Puzzled by Medicare?
By Steve Seely, Integrity Health Advisors ~
Since we are in the Annual Enrollment Period, October 15th – December 7th, you may be thinking about your Medicare coverage and wondering:
- Is the Medicare plan that I got years ago still the best for me?
- Is there a less expensive alternative or one with more coverage than what I have now?
- What exactly is the difference between Medicare Advantage and Medicare Supplement plans?
No doubt about it, Medicare is confusing! Here I will attempt to simplify things a little bit for you.
The “Original”, basic Medicare consists of two parts, Part A which covers hospital expenses and Part B which covers medical expenses. The problem with only having Parts A and B is that they come with significant gaps in their coverage. In the case of Part A there is a deductible that has to be paid each time you are admitted to the hospital, $1,408 in 2020. If you are admitted to the hospital three times in one year, you will pay that deductible three times, or $4,224 in this example. Part B has an annual deductible of $198 in 2020, but more significantly, you are committed to pay 20% of all medical bills.
There are two different approaches to reducing or eliminating these exposures:
- Medicare Supplement (also known as MedSupp or Medigap) plan, along with a separate Part D drug plan
- Medicare Advantage plan, which includes the Part D drug plan
MedSupp + Part D Drug plans
Medicare Supplement plans simply fill the gaps in Parts A and B so that you pay little or no additional copays for services, but with few additional benefits. They typically range from $75 – $150 per month for a 65 year old, depending on the level of coverage you get (and generally increase each year). You will also need to acquire a separate Part D drug plan, which tends to be in the $15 – $40 range per month for the more common plans.
Medicare Advantage plans (also known as “Part C”) tend to have much cheaper or no monthly premiums. You pay a copay for services as you use them in an ala carte “pay as you go” approach, with many copays $0. Advantage plans have an annual “Maximum Out of Pocket” feature, with a cap on the amount you will pay for medical services in a given year. Most Advantage plans incorporate Part D, so all hospital, medical, and drug coverage is under one roof. They also offer a wide array of additional benefits, such as money for eyeglasses or hearing aids, over the counter purchases, no-cost gym and rec center membership, and many other benefits. Many also include dental plans for a small additional cost, or even include them in the plan. HMO Advantage plans have a network of doctors and pharmacies, and typically require referrals to see specialists. PPOs have more open network requirements than HMOs and no referral requirements.
If you or anyone you know is turning 65 in the next year or two, or if you already have Medicare and would like a no-cost assessment of whether your plan is still appropriate to your situation, please contact me at:
Integrity Health Advisors