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Learning the ABCs (and Ds) of Medicare
Along with aging comes many joys and many headaches. Understanding Medicare is no exception. When it comes time to figure out what kind of insurance coverage you need and how Medicare works, you will need to brace yourself for a new learning experience. This article will give you a basic overview of Medicare, Medigap, and Medicare Advantage, and will tell you what criteria to consider in deciding what’s best for you.
Medicare has baseline requirements for qualification, which include:
Being 65 years or older; or
Under 65 years with certain disabilities; or
Diagnosed with End-Stage Renal Disease, which is permanent kidney failure that requires dialysis or a transplant.
Before you begin trying to understand all of Medicare and how it applies to you, visit Medicare.org, which can provide you with an overview of the system, as well as definitions and explanations of common Medicare terms.
Understanding Medicare: Parts A, B and D
Medicare is comprised of four parts: Part A, Part B, Part C, and Part D.
The basic Medicare package contains Part A and Part B. Part A is the hospital coverage, which covers inpatient care facilities, such as hospitals, skilled nursing facilities, hospice care, and limited home healthcare. Most Medicare Part A recipients do not have a premium, but those who worked less than 10 years will have a premium that will range between $240 and $437 (in 2019). Part B is medical coverage, for things like doctors’ visits, outpatient care, services, supplies, and preventative care, with a premium based on income.
Part D is voluntary prescription coverage and is an addition to your Part A and B coverages, Medical Savings Account plans, some Medicare Cost plans, some Medicare Private-Fee-for-Service plans. Prescription plans vary; each plan has a premium and an annual deductible that is capped each year.
For those pesky copayments, coinsurance and deductibles that are tacked on to Parts A and B, you can get Medicare Supplemental Insurance (Medigap). Beware, these plans do not cover everything, so read the fine print and ask questions.
Part C (Medicare Advantage Plan)
Part C, or Medicare Advantage plans, provide Medicare coverage through private health insurance companies that are government-approved. Medicare Advantage covers all of what Parts A and B have to offer, while also including things like wellness programs, hearing and vision services, dental services, and prescription drugs. Essentially, Medicare Advantage (Part C) = Part A + Part B + Typically Part D + Other Benefits. To be able to join a Part C plan, you must be enrolled in Part A and B, you will continue to pay Part B premiums, and you will pay an additional premium.
While shopping around for a Medicare Advantage plan that suits your needs, you will need to first determine which type of plan you need:
Health Maintenance Plans (HMOs) are the most restrictive. HMOs require you to be seen by doctors in-network and require referrals for specialists. If you do not need a broad range of options and your current providers are in-network, the HMO plan will prove to be the most cost-effective.
Preferred Provider Organizations (PPOs), at a higher rate, allow you to pick providers in network, but also — at a higher rate — allow for out-of-network options.
HMO Point of Service (HMO POS) is like a PPO but with higher out-of-network costs.
Private Fee-for-Service Plans (PPFs) have more flexibility but not all providers accept this plan.
Special Needs Plans (SNPs) are tailored for people with special health needs.
Medical Savings Accounts (MSAs) are linked to a bank account, and you can use the money deposited into the account by the plan for health-related expenses.
If you are about to qualify for Medicare, then now is the time to familiarize yourself with the organizational system. While Parts A, B, C, and D, Medigap, and all the options within each plan are convoluted, as you start to peel back the onion you will be able to rule out options that do not meet your needs and/or budget. Once you find what you need, then the task turns into enrolling, which will feel like a walk in the park after having figured out what plans to choose.