So, you’re on Medicare now? There’s a lot to learn about it and certainly a lot of industry lingo surrounding enrollment can be difficult to decode. It can be a lot to figure out on your own, and you may find the help of an Insurance Broker to be invaluable when deciding how to enroll.
Here’s a bit of information to get you started though!
Original Medicare- also known as Traditional Medicare.
This is the program that has the Red, White and Blue card and is funded through US Treasury Trust Funds. There are 4 parts to coverage with Medicare- Part A provides hospital coverage, Part B provides outpatient coverage, Part D provides prescription drug coverage and Part C which provides an alternate way for you to get benefits through private health plans- we’ll talk more about that later.
Original Medicare is a pretty straight-forward plan, there are no copays, you don’t need any referrals, you don’t have to designate a provider, but it has a deductible that has to be met each year before benefits are paid out. Medicare has an 80%/20% coinsurance sharing structure- meaning they pay 80% and you pay 20% of covered services. Many people add a Supplemental plan to help cover the cost of the deductible and/or 20% patient responsibility- we’ll talk more about those later. Part B(Outpatient) & D(Prescription) monthly premiums are based on your income tax filing and can be found on medicare.gov, most people do not pay a premium for Part A (Hospital). Additionally, there are lots of resources to get help in paying premiums, you can check those out on medicare.gov
Private Insurance Carriers- like Aetna, BCBS, Cigna, or United Healthcare, all have products that you can use as a Secondary Insurance to Original Medicare to help pay for your annual deductible and/or your coinsurance. The cost of these plans depends greatly on the amount of benefits you choose. There is no shortage of Medicare Supplemental Insurance carriers to choose from, in fact, you may already have Life Insurance coverage through one of them- carriers like Mutual of Omaha or Manhattan Life- It may be worth finding out if there is a discount for having multiple policies with a company like this to save you money.
The cost of Supplement Plans is no where near as cut-and-dry as looking it up on medicare.gov, The premiums will be based on how the carrier chooses to price their plans (examples: based on age, based on community) and the type of coverage you think is right for you. healthmarkets.com has a couple really handy charts to help visualize which plans cover what services. For example- you could get a Supplement Plan that covers your 20% coinsurance but does NOT cover your annual deductible- thus saving you some amount in premiums per month than a Plan that would cover both. If you are shopping for a Supplement to your Original Medicare, I would definitely recommend speaking with an experienced broker to help you compare the plans available.
Part C - also know as Medicare Replacement Plans
Also called Medicare Advantage, Medicare Complete, or Medicare Replacement. If you have Part C, that means that you have opted to replace your Original Medicare with a private carrier such as BCBS, Humana, Cigna etc… This is where a lot of people get confused. Many people enroll in one of these plans thinking that it is the Supplement plan to their Original Medicare, when in fact, it REPLACES their Original Medicare.
There are plenty of differences to be aware of, and maybe I’m a little biased, but one of the biggest differences to be aware of, is knowing who the doctor should send your claims to! With a replacement plan, the claims go to the private insurance carrier NOT Medicare. There are other differences that can have a big impact on your pocketbook (good or bad!) that you should take a look at. Premiums for replacement plans can be as low as $0/month, but also could have higher deductibles, or copays for pcp/specialist visits, they usually do require referrals and some even require you to choose a provider to go to. Comparing the Overall Cost of Original Medicare + Supplement with the Overall Cost of a Medicare Advantage plan is really important to think about, as one is not necessarily better than the other- it really comes down to your health conditions, needs, wants, and financial situation.
Part D - Prescription Coverage
Last, but certainly not least- Prescription Coverage!! Without getting too up-in-arms about the whole thing, Prescription Medications can be outrageously expensive. Now, if you choose to enroll in a Medicare Advantage plan- that likely would include Prescription Coverage- so make sure it’s a plan you can live with, ask for their formulary- to make sure any drugs you take are covered! If you choose to enroll in Original Medicare, you can utilize the Medicare Plan Finder search tool on medicare.gov to drill down and find the right Prescription Coverage for you.
These plans have varying monthly premiums depending on coverages chosen. Some have deductibles, copays, or coinsurance, some do not. When deciding how to enroll for Medicare-whether Original Medicare or Medicare Advantage- don’t forget to factor in Prescription coverage costs to the whole picture.
One last word of caution in choosing any plan- if you travel, make sure that whatever you choose will cover you across state lines, or even international borders.
It’s a lot to take in and learn, and that’s why I recommend finding a knowledgeable Insurance Broker who knows about Medicare Products specifically to help navigate it, there are also great resources online like www.caring.com/medicare/ where you can find helpful information. I can see why Medicare Replacement plans have gotten so popular, there are a lot of pieces to the puzzle with Original Medicare- and enrolling in a Replacement Plan does seem simpler, but don’t be intimidated - do your research, talk to a professional, and do what is best for your good health!