Making an educated decision about your healthcare options is extremely important. Selecting healthcare plans with misinformation or on a whim can be a costly mistake. In this post, I will break down for you the differences between Medicare supplement versus medicare advantage plans and why advantage plans may not be the advantage you thought they would be.
What is Medicare?
Medicare is the federal health insurance program for people who are 65 or older, some younger people who have disabilities and people who have end-stage renal disease. There are 3 major parts to Medicare, each covering various services. They are:
Medicare Part A (Hospital Insurance)
Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
Medicare Part B (Medical Insurance)
Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
Medicare Part D (prescription drug coverage)
Part D adds prescription drug coverage to original Medicare, some Medicare cost plans, some medicare private-fee-for-service plans, Medicare medical savings account plans
Understanding Medicare Supplement Insurance or MediGap
Medicare supplement insurance or MediGap is additional insurance (with or without a monthly premium) you can get to help cover expenses that original Medicare doesn’t cover. Some of these expenses include: copayments, coinsurance, and deductibles.
In order to qualify for or be eligible for Medicare Supplement Insurance, you must have original Medicare, Part A and Part B in place. Also, it is important to understand that, Medigap insurance has an open enrollment period. The open enrollment period is six months from the first day of the month of your 65th birthday – as long as you are also signed up for Medicare Part B – or within six months of signing up for Medicare Part B.
Medigap insurance plans are organized in levels. Those levels are A through N and each offers different levels of health coverage. Note: Medigap plans E, H, I, and J are no longer available to new subscribers.
Medicare Advantage Plans
A Medicare Advantage Plan (sometimes referred to as Part C or MA plans) is a plan that is designed to be an alternative to original Medicare. Medicare Advantage Plans are only offered by private insurance companies.
There are several types of Medicare Advantage Plans to choose from:
- HMO (Health Maintenance Organization),
- PPO (Preferred Provider Organization),
- PFFS (Private Fee-for-Service),
- SNP (Special Needs Plan),
- HMO-POS (Health Maintenance Organization Point-of-Service),
- MSA (Medical Savings Account)
When entertaining the thought of electing a Medicare Advantage plan for your coverage, keep these things in mind:
- You may have limited provider resources versus the freedom of visiting a doctor of your choice through original Medicare
- Some procedures and treatments covered by Medicare Advantage Plans require physician referrals and plan approvals
- You could be denied seeing a specialist or surgeon of your choice
- Most Medicare Advantage plans have regional (instead of nationwide) networks of participating providers. To enroll, you must reside in the Medicare Advantage plan’s service area at least 6 months of the year. If you divide your time between homes located in different areas, this requirement may be difficult to meet.
- Initially, it may seem more cost effective to elect a Medicare Advantage plan but these savings may cost you in areas of:
- Required to pay Part B premiums
- Specialist copay
- Outpatient services
- Part B medications and drugs like chemotherapy
- Maximum out-of-pocket limits are high ($6,700 for 2019)
When looking into Medicare coverage, know all the options available and study the pros and the cons of each option. If reviewing all of the information seems overwhelming, I can help! Schedule a free consultation for help making an informed decision. I can be reached at (813) 391-3448.