If you are soon approaching the age of 65, you will be eligible to enroll yourself into parts A and B of the Federal Medicare Program. This program, offered by the federal government, provides Massachusetts citizens various forms of health care coverage. Part A of Traditional Medicare primarily covers hospital visits and associated treatment. Part B, on the other hand, will help cover costs from your primary care physician, outpatient procedures, and similar treatments. Unfortunately, however, there are some health care services, both in and out of the hospital, which are not covered at all by Traditional Medicare. We will discuss these coverage gaps on this page.
Coverage and Benefits
Medicare Parts A and B aren’t free, but they are offered at a much lower cost than traditional health insurance policies for those 65 and older. The initial costs and fees come in the form of a monthly premium for Part B (which you can learn more about here). For most seniors, Part A is free if you have a significant work history. And a “significant” work history is defined as ten years (40 quarters) of employment or more.
After applying for and being approved for Medicare, the first thing you get are Part A hospital benefits. This means that the vast majority of your expenses while receiving medical care in a hospital (or hospice care) will be taken care of. However, there are exceptions. Part B benefits help pay for outpatient facilities, regular check-ups, medical supplies, and preventive care. But you do not have to accept Part B benefits under certain circumstances.
Going down the list alphabetically, next is Medicare Part C. Medicare Part C is actually a private insurance plan which is not provided by the government (but the government will help pay for it). Its benefits start out identical to Medicare Parts A & B, and you have the option to purchase more coverage if you would like. Medicare Part D is a government-provided prescription drug coverage insurance plan. It can help reduce the costs if you accept Medicare Parts A & B and need help paying for your medications. Purchasing Part D, however, requires you to purchase Medicare Part B and pay for your premiums.
|Medicare Part A (Hospital Coverage)
||Medicare Part B (Medical Insurance)
|Medicare Part C (Medicare Advantage)
||Medicare Part D (Drug Coverage)
Common Medicare Plans in Massachusetts
There are more than one million seniors (1,104,483) with a Traditional Medicare policy living in the state of Massachusetts. Of those, one-fifth of the population (220,897) has their benefits covered by a Medicare Advantage policy instead of Traditional Medicare. An additional 210,571 citizens (19% of all Massachusetts seniors) have a Medigap supplement insurance policy covering the gaps in their Traditional Medicare benefits. The remaining 61% of seniors either rely on some sort of employer sponsored benefits, or are hoping that Parts A and B of Medicare will cover all of their medical needs.
Whether you supplement your Medicare through a Medigap policy, an Advantage Program, or through some other means, you have to be enrolled in Medicare first. Click that link for more information on the process, as well as important enrollment dates.
Why Isn’t Traditional Medicare Enough? Why Purchase Additional Coverage?
Well, the answer to this question is dependent upon your specific circumstances. If you are still closer to 65, in relatively good health, and don’t require frequent medical treatment for any chronic conditions, you might not be vulnerable to the gaps in Traditional Medicare coverage. However, the older you get, and the more demanding your medical care becomes, the more likely you will be to incur any of the following out-of-pocket expenses:
|Medicare Part A Costs||Medicare Part B Costs|
Medicare is good for helping Massachusetts residents pay for their medical care after retirement. These days, it’s especially important in the face of rising healthcare costs. But the unfortunate truth is that eventually, rising medical costs will outpace Medicare’s affordability. If you want to avoid these expenses and protect your savings for as long as you can, you’re going to need to purchase some type of Medicare supplement coverage.
Seniors 65 and older can easily qualify for Medicare supplements in most cases. Some supplements only require that you pay a relatively affordable monthly premium in order to financially protect yourself. Most of these supplements are small, simple, and specifically designed to give you the most beneficial coverage for a reasonable price. Other plans are more complex and offer additional coverages – but sometimes at a higher price.
Why an insurance supplement? Because in addition to rising medical costs, seniors have to worry about the gaps in Medicare coverage. Believe it or not, there are still some out-of-pocket costs associated with Medicare. Extended hospital stays are a good example and can range up into the tens of thousands of dollars if you stay for longer than 2 weeks. But that’s just the tip of the iceberg. If you’re unsure that your savings can handle such a financial burden, then you should definitely look into a supplement plan.
These days, the vast majority of seniors will choose between either Medicare Advantage or a Medicare Supplement (Medigap) insurance plan. Both of these options are sold by private companies like MetLife or Humana. They should function very similar to how private health insurance does. But the benefits they provide and the guarantees they offer are radically different. You need to know those differences before you sign on the dotted line.
To protect yourself and your finances, supplementing your Traditional Medicare with additional coverage is a cost-effective solution. You could go with either a Medicare Advantage policy, or a Medigap insurance supplement plan. We’ll cover each option in detail below.
Eliminating Coverage Gaps with Medigap Supplemental Insurance
There are ten Medigap plans in total: A, B, C, D, F, G, K, L, M, and N. There used to be more, but recent legislation has eliminated plans E, H, I, and J to eliminate redundancies in the system. Each plan is designed to cover common, problematic gaps in Traditional Medicare coverage. Additionally, each plan is exactly the same from state to state. For example, Plan F in Texas comes with the exact same benefits that it does in Massachusetts. The only thing that varies is cost, of course, as well as the companies available to underwrite the policy.
This useful chart details what each Medigap plan covers:
Medicare Part C: Medicare Advantage
Medicare Advantage goes by many names, including Medicare Part C or “Medicare Replacement”. The last moniker is probably the most accurate, because a Medicare Advantage policy effectively replaces your government-provided Traditional Medicare benefits with an identical (the bare minimum amount of coverage required by law has to equal that of Traditional Medicare) or a better policy from a private insurer. For some, the flexibility of being able to add additional coverage options, such as prescription drugs or dental, is appealing. For others, the elevated price tag which comes with such extras might be out of their budget range.
Keep in mind that when switching to a Medicare Replacement policy, it is highly likely that you may also have to switch doctors as well. Part of the reason that Medicare Advantage policies are competitively priced is due to their restricted networks. They choose the lowest-cost doctors and practices so that they can pay out low-cost claims. Then, hopefully, they pass those savings on to you. But for many senior citizens, the cost of keeping their doctor might be worth paying a little extra in premiums.
There are two different types of provider networks which Medicare Advantage plans utilize in order to deliver you the best possible care. They are called Health Maintenance Organizations (HMOs for short) and Preferred Provider Organizations (or PPOs).
Comparing Medigap and Medicare Advantage
Let’s start by talking about the supplement which is the easiest for most people to understand: Medicare Supplement Insurance policies, also known as Medigap. Medigap plans address the coverage gap problem with Medicare Parts A & B. With a Medigap policy, you won’t have to worry about paying a fortune for extended hospital stays, blood transfusions, or hospice care. It will also be easier for you to keep your coinsurance and co-pay costs under control with Medicare Part B.
The government has worked closely with private health insurance companies to make sure Medigap policies are standardized and fair. There are 10 different plans to choose from, regardless of whether you live in Massachusetts or Montana or anywhere in between. Some plans may only cover a few of the gaps, like Part A gaps, and not have as much to do with Part B gaps or other benefits; however, these plans usually tend to cost less. Comprehensive plans, on the other hand, like F or G, may require a higher monthly premium – but they will protect you from many outrageous expenses.
Then of course, there’s Medicare Advantage. This is the same thing as Medicare Part C which we described above. It is also a private insurance policy offered by private health insurance companies. But there’s a big difference: Medicare Part C completely replaces your Medicare benefits. The base benefits package starts out by offering the exact same thing as Medicare Parts A & B. From there, you can purchase the gap coverage you need instead of a Medigap policy. Further still you have the option to add prescription drugs, dental, vision care, and more to your Medicare Advantage policy. It all depends on what you can afford versus what you need.
Unfortunately, Medicare Advantage plans don’t come with the guarantees that Medigap plans do. Companies who provide Medigap policies work much more closely with the government to manage your Medicare costs. Medicare Part C providers, however, are pretty much left to their own devices once you decide to give up on Original Medicare. They can deny you coverage for a multitude of reasons, they can make you submit yourself to pre-certification, and they can discontinue coverage at their discretion. But there are certain circumstances under which they may be more affordable than Medigap.
Sorting out the differences between these two policies can be confusing and time-consuming. But you have help. We urge you to reach out and contact us in order to clear up any questions you have about these policies. And we’ll be more than happy to help you find a quote for a supplement that fits nicely into your budget.
|Questions||Medicare Advantage||Medicare Supplement|
|How are expenses covered under each plan?||The government is willing to pay for your health care premiums up to a certain point. Whatever else your Medicare Advantage provider deems appropriate will be your responsibility.||Expenses are handled with a single monthly premium, unless you go with a more conservative plan which only covers some of Medicare’s gaps.|
|Will I still have to pay for Part B?||Yes||Yes|
|What will it cost me?||There are certain situations in which seniors may not have to pay a premium for their Medicare Advantage plan.||You will be required to pay a fairly affordable monthly premium no matter where you live or what your circumstances are.|
|What will the plan cover?||Every Medicare Advantage plan covers the exact same benefits of Medicare Part A and B. Purchasing additional coverage is a very popular option.||Comprehensive Medicap plans like G & F will pay for nearly 100% of your Medicare coverage gaps in exchange for your monthly premium. Plans Like A and B will cover substantially less.|
|Is it easy to budget my health care expenses?||Your ability to budget can vary greatly with a Medicare Advantage plan. The more unpredictable your health care needs are, the more unpredictable your costs will be.||The more comprehensive your plan, the easier it will be to budget for expenses. Most seniors only have to pay for their monthly premium and certain Medicare Part B costs.|
|Is my plan guaranteed? Or can it be cancelled?||It is unsettlingly easy for your Medicare Advantage provider to cancel your coverage. It’s especially more likely if your health takes a turn for the worse or you have trouble paying for your share of your care costs.||Once you are approved for Medicare you are automatically approved for a Medigap Supplement. If you choose to purchase one your coverage can only be cancelled if you stop paying your premiums or if the company goes under.|
|Do I have to clear a pre-approval or pre-certification process?||Almost all Medicare Advantage providers will make you go through a pre-certification or a pre-approval process before they agreed offer you coverage.||All you have to do is meet the minimum requirements for Medicare. There are no pre-approval or pre-certification processes involved.|
|Am I limited to specific doctors or hospitals?||It is highly unlikely that you will have as many options with Medicare Advantage as you would with Medicare. On the bright side, this can help keep your plan reasonably affordable.||Because Medigap policies are so closely linked to Medicare, your Medigap coverage will be accepted at all of the same hospitals and doctors that Medicare is.|
|What type of plan is best for me?||Seniors in excellent health with a wide variety of medical care choices in their area can get the most value out of Medicare Advantage. This is especially true if they need additional coverage like dental, prescriptions, or vision.||If you don’t need extra forms of coverage, if you are older, if healthcare options are more limited in your area, and if you are in less than perfect health, there are many financial advantages to purchasing a Medigap insurance supplement plan.|
Helpful Medicare Resources for Massachusetts Residents
As informative as this article aims to be, we can only give you enough information to help you get started. Below, we’ve included a directory of experts who have experience in the Medicare field. If you get in touch with anyone at the offices below, they can help you with any specific Medicare insurance questions you may have:
Important Medicare-Related Healthcare Terms
- HMO: Health Maintenance Organization, this refers to a network of doctors and hospitals with a plans’ network.
- PPO: Preferred Provider Organization, this refers to a network of doctors and hospitals with a plans’ network.
- Co-Pay: Amount of money charged per visit to doctor, specialist, etc.
- Co-Insurance: A percentage required by the policyholder to pay out-of-pocket. For example, 80/20 coinsurance means the insurance company will cover 80% of the charges, and the policyholder pays the remaining 20% of the charges.
- Deductible: This is the amount of money required out-of-pocket by the policyholder before the insurance will kick-in and pay for any remaining charges. For example, a policy with a $1,000 deductible means that you must pay full healthcare costs out-of-pocket up to $1,000 before the plan will start coverage.