Texas residents have access to the federal Medicare program. Traditional Medicare refers to Part A and B of Medicare. While Medicare provides basic healthcare benefits, it does not cover 100% of charges. There are supplemental insurance plans designed to help you fill in the “gaps” and we will discuss those options later on in this article. Medicare Part A comes free as long as you have worked at least a total of 10 years (40 quarters). If you do not have 10 full years work experience/tax filing, you may be required to pay a premium for Medicare Part A. In addition, if you wish to obtain Medicare Part B, you must pay an additional monthly premium; click here to see Part B premium costs. To learn more about Medicare Part A or B premium costs, you can contact your local Social Security office. Below is a helpful chart summarizing the features of the 4 basic parts to Medicare coverage.
|Medicare Part A (Hospital Coverage)
||Medicare Part B (Medical Insurance)
|Medicare Part C (Medicare Advantage)
||Medicare Part D (Drug Coverage)
In Texas alone, there are about 3,187,332 Medicare beneficiaries. Of those, 29% or 924,326 are enrolled into a Medicare Advantage Plan, and about 18% or 566,289 are enrolled into a Medicare Supplement (aka Medigap) Plan. This leaves the remaining 1,696,717 individuals to be either covered by an alternative individual healthcare plan, employer-sponsored group or retiree plan, or without additional coverage other than basic Medicare benefits.
It is important to understand that supplemental Medicare plans cannot be purchased if you are not currently enrolled in Medicare. For more information on Medicare enrollment, go ahead and click that link.
Medicare only covers a small portion of your total healthcare costs. There are a few things that Medicare may not cover at all (like elective cosmetic surgery), however there are many things that are approved by Medicare, but are only partially covered. For example; if you need any Medicare Part A (Hospital) services, you are required to pay the Part A annual deductible first before Medicare would cover anything.
|Medicare Part A Costs||Medicare Part B Costs|
Likewise, if you needed any Medicare Part B (Medical) coverage, you would not only be required to meet the Part B annual deductible, but you would also need to pay the 80/20 co-insurance portion of the costs. This means that Medicare pays 80% of the costs for Part B benefits, and you have to pay the remaining 20%. By now, I think you can see the shortcomings of Medicare benefits alone, and why it is extremely important to consider purchasing additional insurance, like Medicare Supplement Plans or Medicare Advantage Plans, to help pay these out-of-pocket costs.
Medicare Supplement Plans are also knows as Medigap Plans. Medigap plans are designed to fill in the “gaps” left by Medicare (hence the word MediGAP). Currently, there are 10 different Medigap plans on the market, and all plans are designed and regulated by the federal government. The ten plans are organized in a letter system, and they consist of: Plan A, B, C, D, F, G, K, L, M, and N. Plans E, H, I, and J were eliminated on June 1st, 2010 due to the Medicare modernization act which was meant to streamline the policies on the market and bring the core benefits up-to-date. All 10 plans currently sold today must offer the same benefits and coverage (regardless of company), meaning price is the only difference. This makes the shopping process easy on the consumer knowing they are comparing apples to apples.
Below is a Medigap policy comparison chart showing what each plan covers:
|Type||Starting From||Part A Deductible||Part B Deductible||Excess||Nursing||Travel|
|F||$91||$0||$0||100% Covered||100% Covered||100% Covered||Request Info|
|C||$95||$0||$0||Not Covered||100% Covered||100% Covered||Request Info|
|G||$95||$0||$147||100% Covered||100% Covered||100% Covered||Request Info|
|B||$87||$0||$147||Not Covered||Not Covered||Not Covered||Request Info|
|N||$71||$0||$147||Not Covered||100% Covered||100% Covered||Request Info|
|D||$85||$0||$147||Not Covered||100% Covered||100% Covered||Request Info|
|A||$69||$1||$147||Not Covered||Not Covered||Not Covered||Request Info|
|L||$76||$304||$147||Not Covered||75% Covered||Not Covered||Request Info|
|K||$51||$608||$147||Not Covered||50% Covered||Not Covered||Request Info|
|M||$84||$608||$147||Not Covered||100% Covered||100% Covered||Request Info|
Medicare Advantage Plans are also known as Medicare Part C, or Medicare Replacement Policies. There is a lot of confusion regarding these types of policies and how they work. We will try to eliminate that confusion here. Medicare Advantage plans are a “replacement” of Medicare, and if selected—although you will technically still have your Medicare Parts A & B coverage activated, Medicare will no longer be the one paying your claims. Rather, your new Medicare Advantage Plan will be your primary health insurance provider. Medicare Advantage is a specific type of insurance plan that has been approved by Medicare to offer “equal or greater benefits” comparable to what Medicare provides. Individuals that elect this option will be required to follow the rules and regulations of the specific company they choose, since that plan now stands in place of Medicare.
Medicare Advantage plans can combine many benefits into one policy, such as drug coverage, vision & dental, etc. This tends to be a main reason why many individuals like this type of coverage. The only downfall with Medicare Advantage plans is that you are required to stay within the network of providers that your company offers.
If you have an HMO (Health Maintenance Organization) type policy, your network may be more restricted—whereas if you have a PPO (Preferred Provider Organization) type policy, you may have more flexibility to see the doctors and providers that you choose. However, in either plan type, you are still required to stay within the company’s network and cannot simply choose any provider at your free will.
|Cost||Plan Name||Coverage Type||Premium||Deductible||Rating|
|$0||Humana Gold Plus H4510-018 (HMO)||Health and Drug||$0.00||$125|
|$0||AARP MedicareComplete SecureHorizons (HMO)||Health and Drug||$0.00||$0|
|$0||AARP MedicareComplete SecureHorizons Essential (HMO)||Health Only||$0.00||$0|
|Cost||Plan Name||Coverage Type||Premium||Deductible||Rating|
|$0||Care N' Care Health Plan I MA-Only (PPO)||Health Only||$0.00||$0|
|$0||Care N' Care Health Plan III (PPO)||Health and Drug||$0.00||$0|
|$432||Care N' Care Health Plan II (PPO)||Health and Drug||$36.00||$0|
Below is a side-by-side comparison chart of Medicare Supplement vs. Medicare Advantage Plans. Each individual has a different opinion and a different set of health insurance needs. It is up to you and your insurance agent to decide what plan is best for you.
|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.|
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