Ruth had lots of questions at our “social distancing” lunch. She’s been talking with friends about the two (2) options commonly used to supplement or replace Original Medicare. Yes, all this “Medicare stuff” can be confusing and may seem overwhelming so let’s go back to the basics.
One option is a Medicare Supplement plan also known as a Medigap plan. Medicare Supplement plans work with Original Medicare. The other option is a Medicare Advantage plan which is an alternative to Original Medicare. If you’re trying to decide between a Medicare Supplement and a Medicare Advantage plan or if you’re just unsure about the benefits each program offers, here’s a quick, basic overview. A Medicare Supplement plan helps pay the out-of-pocket costs Medicare does not cover including copays, coinsurance and deductibles. This gives you a safety net against high medical costs and helps you manage your medical bills - you know what you’re expected to pay. You avoid the unexpected large medical bills (which always come at the wrong time, right?). Providers who accept Medicare must accept your Medicare Supplement plan. Medicare supplement plans may save money for people who need high cost or frequent care. Once you are enrolled, the plan benefits will not change. Medicare Supplements plans are quite comprehensive. Neither Original Medicare nor a Medicare Supplement cover outpatient prescription drugs. To have coverage for (most) prescription drugs, you will need to enroll in a Medicare prescription plan. You’ll end up with two (2) ID cards – Medicare supplement and Medicare prescription. You will pay premiums for Medicare Part B, Medicare supplement plan and Medicare prescription plan. The other option is a Medicare Advantage plan (also known as Medicare Part C). Medicare benefits are paid through a private insurance company (instead of through Medicare). Medicare Advantage plans cover all Medicare services - inpatient hospital and outpatient services. Each Medicare Advantage plan can charge different out-of-pocket costs. They also have different “rules” regarding how you get services. Is a referral required to see a specialist? Do your doctors accept the plan? Most plans have a “network” of providers/doctors that reduces your cost for care. Medicare Advantage plans have an annual out of pocket maximum which means there is a maximum you could have to pay each year which includes copays, co-insurance or a deductible. Extra benefits may include vision or dental (check providers who accept those plans as well). Medicare Advantage plans and rules are subject to change every January 1. Medicare Advantage are comprehensive. Many Medicare Advantage plans include outpatient prescription drug benefits. You will pay premiums for Medicare Part B, Medicare Advantage (if it has a premium) and, perhaps, a Medicare prescription plan. Want to look a little closer to see which plan works better for you? Need help “muddling” through these options? There is a lot to think about. Still scratching your head? Call me at 501-868-6650 and say “Caroline, can we talk?”
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AuthorCaroline Beauchamp specializes in personalized life and health insurance solutions. Archives
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