MEDICARE INSURANCE PLANS
Original Medicare (Parts A&B) is a starting point, but leaves some significant gaps in coverage including a large in-patient hospital deductible and an uncapped 20% co-insurance for most medical services. Additionally, there is no prescription coverage with Original Medicare.
Most people will choose to add on either a Medicare Supplement Insurance Plan and a Part D Prescription Plan OR a Medicare Advantage Plan to Original Medicare.
Medicare Supplement Insurance Plans
Medicare Supplement Insurance Plans are offered through private companies and will pay AFTER Original Medicare pays. For example, Original Medicare will pay 80% on most medical services and the Supplement Plan will cover the other 20%. Depending on the Supplement Plan Letter you choose (Plan G, Plan N, etc)... you may be responsible for a small Part B Deductible and other minimal copays.
This setup provides for a very budgeted amount out of pocket each month that doesn’t vary based on medical care needed and plans don’t change from year to year. The price you pay for the Medicare Supplement Plan is based on age, gender and ZIP code and most will see annual price increases.
You can see any provider in the Nation that accepts Medicare assignment because they only need to bill Medicare and then Medicare sends the remainder of the bill to the Supplement Company.
You have a 6-month window when new to Medicare Part B that you can enroll into a Medicare Supplement Plan with no underwriting or health questions. After that 6-month window, in most scenarios you would need to go through underwriting to enroll in or change your Supplement Plan and that might not be an option depending on your medical history.
Medicare Prescription Drug Plans (Part D)
If you choose a Medicare Supplement Insurance Plan or another type of plan that does not include Prescription coverage, you can add on a stand-alone Part D Prescription Plan (sometimes called “PDPs”) through a private company. Even if you are not taking any prescriptions, you will want a creditable Part D placeholder so that you do not start accumulating a penalty.
Each Medicare Prescription Drug Plan has its own list of covered drugs (called a formulary) placing drugs into different "tiers" on their formularies. Generally the higher the tier, the higher the cost.
You will pay a monthly premium to the company that you enroll with for your Part D plan, as well as copays at the pharmacy for the prescriptions you fill.
Each year from Oct 15 to Dec 7 during the Medicare Annual Enrollment Period, you can easily change your Part D Prescription Plan with no health questions asked.
Medicare Advantage Plans (Part C)
Medicare Advantage Plans, sometimes called "Part C" are an “all in one” alternative to Original Medicare. They are offered by private companies that hold contracts with Medicare. Most Advantage Plans are PPO or HMO plans with costs based on a network of participating doctors and hospitals. It is possible to have a $0 premium Medicare Advantage Plan and just pay copays or coinsurance as you use services.
Instead of Original Medicare paying first, all claims will run only through the Medicare Advantage Plan. You need to have active Medicare Parts A&B to be allowed to enroll in a Medicare Advantage Plan and still pay your Part B premium, but you will never show your red/white/blue card. For most services you will be responsible for a copay or coinsurance based on the medical care you need and the Medicare Advantage Plan will be responsible for the rest of the bill.
Many Medicare Advantage Plans include Part D Prescription coverage so you don’t need to add on a stand-alone plan like with a Medicare Supplement Plan. Many also include additional benefits like dental, vision and hearing aid benefits, gym memberships, transportation, over the counter allowances, etc that Original Medicare does not offer. Some may even include a “Part B Giveback” to help pay for the cost of Medicare Part B.