Whether you are new to Medicare or have been on it for a while, it’s likely you’ve never had your options laid out before you as a simple set of choices. Our goal here is for you to leave knowing the basic choices available to you when you have Original Medicare. To be clear, this will only outline your options within the scope of Medicare insurance. If you keep employer coverage or choose to participate in non-insurance related products (such as religious medi-share style policies), then this will not help you with those options. We can support you with questions on those areas, if needed independently.
Three Kinds of Coverage
Most are surprised to hear that there are only three. With as much mail and jargon that you may have come across you may be thinking there are plenty more. Now, there are plenty of options within these three kinds of coverage, but there are only three ways to manage your Medicare insurance.
The Bare Necessities
Sometimes you just want to look for the bare necessities. Under the Medicare umbrella this is when you just have Original Medicare and a Prescription Drug Plan (Part D). This is achieved by enrolling into Medicare Part A and Part B of Original Medicare and adding a Prescription Drug Plan to avoid any penalties. You can go anywhere Medicare is accepted, which you will find most everyone takes. For monthly costs, you only are responsible for your Part B premium (not always the case, some exceptions apply) and the cost for a drug plan. For reference, the average Part B premium is $135 a month and a drug plan is on average $34.50 a month. It’s important to note that Original Medicare doesn’t cover all medical related services. This isn’t necessarily bad, but both of the other options are setup to lower Original Medicare copays and coinsurances, and can cover services not covered by Original Medicare. So, this setup is likely to have the highest costs for services. Medicare has penalties for not enrolling in Part B and Part D. This setup will ensure you don’t pay any penalties.
This setup is easy to understand if you get the first. This is when you take the “Bare Necessities” (Original Medicare and a Drug Plan) and add a Medicare Supplement plan (also known and Medigap). The name, “The Upgrade”, gives itself away. A Medicare Supplement is a plan that simply supplements your Original Medicare by picking up some or all of your Original Medicare copays and coinsurances. It’s an upgrade to the basics…and for a cost. This setup is often the most expensive option. On top of your Original Medicare and Drug plan costs, you will have to pay anywhere from $40 to $350 a month for a Medicare Supplement plan. These plans are often priced based on your age and county. So, as you get older these prices will increase. This is the reason only around 17-20% of a county will be on this option.
Now, these plans have enrollment restrictions depending on your health, but there are certain times where everyone can get accepted guaranteed. Don’t worry too much about this if you’re getting Medicare for the first time. If you are just getting Medicare coverage or within two months of leaving employer coverage, then you will have guaranteed acceptance into one of these plans. There are up to 11 kinds of Medicare Supplement plans available that offer various levels of coverage, and the more coverage a plan has, the higher the price range will be. Yet, there is a plan option to have all of your Original Medicare shares of costs paid for by the supplement. This is known as the F plan. With this plan it’s possible to pay only your monthly premiums and pay nothing for all Medicare covered services when you use them. Just show your cards without worrying about the costs.
The All-Inclusive Package
Many people like an all-inclusive package nowadays. They save on costs by bundling everything. Often the services you need are provided onsite or through an approved vendor. You can generally upgrade your package to provide more value. This is what a Medicare Advantage Plan (Part C) does. True to the metaphor, anywhere from 30-40% of any county will be enrolled into a Medicare Advantage plan.
A Medicare Advantage Plan is when a private insurance company manages your Original Medicare in exchange for lower shares of cost and increased coverage. By law these plans have to offer – at a minimum – at least what Original Medicare covers, have an extensive network of physicians, and provide a quality of care on par with Original Medicare. This setup does have its advantages. They will often have a $0 premium (though some may have a small premium, depending on where you live), and have lower shares of cost for most all of your original Medicare coverage. Many of the most common, such as primary care visits and diagnostic tests, can be no cost. This setup automatically includes a Maximum out-of-pocket limit for all medical services within a given year. This is great for those worried about catastrophic costs that could arise from what life deals you. Lastly, they will often cover a variety of services that original Medicare doesn’t cover. These can include glasses and eye exams, hearing aids, over-the-counter medications, gym benefits, and more. They vary by plan but many of these are standard, and if not they can be added on for a small monthly cost.
As we alluded to earlier, these plans do have a network. This means that your doctors have to accept the plan you choose. Just because they take Medicare doesn’t mean that they will accept any Medicare Advantage plan. Since these plans are an all inclusive package, your doctors will all have to be participating providers for the same plan. To play on our metaphor, they all have to be approved vendors who agree to provide care to the standard that the plan requires. This generally won’t be an issue, but it’s important to do your homework that they are all in network. Networks are developed within and across counties. So, your doctors will often have a few Medicare advantage plans that they all take. We want to make this clear so that you can choose a package that has the coverage and quality of care you want without interrupting your continuity of care. If your uncertain of what your doctors take, it’s recommended that you speak to an agent to confirm your options.
With this you will be more educated than most of your peers and even most healthcare professionals. We’re not being inflammatory. Most healthcare professionals do not understand or know what your options are with Medicare. They will often only be aware of what your options are with them, and even then they might not know how those options affect your costs and experience with others in the healthcare industry. This is why it’s important to know your options and have a way of navigating your healthcare. We recommend partnering with a Medicare broker to help teach you what your specific options are based on your needs and circumstances. Brokers are not allowed to charge you anything. They are paid fairly and evenly by the health plans no matter where they help you enroll. Take the time to learn and then find a broker who is willing to have a dialogue with you and explore what you are looking for. If you’re ready to speak to someone click below to get in contact with a licensed broker in your area.