If you are approaching the age of 65, you should take advantage of the federal Medicare program and start the enrollment process as early as possible. The Medicare program is designed to help retired US citizens take care of their health care needs during their retirement years. The base program, which is sometimes referred to as Original Medicare, is made up of Medicare Part A, and Medicare Part B. These two parts cover most of an elderly person’s medical needs, including hospital and outpatient services. However, it’s important to understand that Original Medicare can’t cover everything. We’ll discuss these coverage gaps here in this article, and also help you find ways to offset these potential expenses.
Medicare Parts A and B have certain basic fees as costs associated with each. For those with a lengthy employment history, usually 10 years or more, you may only be responsible for the premiums associated with Medicare Part B. However, if your employment history is less than the required number of years (or 40 quarters total), then you may also be required to pay fees for Part A as well.
This helpful chart outlines basic Medicare Part A and Part B coverage for Medicare plans in Maryland:
|Medicare Part A (Hospital Coverage)
||Medicare Part B (Medical Insurance)
|Medicare Part C (Medicare Advantage)
||Medicare Part D (Drug Coverage)
Maryland is home to a substantial number of Medicare beneficiaries – 827,426 in total. Of those, 9% (a total of 74,468 people) are getting their Medicare benefits from a Medicare Advantage plan. An additional 164,198 recipients are supplementing their Original Medicare a Medigap policy. The remaining 73% are either leaving themselves financially vulnerable to the gaps in their Medicare benefits, or may be using some sort of additional form of supplemental coverage available in their area or through their employer.
Before you decide how to supplement your Medicare benefits, you have to be receiving them in the first place. If you are not enrolled yet, click here for Medicare enrollment instructions.
As you age, your health-related needs are going to rise. At the same time, your healthcare expenses will also rise – if not at the same rate, then probably faster. Medicare has been designed to be as comprehensive as possible, but it has its imperfections. These coverage flaws, commonly referred to as “gaps”, may leave you holding a very expensive medical bill if you have an unexpected health emergency. For example, here are some of the fees you could be expected to pay for from gaps in Original Medicare coverage:
|Medicare Part A Costs||Medicare Part B Costs|
However, purchasing a supplemental policy could protect you from falling victim to these expensive coverage gaps. The two most popular forms of Medicare supplementation are Medicare Advantage, or by purchasing a Medigap policy. You can read more about each type of supplement below.
Medigap is a separate type of private insurance specifically designed to cover the gaps in Original Medicare. Although sold by private companies, each of the 10 available Medigap plans are designed and regulated by Uncle Sam (the US government). Plans A, B, C, D, F, G, K, L, M, and N are currently available for purchase in all 50 states. Plans E, H, I, and J were weeded out back in 2010 due to reform legislation. The good thing about Medigap policies is that they are uniform – no matter where or what company you purchase your policy from, the benefits for plan G will me the same for you in Maryland as they would be for someone in Alaska. Prices and providers, however, will vary by zip code.
This chart outlines what each Medigap supplement covers:
[chart category=”supplement” name=”planTypes” state=”MD” zipcode=”21215″]
In some ways, Medicare Advantage (also sometimes called Medicare Part C) acts more like a replacement for Original Medicare than a true supplement plan. This is because signing up for a Medicare Advantage policy transfers responsibility for your Medicare over to a private company. On the upside, many Advantage plans offer additional benefits, especially prescription drug coverage, for only a slightly higher cost than Original Medicare.
However, it should be noted that some of these Medicare Advantage networks are highly selective in order to try and keep their costs under control. While there’s a small chance this could save you money on your policy, it comes with a large likelihood that you may end up having to switch doctors. For some, this might not matter so much. However, if you have a trusted relationship with your current physician, switching doctors might be more difficult.
For reference, an HMO is a “Health Maintenance Organization”. PPOs are “Preferred Provider Organizations”.
[chart category=”advantage” name=”topHMOPlans” zipcode=”21215″ state=”MD”]
[chart category=”advantage” name=”topPPOPlans” zipcode=”21215″ state=”MD”]
Knowing the difference between Medigap and Medicare Advantage is essential for making sure that you get the highest quality health care at the best available price. Below are some of the essential differences between these two forms of supplemental coverage:
|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.|
Supplementing your Medicare benefits is no easy task. Thankfully, there are options available for your budget, and Medicare experts you can consult in order to make sure you get the best deal. Below is a directory of contact information you can use to get in touch with people who can answer any lingering questions you may have.
[chart category=”general” name=”usefulContacts”]
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