Tag: about medicare

Part Two: Original Medicare vs Medicare Advantage

Posted on by Judah

Welcome back to our two-part series about the costs and benefits of Original Medicare and Medicare Advantage. In our last post, we talked about how Original Medicare can leave you on the hook for thousands of dollars a year. One way to reduce that financial burden is to join a Medigap plan for as little as $60 a month. Today let’s discuss the other option: Medicare Advantage plans.

Medicare Advantage

Sometimes called Medicare Part C, Medicare Advantage (MA) plans must cover all services Original Medicare does, except hospice care. (When a patient gets admitted to hospice, their coverage automatically reverts to Original Medicare.) MA providers can also  offer other benefits—such as prescription drug coverage, dental care, and vision plans—in order to stay competitive.

As we explained last time, Medicare contracts with private insurance companies to offer Medicare Advantage plans. Medicare pays the private insurer a set amount per beneficiary per month, and they use the funds to cover your medical costs. Beneficiaries who choose MA plans are still part of Medicare, and still pay their Medicare Part B premiums. Some MA plans don’t charge above your Medicare premium, while other plans can cost as much as an extra $200 a month. The three most common types of plans are:

  • Health Maintenance Organization (HMO)
  • Preferred Provider Organization (PPO)
  • Private Fee-for-Service (PFFS)

Each type of plan has different rules, restrictions, and networks. Approximately 21 percent of New Jersey seniors enrolled in an Advantage plan in 2017. Let’s explore the pros and cons of Medicare Advantage:

The Plus Side of MA: Extra Coverage

The main draw of MA plans is that they usually provide benefits for some of Medicare’s non-covered services. Prescription drug coverage continues to be a problem for seniors under Medicare. Part D, Medicare’s optional prescription drug plan, has serious gaps in coverage that can cost thousands of dollars a year. By contrast, many MA plans offer broad drug coverage with much smaller co-payments. Plus, they often offer dental and vision coverage, unlike Original Medicare.

When it comes to care in a skilled nursing facility, some MA plans don’t require the  3-day qualifying inpatient stay Original Medicare demands.

Another benefit is that while the co-payments are often higher than Original Medicare’s, most MA plans have an out-of-pocket maximum. That means once you’ve paid a certain amount of co-payments, your insurer will pay your out-of-pocket expenses for the rest of the year. If you need a surgery, for example, you’ll probably reach your out-of-pocket maximum fairly quickly—leaving you with no out-of-pocket costs for the rest of year. In Original Medicare, you always have to pay the 20% copay, regardless of how much you’ve already paid.

The Downside of MA: Less Standardization

Since private insurers administer the MA plans, they can apply their own rules to the Medicare plan. While the basic coverage is the same, the plans have much more flexibility in how to apply your coverage. Here are some of the things you can expect from a private insurer:

  • Higher premiums, deductibles, and co-payment amounts. These plan details can change from year to year.
  • Stricter rules for coverage of certain services and products. You may be required to get a referral  from your primary doctor in order to see a specialist. You may also be required to stick to doctors or hospitals in the plan’s network. Tip: HMO plans are generally cheaper than PPO, but restrict you to a smaller network of medical providers.
  • No guaranteed plan renewal. Advantage plans have annual contracts with Medicare, so if your provider chooses not to renew their contract, you’ll have to find a new insurer.
  • No out-of-state coverage. Original Medicare offers you a nation-wide coverage. It’s the same in every state, so if you travel often, you can use your Medicare coverage anywhere you go. Medicare Advantage often only covers you regionally.

Which Plan is Right for Me?

Now that you know more about Original Medicare and Medicare Advantage, you are more equipped to make the decision based on your personal circumstances. If you have high prescription medication costs, you might prefer an Advantage plan, while if you split your time between two states, Original Medicare is probably the way to go. Because MA plans are not standardized, make sure to check the benefits of each one before you choose a plan. A licensed insurance agent can help you find the plan to best suit your needs.

Original Medicare vs Medicare Advantage: A Two-Part Series

Posted on by Judah

Which saves you more money, Original Medicare or Medicare Advantage?

The correct answer is, “it depends.” Both forms of medical coverage have unique costs and benefits.  You’ll make your choice based on different factors in your own situation, so there’s no definitive answer to the question.

In this article, we’ll explore Original Medicare, while next week we’ll talk about Medicare Advantage.

First, some definitions.

Original Medicare is, like its name suggests, Medicare in its Original form. Medicare is the federal health insurance program for seniors and certain younger people with disabilities. A small portion of every employee’s paycheck goes toward the Medicare tax, which funds the program. Under Original Medicare, seniors age 65 and older are automatically eligible for coverage in Part A and Part B. Part A covers inpatient services and Part B covers outpatient.

Medicare Advantage (MA) is a  private health plan that administers Medicare benefits. Private insurance companies contract with the federal government to provide these plans. MA plans must cover all the services Medicare covers, however they may have different rules, costs and restrictions on the services. In addition, many MA plans offer benefits beyond Original Medicare, such as dental and vision coverage.

Here’s a more detailed overview of each type of plan, and what you can expect to pay:

Original Medicare

On the face of it, Original Medicare looks cheaper than MA. If you or your spouse contributed to Social Security for at least 10 years, you get Part A free. Plus, the standard monthly premium for Part B is well below average for comparable private coverage.  The monthly premium will change based on your income and whether you’re receiving Social Security benefits at the same time.

While Original Medicare’s premiums certainly are low, they don’t present a full picture of the costs you’ll encounter. Medicare has a high cost-sharing ratio that can leave you with thousands of dollars of medical bills. Here’s what you have to pay with Original Medicare:

  • Deductible

    Medicare starts covering your medical bills after you meet your annual deductible. The Part B deductible is relatively low, just $183 for 2018. The Part A deductible is higher at $1340 per benefit period. (The benefit period ends when you haven’t gotten inpatient care for 60 days in a row, so you can have a few benefit periods in one year.)

  • Part A Coinsurance

    Part A covers inpatient hospital stays at 100% for the first 60 days once you meet your deductible. It covers 100% of skilled nursing care for the first 20 days. After the first 60 and 20 days respectively, there is a coinsurance per day. After 100 days of inpatient care, Part A coverage ends.

  • Part B Coinsurance

    Part B covers 80% of services, leaving the 20% coinsurance for you. Unlike most private insurance plans, there is no yearly limit on your out-of-pocket expenses, so expenses can add up after a while.

  • Non-covered Services

    Some medical expenses aren’t covered by Medicare at all. These include most prescription drugs, dental care, and vision care.

For some relief from the never-ending coinsurance payment, many Medicare beneficiaries opt to also take out a Medigap plan. Medigap plans are standardized supplemental plans that cover a lot of the out-of-pocket costs. The most popular plans in New Jersey average $100-$150, but you can get a plan for as low as $60 a month.

The other alternative to Medicare’s high out-of-pocket cost is enrolling in a Medicare Advantage plan. Look out for our blog post next week where we’ll discuss the pros and cons of Medicare Advantage.

A Guide To Medicare and Other Senior Health Benefit Programs

A Guide To Medicare and Other Senior Health Benefit Programs

Posted on by Judah

Medicare Maze!Joe Sanders never expected to wind up in the hospital for an extended stay. At age 68, he was in good health and leading an active life. So when a sudden heart attack on the golf course landed him in an emergency room, he was surprised to learn that his government health benefits weren’t going to see him through the long haul.

Unfortunately, like most of us, Joe never took a close look at his government entitlements and other options before an emergency struck. Had he fully understood his choices, he might have been better prepared to cope with the financial demands his care brought about. This article is designed to provide you with the basic information you’ll need to begin assessing your own health care coverage options.

Medicare Part A & B

Medicare is a two part program underwritten by the U.S Department of Health and Human Services that provides basic hospitalization and medical coverage for people age 65 and over. It also serves people under the age of 65 with certain disabilities. For example, if you have permanent kidney failure that is being treated with Dialysis or a transplant, or have been receiving Social Security or Railroad Retirement disability checks for at least 24 months, you are eligible for Medicare even if you’re under age 65.

Medicare Part A provides automatic hospital coverage, as long as you have worked at least 10 years in Medicare-covered employment. It also covers inpatient rehabilitation, sub-acute or skilled nursing care provided in a hospital or long term skilled nursing facility, as well as home health care and Hospice services. Part B helps cover medical and Doctors’ bills, and helps pay for rental or purchase of necessary medical equipment such as prostheses, wheelchairs and post surgical supplies. If you qualify for Medicare and have a non working spouse, he/she can also get Medicare parts A and B at age 65.

While part A is yours free of charge, Part B is considered elective coverage and requires monthly contributions. There are also several health care options available to Medicare beneficiaries, which come under the label of Medical Advantage. Most people receive a Medicare enrollment package just prior to their 65 birthday. At that point, they may choose whether or not to opt for Medicare Part B benefits and pay the required premiums for that coverage. If you have reached the age of 65 and have NOT received a Medicare Enrollment Package, you must call your local Social Security office in order to determine your eligibility.

The Medicare Part D: Prescription Drug Benefits

Introduced in January 2006, Medicare Part D is a prescription drug program available to all Medicare beneficiaries. Most people who qualify will pay reduced or no premiums and deductibles, and lower co-payments for their medication depending on their incomes and circumstances. Since private health insurance companies administer the program, monthly cost and coverage will also vary according to the company and plan you choose, as well as your state of residence. Premiums are in addition to the Part A and/or Part B premiums you may already be paying.

If you are currently taking prescription medication or thin you may in the future, you should explore your Part D options. Contact Social Security at 800-772-1213 or Centers for Medicare and Medicaid Services at 877-267-2323 or visit www.medicare.gov

Medicaid: Benefits for low income households

Medicaid is a combined federal-state program usually operated by state welfare or health departments and designed to furnish several basic services to low-income individuals. These include inpatient and outpatient hospital care, physicians’ services, nursing home care and laboratory and x-ray services. Under financial hardship, Medicaid may also be used to pay your Medicare premiums, deductibles and co-insurance.

MediGap: Benefits that take over where Medicare leaves off

MediGap refers to one of several supplemental health insurance policies that can be purchased to cover the costs Medicare often doesn’t cover, like prescription drugs, dental care, orthotics, hearing aids, or eyeglasses. For a complete list of recognized MediGap providers, contact the National Association of Sate Units on Aging, 1-202-898-2578 or visit www.nasua.org to locate the Office on Aging in your state.

Long-Term Care Insurance: Planning ahead for sudden continuing health care expenses.

Many people mistakenly believe that Medicare covers long-term care expenses such as nursing home and home health services. In fact, the program only pays short-term benefits for care in a skilled nursing facility and for part time skilled nursing visits at home. As for Medicaid, it does not generally pay for long-term care at home or for assisted living. As a result, if a person needs extended, non-nursing home health care, the only solution may rest with his or her ability to pay privately. That’s where long-term care insurance becomes a consideration.

Long-term care insurance is designed to pay for sudden, large, continuing healthcare expenses, whether care is provided in a nursing home, hospice, at home or elsewhere. Policies are sold through licensed insurance agents and brokers, and paid for from the policyholders’ private funds. It’s important to note that coverage is not limited to care for the elderly. As such, long-term care insurance may be a consideration for nearly every adult. As you would expect, premiums are significantly higher for older applicants who are at greater risk, therefore, the sooner you evaluate insurance options, the better.

Be An Educated Health Care Consumer: What you don’t know CAN hurt you.

Understand that most government entitlements are NOT automatic. You need to apply for them and meet all government requirements for coverage. Also, don’t assume that you’ll be covered for everything that comes along or you could be in for an expensive shock. Always familiarize yourself with the details of your medical coverage, and consider filling any gaps with an established supplementary plan. Consult an attorney or government counselor to help you make sense out of complex requirements or limitations in your coverage.