If you are already enrolled in original Medicare or will be enrolling soon, you have a decision to make about your secondary coverage. Many people find choosing a Medicare plan to be a daunting task but it really does not need to be complicated. With a basic understanding of the options, you will be able to make a logical decision about the type of plan or company you choose. This post will break down the choices and help provide a little insight about each.
So, what choices to you have? There are really only 4 and we will go over each…..
Original Medicare A and B only- Original Medicare A and B provides medical coverage on a basic level. Some people choose to simply use original Medicare as the only coverage. With A and B you are covered at 80% for doctors visits, testing and just about any other outpatient procedure. (after a $140 deductible for the year) Providers will bill original Medicare and you will pay what original Medicare does not cover. You will pay the 20% that Medicare does not pay but you only pay 20% of what Medicare allows which is a much lower number than paying 20% of retail charges. Hospital coverage is provided at 100% for 60 days after a deductible of $1,100.00. A daily cost share is taken on after day 60. Drug coverage is not included with A and B only.
Overall: This option can be risky in the event that long term high volume/frequency care is needed. Not having drug coverage in place will lead to a potential penalty down the road in the event a drug plan needs to be purchased.
Original Medicare A and B and a stand alone Part D drug plan- You may choose to have original Medicare A and B for your medical coverage and then purchase a stand alone part D drug plan. A part D drug plan is simply a plan you purchase from an insurance company to provide drug coverage. The government or Medicare do not offer a plan you can buy. The plans are only offered by private insurance companies. Average part D Rx plans cost from $15 to $50 a month depending on the plan. The key is to find the plan that covers your drugs at the lowest copay amounts.
Overall: Still leaves risk on the Medical side but the drug coverage is in place so there will not be a future penalty.
Original Medicare with a Stand alone drug plan and a Medicare Supplement- This is the same as above but in this approach a Medicare supplement plan is also purchased. The Medicare supplement plan covers the medical expenses not covered by original Medicare. It is secondary to original Medicare. The provider bill Medicare first and the supplement picks up the difference. (or a portion of it depending on which supplement you choose). A part D drug plan could also be purchased to provide drug coverage. Supplements are standardized in most states. This means that if you choose a plan F supplement, the benefits will be exactly the same no matter which company is offering it. The only difference will be in the monthly premium.
Popular Medicare Supplement plans are Plan F, Plan N, Plan L and High Deductible F. Prices vary by state and company. Supplements are very predictable and can cover 100% of Medical expenses if plan F is chosen. They also do not have any type of network which is a common reason many people choose them.
Overall: Supplements are a good choice. They offer very strong coverage and let you go to any doctor that accepts Medicare. Supplements tend to be very popular with people that have health conditions. The drawbacks to a supplement are that the monthly premium can be substantial and you need to buy drug coverage separately.
Medicare Advantage Plans– A Medicare Advantage Plan (called an MA or MAPD) is a plan offered by a private insurance company. The Advantage plan offers Medical and Drug coverage with one program. The plan is also primary and replaces original Medicare. Advantage plans have providers networks and look similar to a group based under 65 health plan. A copay structure is used in these plans which is why they are sometimes called “pay as you go” plans. When you go to the provider for services, they charge a set copay for each type of service provided. There is no need to buy RX coverage with a Medicare Advantage Plan as the drug coverage is included. Many companies offer the plans for no additional premium. (You still pay your Medicare Part B premium of $104.00 a month) The term $0 premium plan is often used.
Some MAPD plans are HMO type plans that are in network only plans. Others are set up in a PPO or POS format which allows the member to go out of network. There is a higher cost share/copay for using non participating providers. Referrals for specialists are no longer required by most plans.
Overall- You need to check you plan network for your doctor and determine if you want plan with out of network coverage or not. MAPD plans are very popular no and represent a larger share of enrollments than the other options above. These plans are a good choice for people in relatively good health. The copays can add up when there I a high volume of care being received.
Consider your own health and care needs when trying to determine which type of plan you would like. Our agency is independent which allows us to hold contracts with a number of companies working with all three types of plans listed above. We can help you determine the type of plan you want and then find the company that is the best fit for you. The companies pay us a commission directly so we do not bill clients for our services. Feel free to call or email us if you would like to discuss options further.