How to Know Which Medicare Plan is Right For You
Article contributed by Jillian Day
Finding the right healthcare coverage for seniors can be overwhelming, and it shouldn’t require an expert to decipher the different plans available and how to sign up for them. Medicare is a federal health insurance program for people who are 65 and older or younger people with disabilities. The program is broken up into four parts (Part A, B, C, and D) with an additional plan, Medigap, to help cover any “gaps” in Medicare coverage. Read on for more information to help you make better sense of this confusing but necessary benefit.
Clearing Up Confusion
Health insurance can be tricky to understand. With a complex system like Medicare, sometimes you need a little help getting around. This Medicare resource can make things easier to understand by defining and explaining the terms. For the uninitiated, understanding Parts A to D and Medigap can seem like decoding a cipher. To better understand the services covered under each plan, here’s a deeper look.
Part A is generally regarded as hospital insurance because it covers inpatient hospital stays, skilled nursing home care, hospice care, and home care. For most people, Part A does not have a monthly premium if you or your spouse have paid Medicare taxes through the years, although it does have copays, coinsurance, and a deductible.
Part B is regarded as medical insurance because it covers most common medical services that are necessary to treat and prevent health conditions. Part B does have monthly premiums, which most people will have to pay, with the standard Part B premium in 2019 set at $135.50. However, you might be subject to an Income Related Monthly Adjustment Amount (IRMAA) that will determine your monthly premium. The IRMAA is based on what you reported on your 2017 tax return.
Part C is also known as Medicare Advantage Plan, which works like an HMO or PPO and is offered by private companies approved by Medicare. One of the benefits of Part C is that it may offer additional coverage not offered under Parts A or B, such as vision, hearing, and dental. In some cases, it might even be cheaper than paying for Parts A, B, and D separately. However, while Medicare does pay a fixed amount for your care every month, companies offering Part C can charge different out-of-pocket costs, and those costs can change annually.
For seniors who need coverage for prescription drugs, you can choose from two plans: either through Part C under a plan that offers drug coverage, or through Part D. Under Part D, you will pay a premium and deductible throughout the year. In order to qualify, you will have to sign up for benefits under Part A and/or Part B. Part D is only provided through private insurance companies that are contracted through the federal government, and you will have to choose and enroll in a private Medicare prescription drug plan (PDP).
Medicare Supplement Insurance
In addition to traditional Medicare Plans A to D, there is an add-on healthcare plan that seniors can opt for when deciding on their coverage — Medigap. Also known as Medicare Supplement Insurance, Medigap is a policy sold through private companies to help pay costs that Original Medicare does not cover. Medigap policies help cover the costs of seeing a doctor or facility not under your Medicare plan; however, despite being privatized, this coverage will not cover any costs if your doctor or facility is outside of your Medicare coverage.
As a senior, you have many options for your healthcare coverage. Your decision should be based on what your needs are, how often you need to see a doctor, and whether you require medication. Once you understand your needs, compare the cost of Original Medicare and Part D to a complete package in a Part C plan from a private insurance company. There’s a plan that works for you, it will just take some digging and homework to find it.