Medicare Supplemental Insurance vs. Medicare Advantage Plans
There has been so much in the news lately regarding Medicare that it is difficult to determine exactly what Basic Medicare, Medicare Supplemental Insurance, Medicare Advantage Plans, and Medigap Open Enrollment is.
Medicare is a government health insurance program for people over 65 and those with specific disabilities. It has a monthly premium, the same as any insurance policy. One section is divided into Medicare A and Medicare B. Part A covers hospitalization, while Part B is designed for outpatient care and doctor visits. All workers have a Medicare Insurance deduction on their paychecks. On Social Security checks, there is also a monthly deduction for this insurance.
If only Part A and B are chosen not everything is covered. To cover this extra cost many people choose to enroll in a Medicare Advantage Insurance plan through a private insurer. This Medicare (Part C) Insurance not only covers Parts A and B but also can include extra benefits related to vision, dental, hearing and preventive service. Some plans also include deductibles and co-pays. Medicare Part D is designed only to help with drug costs. There is also Medicare Supplemental Insurance available.
A Medicare Advantage Plan combines hospital, medical, and includes or reduces drug costs and co-pays. Medicare pays a fixed amount to this plan and makes all payments directly to the medical provider.
To break this down:
• Medicare A pays for hospital care
• Medicare Part B pays for doctor care
• Medicare C (Advantage) combines A and B plus other advantages
• Medicare D pays for drugs
• Medicare Supplement Insurance covers costs not covered by A and B
and provides for additional hospital stays
Medicare has limitations regarding when a person is eligible for enrollment. This is called a ‘Medigap open enrollment period’. You must be 65, older, or disabled to enroll in this program. If, at the time of enrollment, you are still covered by your employers insurance you do not have to choose a Medicare Plan until the insurance expires. The majority of people receive a Part A and B Card three months prior to turning 65. There is an additional three-month period allowed to enroll in Medicare Advantage. You are allowed six months after enrolling in Parts A and B to enroll in Medicare Supplement Insurance.
Laws regarding Medicare change in the fall of each year. In most plans, after $2,970 (2013) is spent for drugs you reach what is called the ‘donut hole’. When this amount is reached, you will have to pay $4,750 out of pocket, for the drugs, prior to receiving catastrophic coverage, where drug costs drop. This will be phased out in 2020, at which time you will pay 25% of the drug costs until your deductible is reached.
It is important that everyone know the details of Medicare coverage. However, with laws constantly being changed in Washington, the rules regarding this insurance may change as well.