While my elder care law firm focuses on Florida Medicaid planning and estate planning (along with some probate and guardianship), mygoal is to be a resource for the elder community and their caregivers. This article will focus on the basics of Medicare.
Different Types of Medicare
Medicare can be separated into three different categories:Original Medicare, Medicare Advantage Plans and Medicare Prescription Plans.These three types of Medicare are further described below.
Medicare Part A and B (Original Medicare)
“Original Medicare” consists only of Medicare Part A and Medicare Part B.
Medicare Part A covers rehabilitation, hospitalizations, and hospice. Medicaid Part A is free if you or your spouse paid at least 40 quarters into the system via payroll taxes while working, or have been receiving social security disability insurance (SSDI) benefits for at least two years. If you do not meet the above qualifications, you can still get Medicare Part A by paying a premium.
Medicare Part B covers doctor visits, medical exams, medical treatment, durable medical equipment and some home therapies. You pay a premium for Medicare Part B depending on your income level. Medicare Part B premiums are automatically deducted from your social security income.
The benefit to Original Medicare is that no referrals are required to see a specialist, almost every doctor accepts Original Medicare and there are no coverage networks to worry about (in-network vs. out-of-network is not a concern). However, Original Medicare has co-pays, deductibles (and sometimes premiums) that can be very expensive.
Medicare Supplements | Medigap for Original Medicare
Because of the high co-pays and deductibles, those who participate in Original Medicare will usually only do so if they can also afford a Medicare Supplement (otherwise known as a Medigap Policy). When comparing Medicare Supplements, Medigap Plan F is usually the most comprehensive as it pays for all Part B co-pays, blood work, hospice copay, skilled nursing co-insurance (up to 100 days), any Medicare Part A or Part B deductibles, and 80% of medical bills while travelling abroad.
There are 10 different types of Medicare Supplement or Medigap Plans: A, B, C, D, F, G, K, L, M, and N. While multiple carriers may offer these Medigap Plans, all plans of the same letter must offer the same benefits (however premiums will differ).
Medicare Part C (Medicare Advantage)
Medicare Part C is also known as a Medicare Advantage Plan and these are HMO (i.e. managed care plans) where you have to remain in a specific network and get needed referrals and authorizations for specialists.
The “advantage” to Medicare Advantage / Part C Plans is that they are typically less expensive, usually with a low deductible and a small copay, compared to Original Medicare with a Medicare Supplement. In addition they often include other benefits like eye-care, prescription coverage, and even some perks such as gym membership discounts. All of this is provided for a single premium (benefits widely vary depending on the Medicare Part C /Advantage Plan).
Medicare Part D (Medicare Prescription Plans)
Some Medicare Part D plans are included in Medicare Advantage or Medigap Plans. But Medicare Part D plans are solely to cover the cost of prescription drugs.
There are so many Part D Plans to choose from that it can be overwhelming to decide whether you want Part D. This is because Plan XYZ might cost $125.00/mo, when Plan ABC costs $250.00. But Plan XYZ (the cheaper plan)might pay more for your specific prescription. You also have to be careful that you don’t pick a plan with a history of raising co-pays for your prescription.
It is for this reason that I always suggest that my clients seek the advice of a Medicare Supplement Adviser or Medicare Supplement Policy Broker. They don’t charge a penny(they are paid by the health plan you enroll with). If any of you reading this would like a referral to a Medigap Broker that I know and trust, please feel free to reach out even if you don’t need my legal services. Just provide me with your name, city and email address and I can get you to the right person to help make the best Medicare Supplement, Medicare Advantage or Part D selection.
Which is better,Original Medicare with Medigap or Medicare Advantage?
If you can afford it, Original Medicare with Medigap or a Medicare Supplement is typically the best bet for several reasons.
First, it gives you the most options for your medical care.You can usually get to the best specialists in the country without worrying about whether they are in-network or whether your Advantage HMO is going to approve a needed scan or surgery.
Second, choosing a Medicare Supplement during initial open enrollment locks in a premium rate that won’t be available to you if you initially choose a Medicare Advantage Plan and subsequently decide to switchback to Original Medicare.
What happens is people choose the Part C / Advantage Plan at first because it’s cheaper. It’s cheaper because you just turned 65 and are probably very healthy compared to someone in their 80s or later. But many people become frustrated with their Medicare Advantage plan’s limitations as they age and care needs increase. When they try to switch from Medicare Part C back to Original Medicare they find that the supplement / Medigap plans are able to look into preexisting conditions and their premiums are much higher than expected.
So, when you turn 65 always get Original Medicare with a supplement if you can. Because if not, you’ll be subject to medical underwriting should you choose to try Medigap down the line. If your health is really bad, you may not be able to afford a good Medigap policy or Medicare Supplement plan
When Can I Enroll in a Medicare Supplement | Medigap Plan?
For most people, they can enroll in a Medicare Supplement Plan within six months of starting Medicare (technically, open enrollment is within six months of turning 65 and enrolling in Medicare Part B). If you do so within this initial “open enrollment period,” prior health problems cannot be considered (or cannot impact your premium price anyway, even if your health gets worse). Read more at “When can I buy Medigap.”
Additional Medicare Resources