The Federal Medicare Program is available to any senior citizen age 65 or above. During the year in which you turn 65 is the year that you enroll in the program (enrolling after you turn 65 could result in late enrollment fees and penalties). Once you are enrolled, you will begin receiving health care benefits from Medicare Parts A and B (also known as “Traditional Medicare”). The chart below outlines all of the benefits which Traditional Medicare offers. What it does not outline are the potentially expensive gaps in this coverage – but don’t worry, we’ll get to that part later.
Speaking of expenses, Medicare isn’t completely free. There are some basic fees associated with parts A and B. Part B expenses can be calculated according to the data on this page, but they are designed to be affordable for those retired individuals living on a fixed income. Part A might be free, but that depends on your previous employment history. Anything less than 10 years (or a total of 40 quarters) will, unfortunately, require you to pay a premium for Part A benefits. For those with a longer work history, this premium is not required.
|Medicare Part A (Hospital Coverage)
||Medicare Part B (Medical Insurance)
|Medicare Part C (Medicare Advantage)
||Medicare Part D (Drug Coverage)
In the state of Montana, there are 177,835 seniors currently receiving their federal Medicare benefits. 17% of them (30,232 residents) have replaced their federal Medicare coverage with a Medicare Advantage policy. However, Medigap supplement policies are more popular in Montana: 50,954 seniors are supplementing their Traditional Medicare with such policies. The remaining 96,649 beneficiaries are likely managing their benefits through some other means, such as an employer benefit program, or relying on Traditional Medicare alone to manage their health care needs.
If you are approaching the age of 65 but have not enrolled in medicare yet, click that link to get the process started. Enrolling late could cost you in both time and money later on down the road.
Health care costs are rising at an alarming rate with virtually no relief in sight. For the most part, your Medicare benefits will protect you from the brunt of these costs. However, there are some dangerous gaps in Traditional Medicare coverage which, if you aren’t careful, will become 100% your financial responsibility. Some of these gaps can result in the following expenses:
|Medicare Part A Costs||Medicare Part B Costs|
This is why an increasing number of seniors are choosing to supplement their Traditional Medicare with either a Medicare Advantage or a Medigap supplement policy. These are the two most popular forms of supplemental coverage available for retired persons 65 and older who are currently receiving Medicare benefits. Below, we will discuss both supplements in further detail so that you can make a well-informed decision about your health care needs.
Medicare supplement insurance (usually referred to as Medigap) is designed to cover the “gaps” which are so common in Traditional Medicare. Private insurance companies and government Medicare experts have collaborated to create ten comprehensive health insurance policies which offer affordable coverage and protection from out-of-pocket expenses. Plans A-N (minus plans E, H, I, and J, which were discontinued in 2010) are now available and universal across all 50 states. Prices and providers will vary by region, however.
Here’s what type of coverage you can expect from each of the ten plans:
|Type||Starting From||Part A Deductible||Part B Deductible||Excess||Nursing||Travel|
|F||$108||$0||$0||100% Covered||100% Covered||100% Covered||Request Info|
|C||$111||$0||$0||Not Covered||100% Covered||100% Covered||Request Info|
|G||$93||$0||$147||100% Covered||100% Covered||100% Covered||Request Info|
|B||$92||$0||$147||Not Covered||Not Covered||Not Covered||Request Info|
|N||$76||$0||$147||Not Covered||100% Covered||100% Covered||Request Info|
|D||$92||$0||$147||Not Covered||100% Covered||100% Covered||Request Info|
|A||$67||$1||$147||Not Covered||Not Covered||Not Covered||Request Info|
|L||$73||$304||$147||Not Covered||75% Covered||Not Covered||Request Info|
|K||$43||$608||$147||Not Covered||50% Covered||Not Covered||Request Info|
|M||$97||$608||$147||Not Covered||100% Covered||100% Covered||Request Info|
Medicare Advantage can seem a little complicated, but we’ll attempt to clear up some of the confusion here. For starters, these policies act more like a replacement of Traditional Medicare than a supplement. However, as required by law, the private companies who underwrite these policies have to offer you the same or better coverage that Traditional Medicare; they cannot offer you any less. Some plans even include additional coverage options, such as prescription drugs or dental, for a modest additional cost. Also, for many seniors, the convenience of having all benefits under the same policy makes their life just a little bit easier.
You should keep in mind though that Medicare Advantage policies aren’t perfect. While they may be priced competitively in certain areas, this is likely due to a more restrictive network of physicians and hospitals. The possibility that you may have to switch doctors is highly likely. And once you sign up, you will be transferring responsibility for your health care from the federal government to that of a private company, which is more vulnerable to market whims. It is a good idea to do plenty of research on the stability of the company and the doctors available in their Advantage network before signing the dotted line on any new policy.
Depending on your area, your local Medicare Advantage plan will rely upon a Preferred Provider Organization (PPO) or a Health Maintenance Organization (HMO) for your care. Getting care outside of either one of these networks could be costly.
|Cost||Plan Name||Coverage Type||Premium||Deductible||Rating||There are no plans to show|
|Cost||Plan Name||Coverage Type||Premium||Deductible||Rating||There are no plans to show|
This chart below details some of the finer differences between these two popular policies. It may also answer some important questions you are likely to have about them:
|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.|
This article contains enough helpful information to get you started on your search for the right supplement policy. But because the topic is so nuanced, it is difficult to provide enough information for everyone. For this reason, we’ve included the searchable directory below. It contains contact information for local Montana insurance experts in your area who are qualified to answer any questions you may have.
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