requirements are mandatory with most Medicare Advantage plans. Without authorizations, seniors will be required to pay 100% of the cost - regardless of any out-of-pocket spending limits. That's because spending limits only apply when plan members follow the rules of the insurance companies offering the health care coverage. Go out-of-network or get something done without prior approval and you will bear the entire cost of the procedure.

No more challenges

In today's NFL, a coach can challenge a bad call by throwing the red flag in his back pocket. If the coach is right, and the call gets overturned, the team wins the challenge. But Joe Namath fails to mention that seniors who switch coverage to Medicare Advantage Plans may not have the opportunity to switch back to their original coverage without going through medical underwriting. And the new underwriting process gives the insurance companies the ability to deny the Medigap coverage if they see something they don't like.

Having the Medicare discussion with your trusted advisor

Not all Medicare Advantage plans are bad. Some of these plans may be appropriate for wealthier seniors who can financially cover the risk of unpredictable healthcare expenses. But it's important to note that Medicare options can be confusing, and the impact of an uninformed decision can have lasting consequences.

Seniors should be able to rely on their trusted advisor to help them make decisions that lead to a secure retirement. That starts with an informed discussion of how your healthcare needs are going to be addressed in retirement. For most people, the solution is Medicare. And that decision should not be in the hands of someone who is famous for their fur coats, not their knowledge of Medicare.

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