Medicare coverage options available to you have become more confusing in recent years due to the introduction of Medicare Advantage Plans and the Part D Prescription Drug Plans.
There are basically two ways to approach your health care within the Medicare system:
- Original Medicare and a Medicare supplement plan: This is the tried and true method used by most people. All claims are processed through Medicare first and are then transferred to your Medicare supplement plan (sometimes called a Medigap insurance plan). One of the comprehensive Medicare supplement plans, such as a Plan C or Plan F, pays the 20% that Medicare does not cover as well as the Part A (hospital) and Part B (medical) deductibles.
- Medicare Advantage Private Fee for Service (PFFS) plans: This is the Part C of Medicare. Although there are some variations in plans, essentially all of your claims go to a private insurance company rather than to Medicare. The Medicare Advantage plan pays your provider benefits according to their benefit schedule. The insured could have some co-pays, deductibles and out-of-pocket costs with these plans.
Although these plans must comply with minimum coverage standards established by Medicare, many plans provide better than the minimum standards and even provide some additional benefits such as dental, vision or hearing. A lot of people have been attracted to Medicare Advantage plans by the extreme low cost.
Which plan is better for me? Medicare supplement or Medicare Advantage?
The answer is different for each person. Your choice is dependent upon your health situation from year to year. The attraction of a Medicare Advantage Private-Fee-for Service plan is the low cost. In those years where you have excellent health with no doctor or hospital visits, you naturally come out better with a plan with lower costs. On the flip side, if you experience a year of bad health with many medical expenses, you may be better off with a traditional Medicare supplement plan. In other words, the Medicare supplement plan premium may cost you less by the time you consider your out-of-pocket expenses.
Do all physicians accept Medicare?
Most do, but not all. Physicians that accept Medicare may not accept new patients, so it is wise to check with your doctor before scheduling an appointment. Physicians that accept traditional Medicare may not necessarily accept a Medicare Advantage plan. It is important to make sure that the doctors office is aware of the type of plan and insurer that you have.
Do I have to pass medical underwriting for a Medicare supplement plan?
If you purchase a plan within 6 months of turning age 65, or your Part B effective date, your acceptance is guaranteed. Otherwise, you will have to answer a few simple underwriting questions. Minor health problems will generally not prevent you from getting a supplement plan.
Can I change supplement plans at any time?
Yes. Changing your Medicare supplement or Medigap insurance plans is not restricted to annual enrollment periods like Medicare Advantage and Part D plans.
Can my rates be raised in Medicare supplement or my plan be cancelled?
Rates can change just as regular health insurance rates change. It is important to find an insurance company that will not single you out for a rate increase or cancellation. Most reputable companies only raise rates on an entire class of insureds at the same time. Although some companies advertise that their prices do not increase with age, our experience shows that the rate increases these companies pass along based on claim experience tend to be about the same as the ones that increase based on attained age.
Will my supplement plan pay for a medical expense that Medicare does not approve?
This is a common misconception. Your supplement plan pays only when Medicare approves an expense. Remember, Medicare has deductibles and only pays 80%. A good Medicare supplement plan will pay the deductibles and 20% for you. Most medically necessary expenses are approved by Medicare; however, some preventative services, such as dental check-ups, eye exams and hearing exams, may not be covered by Medicare. TIP! Beware of a medical provider that is not sure whether their services are covered by Medicare. That is a warning sign that the service is not covered.
What is the difference between Parts A, B, C and D of Medicare?
The letter designations make it confusing, especially since the standardized Medicare supplement plans also use the letter designations A-J to identify those plans. Here are the meanings of the parts of Medicare.
- Part A: Hospital charges
- Part B: Medical and doctor charges
- Part C: Medicare Advantage
- Part D: Prescription drugs
Do I still have to pay for the Medicare Part B premium if I choose Medicare advantage?
Yes, you’re still in the Medicare system while on Medicare Advantage and you must pay the premium.
Is a Medicare supplement plan (Plan F, for example) the same from insurance company to insurance company?
Yes, as far as the benefits go, they’re identical. Medicare standardized the plans to make it easier to shop and compare plans. Although the benefits are the same, the premiums and service are not. With this in mind, we can help you find a reputable insurer that offers the plan you want at the lowest possible price.
Can health conditions prevent me from getting a Medicare Advantage or Prescription Drug Plan (PDP)?
No, there is no health underwriting for these plans.
When can I get a Medicare Advantage or Part D plan?
You can purchase these plans within 3 months of turning age 65, or your Medicare Part B effective date. Otherwise, you will have to wait until the open enrollment period which runs from October 15th through December 7th of each year.