Medicare is health insurance for Americans who are 65-years-old and over, those with certain disabilities, and anyone with permanent kidney failure who requires dialysis or a kidney transplant. Although Medicare is a helpful benefit to American seniors, its forms and options can also seem complex and unclear to retirees enrolling in Medicare for the first time.
Medicare has four parts:
- Part A: Helps cover hospitalization, including inpatient care, nursing facility care, hospice care, and home-health care.
- Part B: Helps cover services from doctors and other health care providers, outpatient care, home-health care, medical equipment, and some preventative services.
- Part C: (Also known as Medicare Advantage) includes all benefits and services from Parts A and B, usually adds Medicare prescription drug coverage, sometimes adds extra benefits and services for an additional cost, and is run by a Medicare-approved private insurance company.
- Part D: Covers prescription drugs.
1. Medicare Advantage
Traditional Medicare has a standard benefit package that covers only medically necessary procedures with a set fee structure, it does not always allow the flexibility many individuals and families need. That’s where Medicare Advantage comes in.
Private companies manage all Medicare Advantage plans. Although you still have Medicare, your coverage will be from the Medicare Advantage plan. The plan has flexibility about referrals, health care providers used, and other practices. Plans typically include prescription drug coverage (Medicare Part D), although some do not. Medicare Advantage plans can significantly reduce the annual out-of-pocket costs to enrollees as well as expand benefit packages (maybe we could connect a link here to more info on those benefits) to cover services not included with standard Medicare.
Because the point of Medicare Advantage is to provide participants greater customization of their health care options, Medicare Advantage plans vary widely. Nevertheless, almost all plans fall into one of the following categories:
- Health Maintenance Organization (HMO)
- Point of Service (POS)
- Preferred Provider Organization (PPO)
- Other (Includes: Private Fee-For-Service (PFFS) Plan, Medical Savings Account (MSA), and Special Needs Plan.)
Since Medicare Advantage plans are so diverse and every person’s situation is different, it is imperative to work with a reputable, experienced, and patient professional such as the Benefit Specialists at Senior Financial Group, who have many plan types that they can offer you.
2. Medicare Supplements
A Medicare Supplement—or Medigap—policy is another add-on to Medicare that helps pay the health care costs that basic Medicare does not. Private companies offer this insurance to help cover co-payments, co-insurance, and deductibles. Additionally, a Medicare Supplement can cover you when you travel outside the United States, whereas original Medicare cannot. To qualify for Medicare supplemental insurance, you must have Medicare Part A and B.
The open enrollment period for Medicare Supplements is the first six months someone is on Medicare Part B. As these plans are meant to cover “gaps” or cost-sharing in original Medicare, they do not cover services that Medicare does not cover, such as long-term care or private-duty nursing.