What You Need to Know
When you are about to turn 65 it’s not easy to know your best options. It is always best to get the help of an unbiased professional who can guide you through the process of getting the best coverage. You still need a little background knowledge for a jumping off point. Here are some terms to help you understand Medicare so you can do what is right for you.
When anyone says Original Medicare they are talking about Medicare without supplements, as issued from the government. Original Medicare has two parts. Part A and Part B.
Medicare Part A covers hospital, hospice, and skills nursing facility coverage. Whenever you are admitted to a facility, Medicare Part A is covering your stay.
Medicare Part B covers your outpatient care like doctor visits, outpatient labs and tests. Part B also covers durable medical equipment like walkers, knee and neck braces, and wheelchairs.
Original Medicare is often referred to as an 80/20 plan, meaning that in your usual outpatient visits you can expect to pay for 20% of your costs. Also, there is a major deductible for hospital stays. If you need a blood transfusion Medicare will not pay for the first three pints. Also Original Medicare does not cover prescription drugs. There is no cap on how much you can spend on copays, deductibles, and extra charges. For that reason people look for ways to protect themselves from spending more than necessary on their health care.
Most people opt for either a Medicare Advantage Plan or a Medicare Supplement Plan
Medicare Advantage Plans
Medicare Advantage Plans, often referred to as Part C, are structured like HMO or PPO plans but with all the protections of Medicare in place. Medicare Advantage plans, unlike Original Medicare cap the maximum amount of money you are liable to pay in high usage years. In a year when you get $100,000,000 dollars of coverage your maximum out of pocket cost could be as low as $3,400.
Medicare Advantage plans offer the benefits and coverage of Medicare Parts A and B as well as prescription drug coverage. Think of Part C as a combo plan. They combine the benefits of Part A and Part B often adding extra benefits that Original Medicare does not offer such as:
- Dental Coverage
- Vision Transportation
- Hearing Aid Coverage
- Chiropractic Care
- Free Gym Memberships
- Free Over the Counter Medicines, Supplements and Sundries
Medicare Supplement Plans
Medicare Supplement Plans, often referred to as Medigap Plans cover all or part of the 20% that Medicare does not cover. You will see Medicare Supplement / Medigap Plans with names like Plan F, Plan G, or Plan N. Whenever you see the word ‘Plan’ ahead of letter you can be sure it is referring to a Medicare Supplement. When you hear the word ‘Part’ ahead of a letter of the alphabet we are referring to Original Medicare, like Part A and Part B.
Prescription Drug Plans
Prescription Drug Plans, referred to as Part D, cover your prescription drugs. Medicare has not covered prescription drugs since 2006 so every Medicare beneficiary must either join a Medicare Advantage plan that covers prescriptions or purchase a standalone prescription drug plan.