How Does Medicare Work?
Medicare is a Federal Government healthcare program designed primarily for seniors 65 and over, although other Americans (disabled persons for example) can qualify under certain rules. Mostly people qualify through payroll deductions over a period of time. Medicare is not “free” and is not comprehensive care as there are costs borne by the beneficiary that, if left uncovered that can be a financial burden. There are four parts to Medicare labelled A, B, C and D.
What is “Original Medicare”?
Original Medicare, also known as “Fee For Service” Medicare consists of two parts – Part A and Part B. In Original Medicare the Federal Government is the primary insurer managed through CMS (the Center for Medicare and Medicaid Services) a division of HHS (Health and Human Services. Learn more about Parts A and B.
about Part A
- Hospital Room and Board
- Skilled Nursing Facility
- Hospice Care
Important Points
- Most beneficiaries qualify at zero premium
- Those who do not may buy in
- There is a deductible
- Copays may apply
- There are limits to services
about Part B
- Dr. & Specialist Care
- Preventive Care
- Diagnostics
- Surgical Services
- Outpatient Care
Important Points
- Most beneficiaries qualify
- Penalties for late enrollment
- Premium based on income and assets
- There is a deductible
- 20% Cost Sharing applies with no annual cap
What Are Ways to Offset Risks In Original Medicare?
There are two ways to accomplish this. The first is to get Medicare Supplement insurance (aka Medigap). Medigap is secondary coverage provided by a private insurer where your primary coverage is Original Medicare. The second way is to get Part C or Medicare Advantage (aka MA or MAPD).
With Medicare Advantage you allow a private insurer that operates under Medicare rules to manage your Medicare coverage. See the images below for more and refer to our blog for our “Good, Bad and Ugly” series on each option.
Medigap
Important Points
- Plans have a monthly premium that increases with age
- Premiums are higher for tobacco users
- Acceptance is not guaranteed after initial period
- Access to care is not limited by a network
- There is a deductible
- Part A & B coverage only
- “Gap” coverage for valid Medicare claims can’t be denied
- Must get separate Part D for Rx coverage
- Enrollment is open year round
Medicare Advantage
Important Points
- Most popular plans include a zero premium
- Plans may require use of network providers
- Rx coverage (Part D) may be included
- There may be a zero deductible for medical and Rx coverage
- Copays apply
- Dental, vision, hearing, gym access may be included
- Plan changes are subject to certain periods or conditions.
- Some plans will pay a portion of Part B premiums
How Do Part D Prescription Plans Work in Medicare and Do I Need One?
For some Part D coverage is essential. For others, there are alternatives. Specifically those beneficiaries creditably covered under an employer plan, Federal Employee benefits, VA benefits among others would want to compare. As with Part B permanent late enrollment penalties apply for those with no other valid option.
Prescription coverage is structurally standardized but benefits and premiums vary. Generally medications are priced “Tiers” and a medication search is the first step to comparing overall costs. Those who opt in for Part C (Medicare Advantage) will likely choose a plan with Part D coverage included.
How Can I Apply For a Medicare Supplement, Medicare Advantage & Part D Drug Plans?
We encourage a consultation with a knowledgeable and especially independent agent who would have access to a wide range of insurers and plans. With Medicare Advantage and Part D there are additional credentials required of agents, as well as specific enrollment and marketing rules.
You can compare plans side by side, all without cost or obligation and in privacy. Plans will allow direct enrollment online and over the phone. We do not discourage self application. However we would strongly advise a pre-enrollment consultation that is at no cost to you and does not affect your rate or eligibility.
These services include provider lookup (as some MAPD plans are network centered) and comparison of medication costs (where there is extensive and/or specialized need).