While most individuals embrace the aging process, Medicare is excellent coverage that many seniors look forward to obtaining. Medicare has been providing health insurance coverage since 1965 for individuals 65 and older as well as certain disabled Americans.
Over 15% of the country is currently enrolled in Medicare today and that’s a definite bonus after having worked for most of our lives. Being on Medicare means having Hospital and outpatient coverage for many services.
Although, many seniors are unaware of the coverage they have and what expenses they’re responsible for paying. Having a Medicare Supplement could help you plan your health care expenses better.
Traditional Medicare Benefits
Medicare consists of two main parts:
- Part A (Hospitalization)
- Part B (Outpatient and DME supplies)
Medicare Part A is typically premium-free and provides coverage for your hospitalizations and skilled nursing facility stays. Additionally, Part A benefits provide coverage for home health and hospice care.
Part B premiums are ever-changing, typically they go up annually based on inflation. However, the government takes into consideration individual incomes, paid taxes and annual expenses. Many people with Part B don’t pay the full Part B premium.
Extra Help is available to those that qualify.
Part B benefits cover your outpatient costs for doctors’ visits, lab work, diagnostic testing, physical therapy, and outpatient surgeries.
Regardless of whether Medicare Part A or Medicare Part B is being used, each plan only covers at 80%. The remaining 20% leftover is the Medicare beneficiary’s responsibility to pay.
Both Plan policies only take effect after the Part A and Part B deductibles have been met. Each year the deductible cost changes so you can log onto Medicare.gov to see the exact rate for each deductible.
How to Qualify for Medicare
To become eligible for Traditional Medicare benefits, individuals must be at least 65 years of age.
When enrolling in Traditional Medicare you have a seven-month Open Enrollment Period (OEP). The OEP begins the three months leading up to your 65thbirthday, continues through your birthday month, and the remaining three months after turning 65.
Failing to enroll for Medicare Part A or Medicare Part B during the Open Enrollment Period can result in penalty fees.
Medicare Part A Penalty:
If you have Part A premium, an extra 10% is added for each year gone without Part A benefits. Based on how long one goes without Part A benefits will determine the number of penalty fees.
Medicare Part B Penalty:
With the Medicare Part B penalty, the monthly premium is increased an extra 10% for every year without Part B benefits. With the Part B penalty, the increased premium rates are paid for the entirety of having part B benefits.
Medicare is also available for certain individuals with end-stage renal failure and certain other disabilities. For those individuals who also receive social security benefits or certain Railroad Retirement Benefits, you’re automatically eligible and enrolled in Medicare Parts A and Part B after two years.
Part C Medicare Advantage Plans
Medicare Advantage Plans are provided by private insurance companies within your area. Premiums are based on the individual plans offered.
Part C Plans are oftentimes referred to as Medicare Supplement Plans as their benefits will take over coverage for that of Traditional Medicare Part A and Part B.
Oftentimes, Medicare Advantage Plans come with cheaper premium costs. So, those living on a fixed income find the sound of these policies appealing.
However, with the cheaper premium prices come at a price.
Medicare Advantage shortcomings include:
- Restrictions
- Referral requirements to see a specialist
- Coverage limitations
- Limited doctor, pharmacy and hospital networks
- Limited coverage areas.
What seems like being more valuable, can end up costing more for the individual when it comes to their out of pocket cost. Coinsurance, deductibles and copayments are commonly discussed when you enroll in these plans.
Medicare Part D
Traditional Medicare offers no insurance benefits for prescription medications. With medications, especially brand name, the out of pocket costs at the pharmacy can be downright astronomical!
By obtaining a Medicare Part D Plan, AKA, a Medicare Prescription Drug Plan (PDP), you can get those medically necessary prescriptions at a lower price. In some cases, you can get them at no cost whatsoever.
Offered by the individual health insurance companies, you can pick the best Part D Plan to suit your prescription medication needs. Depending on the policy will depend on your premium prices.
Another bonus of enrolling in a Medicare Part D Plan is you will avoid the penalty fees.
Like the penalty fees of Original Medicare, failing to enroll during your 7-month initial enrollment period will result in an increase in the Part D premium charge.
Depending on how long one went without drug coverage will determine the additional premium fees each month.
Medicare Supplement Plans
There are also Medicare Supplement Plans, that like Advantage Plans, are purchasable through your local private insurance carriers.
With Medigap Plans, they work alongside the already excellent Traditional Medicare benefits. These plans provide extra coverage for those items not originally covered by straight Medicare.
Pending on which Plan is chosen, items like deductibles, coinsurance, copayments and other items not covered by Medicare can cost less for the beneficiary. In some cases, there are plans that offer complete coverage.
There are ten letter plans available to choose from and depending on your individual healthcare needs will depend on which plan best suits you.
For example:
Plan F
This plan provides 100% coverage of both your Medicare Part A and Medicare Part B deductibles.
It has the added benefit of paying for:
- Medicare Part B’s copayments
- Foreign travel emergency coverage
- The remaining 20% coinsurance for your Part A and Part B fees
While Plan F is the most popular due to the great additional benefits, it also comes with a higher premium price tag.
High Deductible Plan F
There is also a Medicare Supplement Plan F High Deductible version that provides the exact same benefits, just with a deductible. The added bonus of this specific plan is there is a lower monthly premium so it’s cheaper for those on fixed incomes.
Plan G
This plan is another great Supplement Plan that’s also comparable to Plan F, however, there is no Medicare Part B deductible coverage.
Many times, the savings in Plan F premiums is more than the Part B deductible, meaning you get comprehensive coverage at a great price. Besides, Plan G typically has lower annual rate increases when compared to other plans.
Plan N
With this specific policy, it’s considered, “cost-sharing”. While the Medicare Part A deductible is completely covered, the beneficiary will be required to pay a small copayment for ER and doctor’s office visits.
It’s important to research all Medicare plans available, prior to picking your “perfect” plan. What works for one individual, may not work for another.
There’s plenty of information available regarding not only Traditional Medicare benefits, but also Medicare Advantage as well as Medicare Supplement Plans.
Medicare low Income Plans
While Medicare offers good healthcare coverage, those living on a fixed income may find it hard to afford monthly premiums, deductibles, coinsurance and copayments.
Even with lower premiums associated with Medicare Advantage plans or more coverage with Medicare Supplement Plans, the out of pocket costs can still be quite burdensome.
Those still struggling with healthcare costs there are Medicare Savings Programs that you may qualify for, applying is highly recommended when you meet the income requirements.
Additionally, each individual state has their own State Health Insurance Program, also known as SHIP. SHIP can provide financial assistance and relieve some of the stress associated with out of pocket costs for health insurance.
Changes in Medicare as of 2020
In the upcoming years there’s always the chance of change when it comes to not only premium and deductible prices, but also changes in policies.
The most major upcoming change will be the doing away with First-dollar coverage plans. What this means is that any of the Medicare Supplement Plans that leave a Medicare beneficiary without any out of pocket costs, will no longer be available.
This affects the 3 major first-dollar coverage Supplement Plans:
- Medicare Supplement Plan C
- Medigap F
- High Deductible F policy
This change in 2020 is mainly due to congress feeling as though Medicare beneficiaries who have no deductibles or out of pocket costs, will then no longer overuse healthcare services they don’t necessarily need.
This upcoming change will only affect those eligible for Medicare benefits after 2020. Luckily for those who currently carry or are eligible prior to 2020, will be, “grandfathered in.” This means you may still reap the benefits of those first-dollar plans!
There will be other options available for those looking to enroll after 2020. You can still enroll in Medicare Supplement Plans with just some slight changes and a small overall increase in your out of pocket costs.
Getting good health insurance to converge should be simple. Traditional Medicare benefits, a Supplemental insurance plan as well as a Prescription Drug Plan can provide individuals with optimal healthcare coverage.
Medicare is readily available, easy to obtain and most providers take the insurance. Regardless of what you may have heard about Medicare in the past, take action and enroll in Medicare as soon as you become eligible.
The sooner you do the sooner you too can start benefiting from our government appointed healthcare!