Confused by all the Medicare Coverage Options?
Medicare Annual Open Enrollment began October 15 and ends December 7. Many of my family members are covered by Medicare, and like a lot of you, they are confused by all of the options Medicare offers. The mail they get from insurance companies overwhelms them. Adding to the confusion is the number of plans available — there are an average of 43 health plans and 24 Part D prescription plans to choose from this year according to the Kaiser Family Foundation.
If you have gone through annual open enrollment before, you may be tempted to do nothing, which will automatically renew your same plan for 2023, if it is available. But that isn’t always best because new plans enter the market, prices go up, doctors and other providers may leave your plan’s network, and new benefits could be added. It really is best to compare plans each year. You might get better coverage for less.
To help reduce the confusion, let’s take a look at what the basic Medicare options are.
Download our Medicare Basics Flyer
Medicare Part A: Hospital Insurance
Once you turn 65, Medicare Part A is premium-free if you or your spouse worked for at least 10 years and paid Medicare taxes. Medicare is also available for people who get Social Security or Railroad Retirement Board disability insurance, and those with End-Stage Renal Disease (kidney failure) and amyotrophic lateral sclerosis (ALS), also called Lou Gehrig’s disease.
Medicare Part A covers:
- Inpatient care in a hospital
- Care in a skilled nursing facility
- Hospice care
- Some home health care.
Medicare Part A Costs
Medicare Part A is free for most people, meaning you don’t have to pay a monthly premium to be covered. But it does not cover all of the costs of your care. You have to pay a deductible when you go into the hospital. In 2023, the deductible is $1,600 per benefit period. You could have to pay this benefit period deductible more than once a year depending on how many times you have to stay in the hospital.
You could also pay co-insurance if your hospital stay is 61 days or longer, if you don’t get a Medigap plan (explained below). There are costs for skilled nursing and home health care you will have to pay based on how long you receive services.
Medicare Part B: Medical Insurance
Medicare Part B helps pay for medically necessary:
- Doctor and other provider visits
- Outpatient care
- Home health services
- Durable medical equipment
- Mental health services
- Many preventive services, like health screenings or shots, and yearly wellness visits.
Medicare Part B Costs
You must pay a monthly premium for Medicare Part B, which is $164.90 in 2023. The premium could be higher depending on your income. After you meet your $226 deductible, you will pay coinsurance, which is 20% of the Medicare-approved amount for the services you receive. For example, if the Medicare-approved amount for a service is $100, Medicare would pay $80, and you would pay $20.
Medigap Insurance (Optional)
You have to pay for Medicare Part A and Part B copayments and coinsurance for the care and supplies you need out of your own pocket. To protect yourself from these gaps in coverage, you may want to buy a Medigap policy, which is offered through private insurance companies, not Medicare.
There are many Medigap policies to choose from. They are lettered: A, B, C, D, F, G, K, L, M, and N. Not all plans are available depending on when you enrolled in Medicare. If you live in Massachusetts, Minnesota, or Wisconsin, your plans are a bit different.
To try to make it easier for you, all plans in each letter group must offer the same basic benefits — Medicare standardized them. For example, if you live in Tennessee, all companies offering Plan A must cover all the same basic benefits. But one insurer may charge more for the same coverage as another insurer. Or an insurer could add a few additional benefits not offered by another insurer. You need to compare these plans as well.
Two things to note:
- Medigap plans do not cover prescription drugs.
- You do not have to buy a Medigap plan. You can choose to pay the costs that Medicare Parts A and B do not cover out of your own pocket.
If your head is swimming, you are not alone. And you aren’t even thinking about the most important thing — which Medigap option is best for you based on your budget and healthcare needs. That’s where the real work comes in. If you travel outside of the US, you will want to think about a plan that covers your healthcare while you’re away — Medicare Parts A and B do not.
Medigap policies vary in price. The price goes up the deeper into the alphabet you go. Plans A and B will cost you less than plans G or L.
Medicare Part D: Prescription Drug Plan
Original Medicare — that’s Part A and Part B — doesn’t cover your medicines. If you want help paying prescription drug costs, you will need to get Medicare Part D. You may not need this if your retirement or union plan covers your benefits. Call your retirement plan to find out if you are covered.
Your cost depends on the plan you choose. Most plans have premiums, deductibles, copayments, and coinsurance. Plans change each year, so it is important to check your options.
Medicare Part C: Medicare Advantage
Medicare offers an option that combines your hospital and medical insurance, as well as Part D prescription drug coverage under one plan, called Medicare Advantage. The same services are covered under Medicare Advantage and Original Medicare Part A and Part B. Depending on the Medicare Advantage plan you choose, you could get additional benefits like vision or dental care.
Medicare Advantage plans set limits on how much you will have to pay out-of-pocket each year, like deductibles and coinsurance. This protects you from costs you weren’t expecting. Most plans even cover prescription drugs, so you won’t need to buy a Medicare Part D plan..
Types of Medicare Advantage Plans
There are many Medicare Advantage plans to choose from. Lower cost plans usually require you to get all of your services from in-network healthcare providers. The types of plans include:
- Health Maintenance Organizations (HMO)
- Preferred Provider Organizations (PPO)
- Private Fee-for-Service (PFFS) plans
- Special Needs Plans (SNP)
- These plans are for people with specific diseases, certain health care needs, or limited incomes.
- Medicare Medical Savings Account Plans
- Programs of All-inclusive Care for the Elderly (PACE):
- This Medicare and Medicaid program allows people who would need a nursing home-level of care to remain in the community. It is available in most states.
Medicare Advantage Plan Costs
You pay a monthly Part B premium and may also have to pay the plan’s premium, if they charge one. Some plans have a $0 premium and may help pay all or part of your Part B premium. Most plans include Medicare drug coverage (Part D).
I am Confused. How Can I Get the Right Medicare Coverage for My Needs?
You are not alone. If you want help, you can work with an independent agent who will compare benefits and costs across companies at no cost to you. Make sure you work with an independent agent. Captive agents sell policies from just one insurance company, so you are not getting access to all plans and options available to you.
The independent agent will ask you questions about your income to see if you qualify for discounts or to find a plan that fits your budget. He or she will also ask you about your health and where you receive care to make sure, if possible, that the providers you currently visit are in the network of the plan you choose. If you travel, it is important to have coverage while you are gone. Your agent can make sure that you are covered.
You don’t have to make this critical Medicare enrollment decision on your own. American Exchange has licensed, independent agents who will listen to your needs and help you pick the best option for you at no cost. And we will be a phone call away year-round to answer your questions.
During the Medicare annual enrollment period, our agents are available to speak with you:
Monday through Friday from 8:00 a.m. to 8:00 p.m. Eastern Time
Saturday 8:00 a.m.to 5:00 p.m. Eastern Time
Sunday 12:00 p.m. to 5:00 pm. Eastern Time
Our office will be closed November 24-25, 2022 for Thanksgiving.
Medicare Disclaimer: We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
American Exchange is a licensed health insurance broker. Robert Huffaker, NPN 13568432