Medicare is a vital service for seniors in this country, but one of the most common complaints is how hard it can be to understand. There are various parts and types of plans. Many plans have similar-sounding names and unclear distinctions. In order to help you make the best decision for your healthcare, we have summarized the answers to some of the most common questions about Medicare.
What Is The Difference Between Original Medicare And Medicare Advantage?
Original Medicare is made up of what is known as Part A (Hospital Coverage) and Part B (Medical Coverage). Most people are automatically enrolled in Part A and Part B when they turn 65. This is the most basic level of Medicare. Though I can be very useful, it doesn’t cover much.
One of the biggest gaps in coverage is for prescription drugs. However, you can enroll in Part D for prescription drug coverage. You can either add Part D to your Original Medicare Coverage or as part of a Medicare Advantage plan.
A Medicare Advantage plan is purchased from a private insurer, such as Aetna. The service is approved by Medicare, and you still pay your Part B premium, but it is much closer to private health insurance. Medicare Advantage tends to offer more complete coverage, including things like dental and vision as well as more prescription coverage.
What Is Medigap?
Medigap, also known as Medicare supplemental insurance, is a type of policy you can take out to supplement your Original Medicare. Simply put, you are insured against large deductibles. This has the potential to save you hundreds of thousands of dollars if you have any sort of medical emergency or long-term illness.
To make things more needlessly confusing, Medicare Supplement plans are denoted by the letters A through N (except for E, H, I, and J, which no longer exist.)
How Much Do I Have To Pay For Medicare?
The Medicare pricing structure is a bit complicated and confusing, but the basics of it are:
Part A (Hospital Coverage) is free for anyone who has paid 10 years into the system throughout their careers (or whose spouse has done so.)
Part B (Medical Coverage) costs $135.50 a month, more for high earners
Part D (Drug Coverage) costs depend on the insurer, but the 2018 average was $34 a month, with a maximum deductible (the money you pay out of pocket) of $405. If you get Part D as part of a Medicare Advantage plan, it’s included in the overall cost of your plan.
Part C (Medicare Advantage) costs vary widely and are paid in addition to the Part B premium. Think Advisor has a handy list of average plan costs by state.
The average cost for Part F, the most popular Medigap policy, is $1,813 a year.
Can I Change My Mind?
Yes, you can! There is an annual Open Enrollment period for Medicare Advantage in which you can make any changes you’d like to your coverage. This includes going back to Original Medicare and switching to a new Medicare Advantage plan.
You should be careful if your plan is to switch to Original Medicare plus Medigap, as you may not be accepted for the Medigap plan. Joining a Medigap policy after the initial one-time enrollment window requires underwriting, so you will have to pass a series of health questions. Check that you can pass these before leaving a Medicare Advantage plan.
As of 2018, you also get a three-month trial period after open enrollment in which you can make changes to your chosen coverage. This gives you a lot more freedom and flexibility and means you can test out the service before sticking with it.
This is not a comprehensive guide, but it does provide an overview of the basics. If you need more guidance, there are many online resources dedicated entirely to helping people navigate Medicare. Make sure to do thorough research and don’t get discouraged by complicated insurance jargon. The internet is there to help you figure it out.