Virginia citizens, along with members of all the other 50 states, are able to enroll in the federal Medicare program during the year in which they turn 65. Original Medicare, which consists of Medicare Part A and Medicare Part B, helps retired citizens maintain adequate health care while living on a fixed income. Part A primarily covers hospital stays and treatments, while Part B takes care of more basic needs, such as doctor visits.
The Medicare program is designed to be as affordable as possible, but there are some costs associated with reaping its benefits. For starters, Part B has yearly deductibles and monthly premiums which all enrollees are required to pay, based on estimated income. You can take a look at those costs here. For some beneficiaries, Part A is free – but for others, it requires a deductible. This all depends on your past work history. If you have worked less than 10 years (or 40 quarters), you will be required to pay the deductible for Medicare Part A.
|Medicare Part A (Hospital Coverage)
||Medicare Part B (Medical Insurance)
|Medicare Part C (Medicare Advantage)
||Medicare Part D (Drug Coverage)
The senior population of Virginia has more than one million residents currently accepting Original Medicare benefits. Of those, only 15% (180,519 people) have decided to replace their basic Medicare plan with a Medicare Advantage policy. Another 22% have opted in for the slightly more popular Medigap supplemental insurance policy. And the remaining 63% of Medicare recipients are either supplementing their coverage gaps through an employer program, or they are leaving themselves vulnerable to potentially expensive gaps in their Medicare coverage.
Important: you must be enrolled in Traditional Medicare (Medicare Parts A and B) before you will be allowed to purchase supplemental coverage. If you have not started the process yet, click here to enroll in Medicare today.
To borrow a financial term, supplementing Medicare is a way of “Hedging your bets”. You could take a risk and bet that you won’t actually need to use your Medicare benefits. If you are newly retired and still fairly healthy, this bet might work out for you (financially speaking). But if you are older, or have chronic conditions, protecting your retirement fund and limited budget from many of the out-of-pocket expenses associated with Medicare coverage gaps might be a better strategy. Just look at how much Traditional Medicare could cost you without supplemental coverage:
|Medicare Part A Costs||Medicare Part B Costs|
There are a variety of supplemental plans available for you to choose from. The two major players in the field, Medigap and Medicare Advantage, will be discussed here in this article. Our goal is to give you enough helpful information to get you started on meeting your health care needs.
Traditional Medicare and Medigap are two completely separate forms of coverage. However, Medigap policies have been specifically designed to work with Original Medicare. They have been crafted to fill in the coverage “gaps” of Medicare – hence the “gap” part of “Medigap” – to protect you from unexpected costs. The Alphabetically-named plans are A, B, C, D, F, G, K, L, M, and N. The Medicare Authorization Act, passed in the summer of 2010, phased out the superfluous plans E, H, I, and J. It is also worth mentioning that Plan A in Nebraska has the exact same benefits as Plan A in Virginia; the only elements which vary by region are the price, and the providers.
Take a look at what Medigap Plans A-N have to offer:
|Type||Starting From||Part A Deductible||Part B Deductible||Excess||Nursing||Travel|
|F||$98||$0||$0||100% Covered||100% Covered||100% Covered||Request Info|
|C||$114||$0||$0||Not Covered||100% Covered||100% Covered||Request Info|
|G||$91||$0||$147||100% Covered||100% Covered||100% Covered||Request Info|
|B||$89||$0||$147||Not Covered||Not Covered||Not Covered||Request Info|
|N||$71||$0||$147||Not Covered||100% Covered||100% Covered||Request Info|
|D||$89||$0||$147||Not Covered||100% Covered||100% Covered||Request Info|
|A||$62||$1||$147||Not Covered||Not Covered||Not Covered||Request Info|
|L||$66||$304||$147||Not Covered||75% Covered||Not Covered||Request Info|
|K||$35||$608||$147||Not Covered||50% Covered||Not Covered||Request Info|
|M||$83||$608||$147||Not Covered||100% Covered||100% Covered||Request Info|
Medicare Advantage is technically more of a replacement than a supplement for Original Medicare. It is also sometimes referred to as Medicare Part C. What an Advantage plan does is that it replaces your Original Medicare from the government with identical (or sometimes better) coverage from a private insurance company. At the very least, you will receive the exact same benefits as you would with traditional Medicare, because this is required by law. Some companies offer extra benefits, such as vision, prescription drugs, or dental, in order to persuade customers. However, the more coverage and benefits you sign up for, the higher your overall costs will be.
Another potential drawback for Medicare Advantage is the restrictive networks. Whether it’s an attempt to cut costs or provide premium treatment, Medicare Advantage providers are sometimes picky about which doctors and health services they allow into their network. There may be a very real risk that you will have to change doctors, which is something to keep in mind before deciding on a plan.
Medicare Advantage members can only get health care from providers and facilities within their plan’s HMO (Health Maintenance Organization) or PPO (Preferred Provider Organization) network. Going outside of your plan’s network can be difficult and costly.
|Cost||Plan Name||Coverage Type||Premium||Deductible||Rating|
|$0||Humana Gold Plus H2012-029 (HMO)||Health and Drug||$0.00||$0|
|Cost||Plan Name||Coverage Type||Premium||Deductible||Rating|
|$0||HumanaChoice R5826-063 (Regional PPO)||Health Only||$0.00||$0|
|$0||Today's Options Advantage 800 (PPO)||Health Only||$0.00||$0|
|$432||Today's Options Advantage Plus 850B (PPO)||Health and Drug||$36.00||$0|
Everyone’s medical needs are different. While Original Medicare may be more than enough for some, there are others out there who could really benefit from a Medigap or a Medicare Advantage policy. It is up to you and your insurance agent to analyze your specific needs and figure out what type of supplement coverage you need.
|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.|
To help you make the most educated decision possible, we’ve gathered a pool of resources and contact information to help you find answers to your Medicare, Medigap, and Medicare Advantage questions locally. Reaching out and making contact with your local Medicare insurance offices will give you some of the best information you could ask for.
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