Medicare, Medicare Supplement and Medicare Advantage Basics
It can be a complicated and daunting process understanding how to maneuver through Medicare when your 65th birthday is approaching. And once you understand that, then you will have to decide whether to enroll in a Medicare supplement plan or a Medicare advantage plan.
First, let’s look at some basic Medicare information
Original Medicare is a federal health insurance program for people who are 65 or older, under 65 with certain disabilities or have End Stage Renal Disease or ALS.
You are eligible to enroll even if you are not yet receiving social security benefits and if you have worked past the age of 65. You are also eligible to enroll if you had health insurance through your employer, were covered by a plan with your spouse’s employer or if you are disabled. (There are many exceptions for special cases that I may not be mentioning here that can be discussed on a case by case basis. Contact me and we can go over these.)
Medicare has four basic parts: A, B, C, and D:
Part A (hospital care),
Part B (doctors, medical procedures, equipment)
Part C (Medicare Advantage)
Part D (prescription drugs)
and provides basic coverage for Americans 65 and older. The issue is often with health care costs that are not covered such as deductibles, co-pays, and other medical expenses.
That's where Part C comes in. This is known as Medicare Advantage, and it's one of two ways to protect against the potentially high cost of medical care due to an accident or illness. Another option is Medicare Supplement Insurance, also called Medigap coverage. While Medicare Advantage and Medigap both help cover expenses that are not covered by basic Medicare, there are significant differences between the two plans. We will discuss Medicare Advantage and Medicare Supplement plans in a minute.
When can I enroll?
There are only certain times when you can enroll in Medicare. Depending on the situation, some people get Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) automatically and other people must sign up for it. In most cases, it depends on whether you’re getting Social Security benefits. The first time you can enroll is called your Initial Enrollment Period. It’s a 7-month Initial Enrollment Period that usually:
Begins 3 months prior to the month you turn 65
Includes the month you turn 65
Ends 3 months after the month you turn 65
If you don’t enroll when you first become eligible, you may have to pay a Part B late enrollment penalty, and you may have a gap in coverage if you decide you want Part B later.
If you have health insurance from an employer, it’s still important that you enroll in Part A when you turn 65 since you have probably paid Medicare taxes while you worked. Because of this, you don’t pay a monthly premium for Part A and depending on the type of health insurance coverage you may have, you may choose to delay Part B. Everyone pays a monthly premium for Part B and the premium will vary depending on your income and when you enroll in Part B.
What are the differences in Medicare Supplement (Medi-Gap) and Medicare Advantage Insurance?
MEDICARE SUPPLEMENT INSURANCE
Since Original Medicare does not cover 100% of every cost of healthcare, a Medicare Supplement (or Medi-gap plan) is an insurance policy sold by private insurance companies. It is designed to help pay some of the healthcare costs that Medicare Parts A and B doesn’t cover, like coinsurance, co-payments or deductibles. If you choose a Medicare Supplement plan, you will also need to enroll in a prescription drug plan if you want your prescriptions covered.
MEDICARE ADVANTAGE PLAN
Medicare Advantage (remember this is also known as Medicare Part C) is a United States health insurance program of managed health care or health maintenance organization which operates as a replacement for original Medicare Parts A and B benefits. These plans combine hospital, doctor, and, in many cases, drug coverage into one plan. You can't add a Medicare Supplement plan to a Medicare Advantage plan.
What about choosing my doctor?
With Original Medicare and Original Medicare with a Medicare Supplement plan (Medi-Gap) you can visit any doctor who accepts Medicare.
With a Medicare Advantage plan, your doctor choice depends on whether you select a health maintenance organization (HMO) or preferred provider organization (PPO) plan.
With an HMO plan, you can choose your primary care physician from any doctor in the plan's network. If you choose a PPO plan, choosing a primary care physician is optional. With both types of plans, you will save money by visiting a network provider.
Please note, Medicare Advantage plans must offer emergency coverage outside of the plan's service area, anywhere in the U.S.
Which plan is right for you?
Consider the cost. Medicare Supplement coverage usually has a higher monthly premium but may result in lower out-of-pocket expenses than some Medicare Advantage plans. On the other hand, Medicare Advantage plans can cost less while covering more services, which may be the best option depending on your budget. Many Medicare Advantage plans offer extra benefits such as dental, vision and gym membership.
Consider your choice of doctor and facility. As mentioned above, Medicare Advantage plans can limit you to doctors and facilities within the plan. Medicare and Medicare Supplement plans cover you only if you go to a doctor of facility that accepts Medicare.
Do you need more info or help deciding on which plan best suits your needs or are you ready to enroll in a Medicare Supplement plan or a Medicare Advantage plan? Contact me and I will be happy to assist you in this process and work to find a plan that best suits your needs.