Medicare Explained A definitive Three Step Approach while helping you choose the best plan.Step 1: Understanding Medicare Medicare has four parts. All of which you may not need. Understanding these four parts, what they cover, and what they cost is important for you to make an informed decision about your Medicare. These are the four parts and what they cover and cost:
- Part A- Hospital coverage with some hospice care. Part A does not cost you anything. It basically covers your room and board in the hospital for up to 60 days with no copayment. If you did have to stay longer than 60 days you are responsible for some copayments. It has a $1288 deductible.
- Part B- Physician’s coverage and outpatient procedures. Part B will cost you $121.80 per month for 2016. This could be greater if you are in a high tax bracket. There are some cases where this can paid for you if you meet the income guidelines. They will take this out of your Social Security, or they will bill you if you are not receiving Social Security. Part B has a $166 annual deductible and covers 80% after the deductible. There is a penalty if you don’t take your Part B when you are Medicare eligible. The only exception to this is if you have some type of group coverage from you or a spouse’s work or retirement that is equivalent or better than Medicare.
- Part C- A combined plan that takes Part A, Part B, and in most cases Part D. It combines them and offers better coverage that A & B Medicare alone. They are offered through private companies and are usually network plans. Some people elect not to take this in lieu of a Medicare Supplement. There is more explanation of this on the latter in this document.
- Part D- Prescription coverage- There are two ways you can get Part D, either through a stand alone plan or a Part C advantage plan. These plans tier your prescriptions. The higher the tier the more your co payment. There is also the issue of the coverage gap or donut hole that can be a factor for those who take expensive prescriptions. I would be glad to explain that to you further. It is very important you evaluate your prescription needs before choosing a plan. I can help you with this. There is a penalty if you don’t take some type of Part D coverage when you come onto Medicare, unless you have some type of work or retirement benefits. VA benefits will also suffice.
- Options 1: Medicare Supplements (aka: Medigap Policies) pay second, after Medicare pays. They pay “all of the remaining balance”. The Plan F is the most popular. You will pay no Deductibles or Co-Pays when you go to the doctor or hospital. You could be in the hospital for 6 months and walk out with nothing owed. The second important thing to remember is that supplements allow you go to any doctor or hospital in the country. Regardless of your Supplement Company Name . . . Doctors and Hospitals accept these plans – they like them. On average they cost around $70-$150/mo. You will need to add a Medicare Part D prescription plan. They typically costs between $15-$60 monthly; Your co-pays for 30 day prescriptions will be approximately $4-$10 for Generics (Tier 1), $24-$40 for Preferred Name Brands/Generics (Tier 2), $45-$85 for Non-Preferred Name Brands/Generics (Tier 3) Drugs.
- Option 2: Medicare Advantage plans are replacement plans that include Hospital, Doctor, and Part D Prescription benefits all built into one plan. You would no longer use your Medicare card. Instead you would be showing the Medicare Advantage company’s card. The federal government pays a large subsidy to the insurance company and they pay your bills. You will have co-pays for every procedure, office visit, hospital stay, etc. They do pay more than Original Medicare and give some protections that Medicare doesn’t. They have lower monthly premiums than Supplements. They typically operate as PPO or an HMO and you will be encouraged to use “their network doctors and facilities” and will pay higher co-pays if you don’t; there are some doctors and hospitals that don’t look too favorably upon these plans but will accept them. You will have some that just won’t accept them at all. As long as you are in good health these plans are good, but the minute you start having health issues – these plans can have issues. They are in the neighborhood of $0-$69/monthly. This coverage is very similar to a Blue Cross/Blue shield plan that has co-pays and deductibles.