It’s been said that health has more of an impact on our happiness than anything else. Some say financial contentment follows close behind, which makes the beginning of the year a perfect time to look at how we can improve our financial well-being.
Do you know the ABCDs of Medicare? The basic components are: Part A = Hospital coverage; Part B = Medical Insurance (for non-hospital health care coverage); Part C = Advantage Plans; and Part D = Drug coverage. There are two main paths to get Medicare, “Original Medicare” or “Medicare Advantage.” You need to be enrolled in Medicare Parts A & B for either path.
Original Medicare’s Parts A & B generally cover 80% of the costs incurred. To fill the 20% gap, you purchase a Medicare Supplement Plan (“Medigap”) and a Part D prescription plan. Most of your care will be covered if you use providers who accept Medicare. If you use non- Medicare accepting providers, you will be responsible for any charge beyond what Medicare approves. You will pay for Part B, for the Supplemental, and for Part D. You may pay a small deductible and you will have drug co-pays.
Advantage Plans (Part C) are offered by insurance companies with a contractual agreement with Medicare to provide most of your Part A & B coverage. Medicare pays the insurer per enrollee. Advantage plans cover specific service areas and you have to live in that area and use service providers who accept the plan. Advantage plans may offer no or low-cost monthly premiums and often include Part D prescription coverage and may offer other incentives, but there are co-pays and annual out-of-pocket limits which can be substantial.
Medicare is complicated.
Both paths to coverage have pros and cons. The above only shows basic differences between Original Medicare and Medicare Advantage Plans. One item to note is, if you decide to switch to Original Medicare after your 12-month trial period in an Advantage plan, you may lose your guaranteed coverage for a Medicare Supplement plan, which means you may need to undergo medical screening to determine your eligibility.
The “Medicare & You 2022” booklet explains the coverage types, rules, options, etc. If you didn’t receive the booklet by mail, go to medicare.gov/pub/medicare-you-handbook. Free personalized counseling from your State Health Insurance Assistance Program (SHIP) is available in every state. In Kansas, call SHICK at 1-800- 860-5260 or in Missouri, call CLAIM at 1-800-390-3330.
Don’t wait until the last minute to educate yourself or to enroll!
Medicare’s 2021 Annual Open Enrollment is Oct 15th to December 7th. When you know what path might work best for you, discuss your options with a trusted insurance agent or broker to enroll in what appears to be the best choice for you.