Original Medicare vs Medicare Advantage Plans

traditional medicare

Turning 65 and looking for health case benefits offered by government?. Don’t worry, You’re eligible for Medicare benefits by default. However there are many ways to get the medicare benefits. Seniors can get the health care coverage either through Original Medicare or Medicare Advantage Plan. I will try to give simple examples and explain the raging debate of Original Medicare vs Medicare Advantage Plans.

Original Medicare

Original medicare is a federal program, comprises of medicare part a and medicare part b. You can enroll in both part a and part b. It is recommended that you should have both part a and b. Medicare Part A is also called hospital insurance as it provides in-patient coverage. Part B is called medical insurance because it covers outpatient costs.

Original Medicare

Original medicare is not free. You have to pay deductible and coinsurance to get the services. As far as premium is concerned for part a and b, there is no premium for part b. However medicare part a has premium if you haven’t paid medicare taxes for at least 10 years.

Medicare Advantage (MA)

Unlike Original Medicare which is offered by federal government, Medicare Advantage (MA) plans are offered by private companies. Medicare advantage is also called Part C or sometimes called as Medicare replacement plans.

original medicare vs medicare advantage

Government approves the private companies to provide the part c coverage. If you are planning to join medicare advantage plans, you don’t have to worry about medicare part a or part b. Because part a and b both are included in medicare advantage plan. So you will get the benefits of both part a and b plus some additional benefits like dental benefits and hearing/vision care as well.

Difference Between Original Medicare and Medicare Advantage

Cost

You have to pay monthly premiums in original medicare. You also have to take care of deductibles and coinsurance. Coinsurance would be a small amount.  Part A deductible would be $1,288(each period) and part B deductible would be $166 (every year).

In case of Medicare Advantage, patients has to bear the cost of premium for both original medicare and advantage plan premium. Deductibles and co-payments are depends upon plan provider and it may vary.

Drug Coverage

Drug coverage does not come with Original Medicare by default. If you want drug coverage, you need to buy prescription drug coverage plan which is Medicare Part D. You can buy the prescription dug plan by paying small monthly premium.

Medicare advantage plan generally comes with drug coverage. Medicare advantage plan and prescription drug plan can’t go together.

Supplemental Coverage

Supplemental coverage is often required to cover the cost of deductibles and co payment which are not covered in Original Medicare. It is also known as Medigap. Medigap will cover your most of the out of pocket expenses. You can choose from 10 different plans available under medigap. Please contact the medigap provider in your area for plan details and quotes.

On the other hand if you want to buy supplemental coverage along with Medicare advantage plan, you are not allowed to do so. There are few medicare advantage plans which comes with $0 monthly premium, but their co-payment and cost sharing is relatively high. So please compare all the plans from different insurance companies before buying MA plan.

[stextbox id=”grey” ]You don’t need referral to see any doctor whether you are using original medicare or medicare advantage plan. Sometimes you need referral to see a specialist if you are using medicare advantage plan.[/stextbox]

Which One to Choose: Original Medicare vs Medicare Advantage

To conclude which one is better, it depends upon what you need. You should choose traditional medicare if you are concerned about cost. Furthermore, you have a broader network of doctors and you can go to any doctor any time that accepts traditional medicare. Choosing medicare advantage plan needs special attention as different plans may have different network of doctors and you may end up in the network which are of not much use to you.

Medicare advantage plan works for those who want drug coverage. Since Original Medicare doesn’t provide any drug coverage, its’s better to go with advantage plan.

[stextbox id=”info”]Please call Medicare 800 at 1-800-633-4227 for any help.[/stextbox]

Source

Medicare Part D Donut Hole

medicare part d donut hole 2017

Whenever we talk about Medicare, specially prescription drug plan, people asks questions like “What is donut hole in Medicare”. Answer is not complicated, but often not well explained. I will try to simplify medicare part d donut hole with some examples.

What is Medicare Part D Donut Hole

Medicare Part D Donut Hole is the gap in your medicare part d prescription drug plan coverage during which plan does not share the cost of the drug. During the coverage gap, you have to pay most of the cost of the drug out of the pocket. You will continue to pay the cost out of the pocket until you reach catastrophic coverage phase. The gap between the plans initial coverage and catastrophic coverage is called donut hole.

[stextbox id=”alert”]Most Medicare prescription drug plan or Part D of Medicare has a coverage gap.[/stextbox]

Read more about Medicare Part D cost and coverage here.

Medicare Donut Hole Example

You have to pay the maximum deductible for medicare part d before your prescription drug coverage provider starts paying for the drugs. Maximum deductible in 2016 is $360 for drug coverage. Once you and your plan provider have spent $3,310 (this amount changes every year) in 2016, you will enter the coverage gap (donut hole). From here you have to bear the maximum cost of the drug until you reach catastrophic coverage phase. Once you reach catastrophic coverage phase, your plan will again start sharing cost with you.

Medicare Donut Hole in 2016

Each year, the amount you have to pay once you reach coverage gap is different. Lets take an example and understand how donut hole works in 2016.

Mr. Kerry has already reached the coverage gap in 2016 in his Medicare drug plan. He wants brand-name drug and goes to pharmacy to fill a prescription which is covered in his plan. The drug cost is $70, and additional $2 for dispensing fee. Mr.  Kerry pays 45% of the plan’s cost for the drug and dispensing fee ($72 x .45 = $32.40). Mr Kerry will pay 58% of the drug cost if the drug is generic drug instead of brand-name drug.

medicare part d donut hole 2017

I will explain medicare part d donut hole in 2016 with another type of example when you just started using your plan in 2016.

Mrs. Moori pays full price of the drugs until she reaches the maximum deductible of the plan which is $360 in 2016. Remember that plan will only starts paying for the drug cost when you have met the yearly deductible. Mrs.

Mrs. Moori has to pay small co-payment for each drug which is covered in her plan. You will reach the coverage gap once the total cost of drug including what you pay as co-payment and what your coverage pays, reaches the $3,310 in 2016. Welcome home, Mrs. Moori is now in medicare part d donut hole.

Is Donut Hole Going Away?

Yes. You’re right, donut hole is going away by 2020. According to a blog in Medicare.com

By 2020, the coverage gap will be closed, meaning there will be no more “donut hole,” and you will only pay 25% of the costs of your drugs until you reach the yearly out-of-pocket spending limit.

This is really great news for seniors as donut hole makes a big hole in their pocket and makes the financial situation miserable.

Donut Hole Coverage Plans

After reading so much about donut hole and its drastic effects on finances, you must be thinking that is there any donut hole coverage plans? or is there any donut hole insurance? I have a good news for you.

 [stextbox id=”info”]Medicare Extra Help[/stextbox]

Medicare Extra Help for part d is a Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, like premiums, deductibles, and coinsurance.

You may be eligible for medicare extra help to cover the cost of medicare part D donut hole. Check out this website to find out your eligibility.

Please contact medicare 800 phone number on 1-800-MEDICARE (1-800-633-4227).

Medicare Supplemental Part G Coverage

medicare supplemental plan g cost coverage

Medicare Supplemental Part G is very popular plan among those who wants to cover out of the pocket cost occurred due to frequent doctors visit. If you have original medicare (Part A & Part B) and looking for plans to cover the costs which are not covered in original medicare, plan G can help you.

You can choose from the 10 standard plans available under Medicare Supplemental Plans (Medigap). Out of those 10 plans, medicare supplement plan G and Plan F are the most popular as they provide extensive coverage. Here I will talk more about Plan G.

You can read about Medicare Supplemental Plan F here.

Medicare Supplemental Part G

Medicare Supplemental plan G offers one of the most extensive coverage available. Medicare supplemental plan G offers variety of benefits like inpatient hospital coinsurance, skilled nursing care facilities coinsurance, part A deductible etc. With this plan, you may not have any out of the pocket cost for doctor’s or hospital visit.

medicare supplemental part g

Here you can see that Plan G offers one of the most complete coverage out of all the 10 plans in Medigap.

Part G Coverage

Medigap part G coverage is almost similar to what we have in plan F except it does not cover Medicare Part B deductible. It simply means medicare part B deductible which is covered in Plan F, must be paid out of the pocket. Part G covers Medicare Part A deductible, Part A hospital coinsurance, Part A hospice care. Part G also provide coverage to foreign travel medical emergency. You are also covered for first three pints of blood for a medical procedure.

 Benefits Plan G
Medicare Part A Coinsurance for Hospital Visits
Medicare Part B Coinsurance
First 3 pints of Blood
Hospice Care Coinsurance
Skilled Nursing Facility Care Coinsurance
Medicare Part A Deductible
Medicare Part B Deductible
Medicare Part B Excess Charges
Foreign Travel Medical Emergency

 

Please note that as shown in table above, Medicare Supplemental Part G does not cover Medicare Part B deductible. While Plan F covers part B deductible as well, perhaps that is the only difference between plan G and F.

 

[stextbox id=”info” mode=”css”]Plan B Excess charges are the difference in cost between what a doctor or health provider charges for a medical service and the Medicare-approved amount. The beneficiary is usually responsible for paying this difference out-of-pocket[/stextbox]

Medicare Supplemental Part G Cost

Part G cost may vary depend upon the states where you live. As per Medicare law, coverage is standard across all states, but premium of part G depends upon insurance companies. Most of the insurance companies charge different premiums for the same coverage in different states.

Contact Medicare

To check your eligibility, you can contact the Medicare plan directly pr you can call 1-800-MEDICARE (1-800-633-4227), TTY users 1-877-486-2048; 24 hours a day, 7 days a week.

You can also visit medicare website to check medigap plans in your area.

 

Medicare Supplemental Plan F

medicare supplemental plan f

Medicare Supplemental Plan is generally one of the most expensive plans out of all the Medigap plans available. Plan F is also very popular as it offers comprehensive coverage option. If you want a plan which pays your out of pocket bills, Medicare Supplemental Plan F is here to help you.

Cost of Medicare Supplemental Plan F

Medicare Supplemental Plan F has two variants, standard plan and additional high deductible plan. Standard plan has higher premiums as compare to additional high deductible plan as standard plan. Additional high deductible is cheaper but it comes with $2,180 deductible which means you have to pay first $2,180 before your plan starts paying for medicare expenses.

[stextbox id=”info”]Don’t get confused with standard plan and high deductible plan in terms of coverage. Both the plan provide exact same coverage but have different premium.[/stextbox]

If you are visiting doctors regularly and facing a problem of high deductible, plan F can definitely help you. Most of the insurance providers have plan F, so compare the different plans offered by them and decide.

Medicare Supplemental Plan F Coverage

Plan F coverage is more or less same in every state. Most of the insurance companies who offer plan F have exact same coverage no matter which state you live in.

Medicare Supplemental Plan F

 

 

Here is the list of basic coverage included in most of the Plan F.

  • Medicare Part A deductible
  • Medicare Plan A coinsurance
  • Medicare Part B coinsurance
  • 100 % of Medicare Part B excess charges
  • Medicare Part B deductible
  • 100 percent coverage for the first three pints of blood (this is not covered by Medicare)
  • Foreign travel medical emergency help
  • Skilled nursing facility care

[stextbox id=”info” mode=”css”]Plan B Excess charges are the difference in cost between what a doctor or health provider charges for a medical service and the Medicare-approved amount. The beneficiary is usually responsible for paying this difference out-of-pocket[/stextbox].

To know more about supplemental plan, visit my other post here.

Contact Medicare

To check your eligibility, you can contact the Medicare plan directly pr you can call 1-800-MEDICARE (1-800-633-4227), TTY users 1-877-486-2048; 24 hours a day, 7 days a week.

You can also visit medicare website to check medigap plans in your area.

 

Medicare Part B: Everything You Need to Know

Medicare Part B Coverage

 What is Medicare Part B

If you are looking for a plan which covers services like lab tests and supplies like wheelchair, you need  to sigh up for Medicare Part B. Medicare Part B covers cost of some services and products which are not covered by Part A.

Medicare Part B Coverage

Medicare part B comes under Original Medicare and used to pay for services, supplies and products which is required to treat a particular health condition or disease. Services includes lab tests and supplies includes walkers and wheelchairs etc. It also covers doctors visit and surgeries.

Medicare Part B Cost

Medicare Part B Premium

The standard Medicare Part B premium is $104.90 per month. However it may go up depending upon your situation. If you are enrolling in Part B for the first time, your premium will start from $121.80 per month.

There are few factors which affects the premium.

  1. If you were never enrolled in Part B
  2. You don’t have Social Security benefits.
  3. You have both Medicare and Medicaid (Dual Eligible).
  4. Your income is higher than certain limit.

Table below is summarized to show monthly premiums in 2016 based on your income. Data taken from Medicare Website.

Medicare Part B Premiums in 2016 (Per Month) You pay each month (in 2016)
File individual tax return File joint tax return File married & separate tax return
$85,000 or less $170,000 or less $85,000 or less $121.80
above $85,000 up to $107,000 above $170,000 up to $214,000 Not applicable $170.50
above $107,000 up to $160,000 above $214,000 up to $320,000 Not applicable $243.60
above $160,000 up to $214,000 above $320,000 up to $428,000 above $85,000 and up to $129,000 $316.70
above $214,000 above $428,000 above $129,000 $389.80

Medicare Part B Deductible

Like any other plans, you have to pay certain deductibles before Part B kicks in. You have to pay $166/year as deductible before Medicare starts paying for the cost incurred. One more thing to remember is that deductible is not the only thing you have to pay. Once deductible is met, you’re responsible for 20% (coinsurance) of amount approved by Medicare for the services, supplies and doctor’s visit.

Medicare Part B Coverage

Part B covers many essentials things like ambulance cost (to or from hospital), doctor prescribed durable medical equipment for example blood sugar test strips or blood sugar monitor. It also covers lab tests and doctor’s visits and supplies like wheelchair and walkers.

[stextbox id=”alert”]Talk to your health care provider about your need and then make sure Medicare covers your need like certain services or supplies.[/stextbox]

In case of any doubt or you need clarification, please visit this website.

Medicare Part B Enrollment

Signing up for Medicare part B is really easy and there are multiple ways to do that. You can apply for Medicare through Social Security, either in person at a local Social Security office, through the Social Security website, or by calling 1-800-772-1213 (TTY users 1-800-325-0778) from 7AM to 7PM, Monday through Friday.

How to choose Medicare Supplement Insurance Plan

choose medicare supplemental plans medigap

How to choose Medicare Supplement Insurance Plan

We need medicare supplement insurance plan because having just Medicare will not cover the entire cost of your health care expenses. Before you plan to choose medicare supplement insurance plan, lets not forget that you have to have the “Original Medicare” plan. Remember that Medigap only cover the out-of-pocket costs under Medicare Part A (hospital insurance) and Medicare Part B(medical insurance), but it will not cover the out-of-pocket cost of Medicare Part C (Medicare Advantage plans), Medicare Part D (Prescription Drug Plans), or any other private health insurance, Medicaid.

choose Medicare Supplement Insurance Plan

 

Lets discuss step by step how you can choose Medicare Supplement Insurance Plan which is also known as Medigap.

 [stextbox id=”alert”]

Decide If you want Original Medicare or Medicare Advantage Plan[/stextbox]

You have to decide upfront whether you are sure about opting for Medigap. Because you can only enroll in Medigap if you have Original Medicare means you have Part A (Hospital Insurance) and Part B (Medical Insurance).

If you don’t have Original Medicare and instead you signed up for Medicare Advantage Plan which is also called as Part-C, then you are not eligible for Medigap.

Lets look at below table and plan according to your priorities.

Step A Step B
You can choose Original Medicare You can choose  Medicare Advantage Plan
Part A (Hospital Insurance) and Part B (Medical Insurance). “Part C” – includes both Part A (Hospital Insurance) and Part B (Medical Insurance)
Covered by Medicare Covered by Private Insurance Companies
You can join Medicare Prescription Drug Plan Drug plan is generally offered by plan.
You can choose to buy a Medigap policy from a private company Not Eligible for Medigap

 

if you choose step A from above table, congrats you are now eligible for Medigap (medicare supplement insurance). Now its time to decide which plan works for you best.

Choosing a Medigap Policy

Before deciding on best medigap policy, you should know your present and future health care demands. It is essential because once you buy the plan, you may not be able to change it later on.

There are Medigap plans from A to N. know about all the plans and compare based on your needs and pick one which suits you best. To know more about details of various medigap plans from A to N please click here.

Please visit the website to know more about which Medigap plans are available in your state.

Medicare Part D Enrollment, Cost, Coverage

Medicare Part D Explained

Want to sign up for Medicare part d prescription drug plan? First have a look at what it is and how it works. It will help you to make decision wisely and save money as well.

Medicare Prescription Drug Plan

The Medicare prescription drug benefit also known as Medicare Part D. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) established a voluntary outpatient prescription drug benefit for people on Medicare, known as Part D. Anybody who has either Medicare part A or part B is entitled for part D.

The drug benefit, which took effect in January 2006, helps cover costs of prescription drugs and is available to all Medicare beneficiaries who enroll in private plans approved by Medicare to offer coverage.

Enrollees in Medicare drug plans pay a monthly premium to the plan.

The drug benefit is offered through two types of private plans:

  • Stand-along prescription drug plans (PDPs)
  • Medicare Advantage Prescription Drug (MA-PD) plans such as HMOs or PPOs.

The benefit includes additional assistance with plan premiums and cost-sharing amounts for low-income beneficiaries. Medicare replaced Medicaid as the primary source of drug coverage for low-income and disabled people with both Medicare and Medicaid (dual eligible).

Am I Eligible for Medicare Part D?

Anybody who is eligible or already on Medicaid is eligible for Part-D. Joining Medicare drug coverage (Medicare Part D) is completely voluntary. However If you do not have any drug coverage plan, better sign up as soon as possible because delay in joining the could increase your premium.

 

medicare part d prescription drug plan

 

If you have better drug coverage plan ( enrolled through current employer ), you don’t have to join Medicare Part D. But if you are still carrying mediocre drug coverage plan, consider joining Medicare drug coverage. Delay in joining will cost you a late penalty that adds to your premiums for as long as you’re in the program, except in certain circumstances, and you’ll be able to enroll only during open enrollment at the end of the year.

Medicare Part D Donut Hole

Do you know that there is a “Donut Hole” in part d prescription drug plan. Many people don’t realize that there may be coverage gap of what prescription drug plan offers and what you have to pay out of pocket. this gap in coverage is called donut hole.

Once you have reached your drug plan coverage limits, you may have to pay all cost of the drug out of the pocket until you reach catastrophic-coverage threshold. After reaching catastrophic-coverage threshold, you will again starts paying small co-payment for the drugs.

Cost of Medicare Part D Premium

After enrolling in the drug coverage plan by Medicare, you have to pay monthly premium and  the annual deductible before coverage starts paying. Monthly premiums are not fixed and may vary by plan (higher-income consumers may pay more). Check out the link to get exact idea of premium.

 

According to Medicare.com,

No Medicare drug plan may have a deductible more than $360 in 2016. Some Medicare drug plans don’t have a deductible.

Also

Average basic premium for a Medicare Part D prescription drug plan in 2017 is projected to remain relatively stable at an estimated $34 per month

So maximum deductible in 2016 is $360 and it would be no more than $408 for 2017.

 

How Much Does Medicare Part D Cost

There are many insurance companies who offers Medicare Prescription Drug Plans. Here is a list of some of the best prescription drug plan providers like AARP and Humana.

For AARP part D cost provided by United Healthcare Click Here.

For Humana Part D Plans, Click Here

For Cigna Part D Plans, Click Here

Part D Premiums by Income

Here is a table published by Medicare for 2016. You can estimate your premium bases on table as its gonna stay the same for 2017 as well. I will update the table based on new inputs from Medicare.

If your filing status and yearly income in 2014 was
File individual tax return File joint tax return File married & separate tax return You pay (in 2016)
Less than $85,000  $170,000 or less  $85,000 or less  Your Plan Premium
above $85,000 up to $107,000 above $170,000 up to $214,000 not applicable $12.70 + your plan premium
above $107,000 up to $160,000 above $214,000 up to $320,000 not applicable $32.80 + your plan premium
above $160,000 up to $214,000 above $320,000 up to $428,000 above $85,000 up to $129,000 $52.80 + your plan premium
above $214,000 above $428,000 above $129,000 $72.90 + your plan premium

 

Medicare Supplement Insurance Plan

medicare supplement insurance plan

What is Medicare Supplement Insurance Plan

Many people are concerned about the gap between what Medicare pays and what you have to pay out of pocket. Here comes the Medicare Supplement Insurance Plan. A Medicare Supplement Insurance Plan which is also called as Medigap are sold by private companies. In general, Medigap covers those parts of insurance costs which are not covered by Medicare for example deductibles and copay. It helps to protect you against unexpected out-of-pocket costs.

 

Medicare Supplement Insurance Plan

How to compare Medigap policies

There are many Medigap policies available and they all are different. Although they are different, they must adhere to the federal and state laws. The Medigap policy you purchase must also be clearly identified as “Medicare Supplement Insurance.”

There are few Medigap policies which provides coverage which are not covered in Medicare. Medical coverage while travelling outside of United States in one of the example of coverage of Medigap. Please check with your insurance provider  whether coverage outside US is covered or not.

 [stextbox id=”info”]When Can You Apply for Supplemental Medicare?[/stextbox]

The best time to buy a Medicare Supplement policy is during your Open Enrollment Period. This period lasts for 6 months and begins on the first day of the month in which you’re both 65 or older and enrolled in Medicare Part B. Some states have additional Open Enrollment Periods. You can apply for a Medicare Supplement policy throughout the year. Unlike Original Medicare and Medicare Advantage Plans which have a designated enrollment period each year, Medicare Supplement Insurance can be purchased at any time.

For more information about Medigap policy in your area, visit this website.

 [stextbox id=”info”]Medicare Supplemental Insurance Plans Comparison[/stextbox]

It is a difficult task to compare the medicare supplemental insurance plans. However Medicare has done this tadious task already so you dont have to do anything. Just closely look at the below table and do your math. Decide want you want and pick one plan which suits you most. Credit goes to Medicare for coming up with the table.

Medigap Benefits Medigap Plans
A B C D F* G K L M N
Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Part B coinsurance or copayment Yes Yes Yes Yes Yes Yes 50% 75% Yes Yes***
Blood (first 3 pints) Yes Yes Yes Yes Yes Yes 50% 75% Yes Yes
Part A hospice care coinsurance or copayment Yes Yes Yes Yes Yes Yes 50% 75% Yes Yes
Skilled nursing facility care coinsurance No No Yes Yes Yes Yes 50% 75% Yes Yes
Part A deductible No Yes Yes Yes Yes Yes 50% 75% 50% Yes
Part B deductible No No Yes No Yes No No No No No
Part B excess charge No No No No Yes Yes No No No No
Foreign travel exchange (up to plan limits) No No 80% 80% 80% 80% No No 80% 80%
Out-of-pocket limit** N/A N/A N/A N/A N/A N/A  $4,960  $2,480 N/A N/A