If you are already a Medicare recipient, you have waded through the morass of the mysterious & confusing components of Medicare. If you are getting ready to apply, you are probably overwhelmed just thinking about it, and all of the mail you are receiving from Medicare, AARP and endless providers is NOT helping!
The starting point for Medicare is their website, Medicare.gov; for best results, you will need to create an account, and enter your zip code so that they can give you information regarding Medicare plans available in your area. But let’s start with a simple breakdown of the components of a Medicare Plan.
- Medicare Part A:
Part A provides Hospital coverage, and goes hand-in-hand with Part B. There are no premiums for Part A, though there are deductibles; these can be covered by your Medicare Supplement Plan (see below).
- Original Medicare, Medicare Part B:
Medicare Part B provides about 80% of your costs for physicians, labs, etc., in conjunction with Part A. The standard premium is $135.50 per month, but can be significantly higher, based upon your income. You are responsible for the remaining 20% of costs, along with an annual deductible, which may be covered by your Medicare Supplement Plan.
- Medicare Part D:
This is your Prescription Drug Plan, which you must also enroll in if you want coverage for prescription drugs- they are NOT covered by Medicare Parts A&B. You will have a monthly premium for these plans, along with a deductible. It is recommended that you get a print out from your pharmacist of your prescription drugs, because you will need to list them, along with dosages when shopping for your Prescription Drug Plan. In some cases, your pharmacy can make recommendations for a Part D prescription drug plan for your needs.
- Medicare Supplement or Medigap Plan:
This is yet another plan with premiums to help pay your out-of-pocket costs, including your deductibles and co-pays from Medicare Parts A & B. You not only need to purchase a Medicare Supplement, but you have to decide what type of supplement you want, which are designated using letters A through N. It is generally recommended that you obtain a Plan C or higher, due to coverage of the co-insurance for skilled nursing facilities or rehab. NOTE: this is NOT coverage for nursing home care. It is referring to temporary stays of 90 to 100 days for medical needs.
Original Medicare Summary: To summarize, there are four different parts to Original Medicare: Part A, Part B, Part D (Drug) and your Supplement, and while only A&B are required, all four are strongly recommended.
But wait…what about Medicare C or Medicare Advantage?
What is Medicare Advantage?
Great question! Medicare Advantage is an all-in-one or bundled plan that is an alternative to Original Medicare, and includes not only A, B, and D, but often includes vision, dental, hearing and more! Depending upon your location, there are Medicare Advantage plans with and without prescription drug coverage. They may also have $0 additional premiums, but you will still pay the standard Part B premium of $135.50 per month, and you may or may not have a deductible to meet. Most will have limits on how much out-of-pocket expense you would incur in a year.
So, what IS the “Advantage”? Medicare Advantage functions similar to an HMO insurance plan, and can be significantly less expensive than Original Medicare, along with offering additional benefits. It is recommended for individuals who are relatively healthy.
How Do I Decide What I Need?
It is a great idea to locate an individual who has some expertise in Medicare, and can help walk you through the decision-making process. There is a ton of information available on Medicare.gov, and MedicareAdvantage.com, but you may want a live person to talk to. There are contact numbers on these sites with live people to discuss options with you.
It is also important to remember that whether you choose a Medicare Advantage Plan or Original Medicare (with the four components) during Open Enrollment, you may switch from one to the other every year. Open Enrollment has just started, running from October 15 through December 7th. Once you make your selections, you will start your new coverage in January of the following year.