Any retirement-age individual 65 years or older has the option to enroll in the Medicare program sponsored by the federal government. It is possible to put off enrollment until sometime after age 65, but doing so might lead to fees and financial penalties later on down the road. Enrolling in Medicare at the appropriate time ensures that you will receive Medicare Parts A and B at the lowest possible cost. Parts A & B, also known as Original Medicare (or Traditional Medicare), help to cover many of your basic health expenses during your golden years. See the table below for specifics on what benefits Part A and B offer.
The Medicare program is designed to be as low-cost as possible so that you can receive quality care once you retire and begin living on a fixed income. The specific prices for Part B can be found here, which include a monthly premium and an annual deductible. Part A is usually free, assuming you have a significant work history (at least 10 years or 40 quarters will be enough). Anything less than that, however, and you will likely have to pay a premium before you will start receiving Part A Medicare benefits.
|Medicare Part A (Hospital Coverage)
||Medicare Part B (Medical Insurance)
|Medicare Part C (Medicare Advantage)
||Medicare Part D (Drug Coverage)
In Kentucky, there are 793,271 Medicare beneficiaries right now. Of that grand total, nearly a full one-fourth (24%) are enrolled in a Medicare Advantage program of their choosing. A comparable 21%, or 166,587 people, are supplementing their Original Medicare via Medigap supplement insurance. The remaining 436,299 beneficiaries, or 55%, have neither Medigap nor a Medicare Advantage policy. Either they have an employer-sponsored alternative, or they are satisfied with Original Medicare by itself.
Of course, you can’t start shopping around for a Medicare supplement policy before you enroll in Medicare Parts A & B. Feel free to click that link if you are unsure of your Medicare enrollment status.
Just for clarification, supplement insurance is completely optional. There are no state or federal laws which say you have to supplement Original Medicare with additional coverage. However, it may be in your best interests to at least strongly consider doing so. Original Medicare isn’t perfect – there are gaps in its coverage and benefits which, if left unchecked, could leave you with hundreds or even thousands of dollars in the following expenses:
|Medicare Part A Costs||Medicare Part B Costs|
For most people, supplementing their Medicare with either a Medicare Advantage or a Medigap policy is the easiest and most affordable option. Below, we’ll discuss each policy in detail and show you why these plans are so popular.
The federal government has reviewed and approved 10 different supplement policies for covering the gaps in Traditional Medicare. Each plan is assigned its own letter: A, B, C, D, F, G, K, L, M, and N. Because Medicare is the same in all 50 states, so are the Medigap supplement plans. Plan N in Kentucky will give you the exact same benefits as it would if you lived in Hawaii. The price may be different in your area, and the provider might change also. But those are the only real differences from state to state.
[chart category=”supplement” name=”planTypes” state=”KY” zipcode=”40214″]
According to statistics, Medicare Advantage (MA for short) is slightly more popular in Kentucky than Medigap insurance. That may have to do with simplicity, since MA requires that you only deal with one single entity (a private health insurance company). MA plans essentially transfer control and responsibility of your Medicare benefits from the government to a private company. Sometimes, this may yield additional benefits, like prescription drugs, at a slightly higher cost. You will never receive fewer benefits from MA, though, because that is against the law.
One quick word of advice: before you sign the dotted line on a MA policy, look carefully into the HMO or PPO network your plan relies on. Sometimes, the reason MA is the cheaper option is because they restrict their network of providers to a limited number of physicians. If keeping your current doctor is important to you, then make sure that doctor is a member of your MA plan’s network before switching.
FYI: HMO stands for “Health Maintenance Organization” and PPO is short for “Preferred Provider Organization”. Below are some of the HMOs and PPOs available near you:
[chart category=”advantage” name=”topHMOPlans” zipcode=”40214″ state=”KY”]
[chart category=”advantage” name=”topHMOPlans” zipcode=”40214″ state=”KY”]
There are some pretty important differences between Medigap and Medicare Advantage that every consumer should be aware of before they buy. Consult the following table for examples:
|Questions||Medicare Advantage||Medicare Supplement|
|How are the plans funded?||Medicare will pay your insurance company a fixed amount based on average healthcare costs for your region. You may also be required to pay a premium based on your location and insurance company.||Your monthly premium takes care of the majority of your expenses.|
|Do I continue paying for Part B?||Yes||Yes|
|What does it cost me?||Some plans offer a zero-dollar premium (because the government subsidy covers the full cost). Other plans may cost up to 0-0 monthly.||While each plan does require a monthly premium, many of them are affordably priced.|
|What does the plan cover?||Depending on your plan, it will cover at least the same benefits offered by Medicare parts A & B. Possibly other benefits; but the more benefits you sign up for, the higher your out-of-pocket expenses may be.||All eligible expenses are split between Medicare, and your Medicare Supplement plan. If you have a comprehensive plan, such as Plan F, 100% of eligible expenses not covered by Medicare will be covered by your supplement insurance.|
|Can I budget my health care expenses?||It’s challenging; the more often you require medical care, the more often you may be required to pay out-of-pocket.||Budgeting is much easier with a Medicare supplement. You have fewer out-of-pocket expenses, and one simple monthly premium.|
|Can my plan be cancelled?||Yes. Unfortunately, your health insurance company has the legal right to review their Medicare Advantage services annually and decide whether or not they wish to continue providing coverage.||No – not unless you fail to pay your monthly premium, or your insurance company goes bankrupt. Only under such extenuating circumstances could your plan be cancelled.|
|Are pre-approvals or pre-certifications required?||Unfortunately, yes. These Plans usually require pre-certification or other qualification for some specific types of care.||No pre-approvals are required. If you qualify for Medicare, you will qualify for a Medicare supplement plan.|
|Can I use any doctor or hospital?||Usually, you choose from a network of pre-approved providers. These networks can fluctuate over time.||Yes. You are free to choose any doctor and/or hospital in the U.S. which accepts Medicare.|
|Can drug, vision, or dental coverage be included in the policy?||Yes.||No. These forms of coverage must be purchased separately.|
|Who is this plan type generally best suited for?||If you are relatively young, healthy, live in an urban area, and have a limited income, a Medicare Advantage plan could work for you.||If you live in a rural area without easy access to provider networks, if you like to budget your finances, or if you want comprehensive coverage, you might prefer a Medicare supplement plan.|
Managing your health care needs can be a daunting task. This article can only teach you so much. If you still have questions – and it’s likely that you do – you can contact the experts below for more information (or consult the Medicare insurance experts in your state). The more you learn, the better your eventual decision will be.
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