✔ Step #1 – Understanding Medicare

The Basics

Medicare is a Federal Health Insurance Program for:

  • People age 65 or older
  • People under the age of 65 with certain disabilities
  • People of all ages with the End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant)

Original Medicare Coverage

Medicare Part A and Part B are known as Original Medicare and are run by the Federal government. Medicare Advantage (Part C) and Medicare Prescription Drug Coverage (Part D) are sold by private insurance companies.

The different parts of Medicare help cover specific services. Medicare Part A (Hospital Insurance) covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Medicare Part B (Medical Insurance) covers certain doctors' services, outpatient care, medical supplies, and preventive services.

Most people are automatically enrolled in both Parts A & B upon reaching the age of 65. It is a good idea to check with Medicare about 2-3 months before going on Medicare to ensure everything is going smoothly. Medicare can be reached by calling 1-800-MEDICARE.

Medicare Supplemental Insurance

Medicare Supplement (Medigap) insurance is designed to fill in the gaps that Original Medicare does not cover. If you have Original Medicare and you buy a Medigap policy, here's what happens:

  • Medicare will pay its share of the Medicare-approved amount for covered health care costs.
  • Then, your Medigap policy pays its share.

Currently, there are 10 plans on the market ranging from Plan A to Plan N (there are Plans A, B, C, D, F, G, K, L, M, and N).

Medicare Advantage Plan

A "Medicare Advantage Plan" is also called "Medicare Part C" or a "Medicare Replacement Policy", all meaning the same exact thing. Medicare Advantage Plans are a direct replacement of Basic Medicare.

Medicare Advantage Plans provide all of your Part A and Part B benefits. If you’re enrolled in a Medicare Advantage Plan:

  • Most Medicare services are covered through the plan
  • Medicare services aren’t paid for by Original Medicare

Medigap is not a part of the Federal Medicare program. Instead, private insurance companies sell it.

Note that people with the end-stage renal disease (ESRD) generally do not qualify for Medicare Advantage plans. When you join a Medicare Advantage plan, you must continue paying your Part B premium. If you decide to enroll in a Medicare Advantage plan after being in Original Medicare (Part A and Part B) for some time, you may want to cancel your Medigap plan since it cannot be used to pay for Medicare Advantage costs.

If you decide to take the Medicare Advantage option as opposed to keeping your basic original Medicare, Medicare will no longer pay any of your claims.

Medicare Part D Prescription Drug Plans

Each Medicare drug plan has its own list of covered drugs (called a formulary). Many Medicare drug plans place drugs into different "tiers" on their formularies. Drugs in each tier have a different cost.

Your Medicare Advantage Plan (Part C) will disenroll you and you'll go back to Original Medicare if both of these apply:

  • Your Medicare Advantage Plan includes prescription drug coverage.
  • You join a Medicare Prescription Drug Plan (Part D).

Options


Option #1

1. Basic Medicare Parts A & B Only
2. *Optionally - Medicare Part D Prescription Drug Coverage

Option #2

1. Basic Medicare Parts A & B
2. A Medicare Supplement Policy (Pays After Medicare)
3. *Optionally - Medicare Part D Prescription Drug Coverage

Option #3

1. Basic Medicare Parts A & B
2. A Medicare Advantage Plan (Replaces Medicare Parts A & B)
3. *Optionally - Medicare Part D Prescription Drug Coverage

Medicare Advantage Plans are also not guaranteed renewable like Medicare Supplement Plans are. The way Medicare Advantage Plans are financed is by subsidies (financial aid ) from the authorities. Medicare will pay on average $600 - $800 per month into the Medicare Advantage firm in case you opt to choose the Medicare Advantage option as opposed to maintaining your fundamental original Medicare. If you do this, Medicare will no longer pay any of your own claims. Some Medicare Advantage Plans can include a Part D Drug Plan. Some programs also have very reduced premiums. However, most seniors want quality policy, and an insurance plan that is going to be present to pay all their claims if or when they have health problems. Many seniors do not believe that a Medicare Advantage Plan will offer adequate coverage, and often prefer Medicare Supplement Policies. Medicare Advantage Plans normally have significant co-pays, deductibles, co-insurance, and out-of-pocket expenses, which makes it extremely hard to deal with, and frequently too expensive for individuals on a fixed income to afford.


Continue to Step #2 | Understand






Six Steps To A Medicare Supplement Plan: