Medicare Insurance

If you are approaching 65, then it’s time to apply for Medicare Insurance from the Federal Government. Almost 81% of Medicare beneficiaries supplement their Medicare insurance with private, supplemental insurance policy, known as Medigap or Medicare Supplement Insurance, since it’s estimated that 20% of health care costs will not be paid by Medicare alone.

Medicare

When you qualify for Medicare, it’s usually Medicare Part A and Part B that you’re first enrolled in. Medicare Part A and Part B make up what’s commonly known as Original Medicare. Medicare Part A generally helps pay your costs as a hospital patient. Medicare Part B may help pay for doctor visits, preventive services, lab tests, medical equipment and supplies, and more.

What is Medicare Part A?

Medicare Part A is hospital insurance. Part A generally covers inpatient hospital stays, skilled nursing care, hospice care, and limited home health-care services. You typically pay a deductible and coinsurance and/or copayments.

Do you have to pay a Part A premium?

Many people don’t pay a monthly premium for Medicare Part A. For example, if you worked at least ten years (40 quarters) while paying taxes, you don’t pay a premium for Part A. If you worked for fewer than 30 quarters, you generally pay $471 per month in 2021. If you worked more than 30 but fewer than 40 quarters, your premium is $259 per month in 2021.

Do you have to pay a Part A premium?

Many people don’t pay a monthly premium for Medicare Part A. For example, if you worked at least ten years (40 quarters) while paying taxes, you don’t pay a premium for Part A. If you worked for fewer than 30 quarters, you generally pay $471 per month in 2021. If you worked more than 30 but fewer than 40 quarters, your premium is $259 per month in 2021.

What is Medicare Part B?

Medicare Part B is known as medical insurance. The following are examples of items and services it covers:

  • Doctor’s Visits
  • Flu shots
  • Pneumoccal shots
  • Other loan payments
  • Chemotherapy
  • Durable medical equipment, including wheelchairs & walkers
  • Diabetes screenings, supplies & therapy
  • Alcohol use counseling
  • Outpatient mental health care
  • Physical therapy

How much will you pay for Medicare Part B?

In most cases you will pay 20% of the medicare-approved amount for each item or service. A dedutable may also apply

Gap in coverage

As you can see, there are many things that Medicare Part A and Medicare Part B will cover, however, there are also many things that won’t be covered. Most notably, if you become very ill and need extensive hospital care or have frequent doctor’s visits, your costs may not be covered. Therefore having a Medicare Supplement Insurance policy can help “close the gap” between your total costs and what Medicare Part A and/or Medicare Part B will cover.

What is Medigap?

Medigap is a term used to describe the “gap” between what Medicare will cover and what it will not cover. People often purchase a Medicare Supplement Insurance policy to either close the gap or close the gap entirely.

Why is it called “Medicare Supplement”?

Medigap policies don’t actually supplement or add anything to anyone’s Medicare coverage. But they’re used to pay bills for you, by covering out of pocket medical care costs you’d have to pay for on your own.

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Why purchase medicare supplement insurance?

Doctor Visits: How Medicare Supplement insurance plans can help

Generally speaking, most standard medicare supplement insurance plans pay at least 50% of medicare-covered doctors visits, so if you have medicare supplement insurance and then it can be useful for you if you have a lot of doctor’s visits since copayments add up. The Medicare Part B (medical care) deductible is $203 in 2021. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services. If you know that you will be visiting the doctor multiple times a month, the amount you could save on copayments by having a Medicare Supplement insurance plan could exceed the cost of the additional insurance plan and so it can be worth it to you to have a medicare supplement policy.

Hospitalization: How Medicare Supplement insurance plans may help

If you have to spend a long time in a hospital, then having a medicare supplement policy could save you a lot of money. If you are on Medicare and are hospitalized for 1-60 days, you pay $0 coinsurance for each benefit period under Medicare Part A (hospital coverage. However, between days 61-90, you would pay $371 per day in 2021 that you’re in the hospital, and at day 91 and beyond you would pay $742 coinsurance in 2021 per each lifetime reserved for each benefit period, up to 60 days over your lifetime. After that you pay 100% of the hospital costs.
As an example, if you have a 70 day hospital stay, that would cost you $3,710 and a 95 day hospital stay would cost you $14,840, not counting the Medicare Part A deductible for 2021. If you had a Medicare Supplement policy this could save you thousands of dollars.

Durable Medical Equipment: How Medicare Supplement insurance plans may help

Durable medical equipment such as a walker, wheelchair, hospital bed, or other medical equipment you may need comes with a Part B coinsurance that could be paid for by a Medicare Supplement insurance plan. For example, a hospital bed that costs $2,000 might have a coinsurance amount of $400 (the Medicare Part B coinsurance is typically 20%). A Medicare Supplement insurance plan may pay for this coinsurance and save you the out of pocket costs.. Of course, different plans have different basic benefits, so you would want to talk to your agent to compare Medicare Supplement insurance plans.

Looking for a consultation? Get started with a Policy Solver representative.

What is Medicare Advantage?

Medicare advantage is also known as Medicare Part C and is considered an alternative to Original Medicare (Part A and Part B). Unlike Medicare Part A and Part B, offered by the Government, Medicare Advantage plans are health insurance plans offered by private health insurance companies approved by Medicare. Medicare Advantage health plans (such as HMOs and PPOs) are legally required to offer at least the same benefits as Original Medicare, but can include additional coverage as well, such as routine vision or dental benefits, health wellness programs, or prescription drugs.

One benefit of Medicare Advantage plans is that you can get your prescription drug benefits (Medicare Part D) included under the same plan, instead of having to enroll in a separate stand-alone Medicare Prescription Drug Plan. Also known as Medicare Advantage Prescription Drug plans, these plans give you the convenience of having your Medicare Part A, Part B, and Part D coverage through a single plan. If you want prescription drug benefits, you should get it through a Medicare Advantage plan that includes this coverage; you shouldn’t enroll in a Medicare Prescription Drug Plan, which typically works with Original Medicare. Medicare Advantage plan costs and coverage details can vary depending on the insurance company and county that you live in.

Things to consider

What to consider when making your choice:

Your lifestyle, health condition, and finances may all influence what you determine is best for you: traditional Medicare plus Medigap or Medicare Advantage. Here are some things to consider:

Costs

Durable medical equipment such as a walker, wheelchair, hospital bed, or other medical equipment you may need comes with a Part B coinsurance that could be paid for by a Medicare Supplement insurance plan. For example, a hospital bed that costs $2,000 might have a coinsurance amount of $400 (the Medicare Part B coinsurance is typically 20%). A Medicare Supplement insurance plan may pay for this coinsurance and save you the out of pocket costs.. Of course, different plans have different basic benefits, so you would want to talk to your agent to compare Medicare Supplement insurance plans.

Choice of doctors

Original Medicare allows you to use any U.S. doctor or hospital that accepts Medicare, and most do. Most Medicare Advantage plans restrict you to using physicians in their network and may cover less, or none, of the expenses of using out-of-network and out-of-town providers.

A plus of Medicare Advantage managed care plans is that care is coordinated and your primary care doctor will be in the loop about the findings of specialists. With traditional Medicare, you don’t need a referral to see a specialist or a prior authorization for procedures, but you’ll need to make sure care is coordinated and your doctors are in communication with one another. Often this is best done by developing a relationship with a primary care physician and letting them refer you to specialists.

Local conditions and convenience

In some areas where physicians and hospitals are scarce, it’s important to check out both the networks of available Medicare Advantage plans and the locations of providers who accept regular Medicare. Are the doctors accepting new patients? Will you have to travel far to see a provider or be treated in an emergency room? Advice from local professionals, neighbors, and licensed insurance brokers can help you find Medicare Advantage plans that do business in your area. Compare plans to find one that may suit your needs.

Lifestyle factors

Frequent travel, dual residences, and currently having physicians whom you would like to keep are some of the factors that may make regular Medicare a good choice. Ask your current physicians if they participate in any Medicare Advantage plans or accept regular Medicare. For frequent fliers, choosing regular Medicare plus a Medigap insurance policy that covers emergency care in foreign countries may be a good bet. Similarly, people who spend part of the year in a different geographical area may find it difficult to stay in-network for medical care and might be better off with regular Medicare and a Medigap insurance policy.

Your health

People with chronic diseases and those who develop a serious health condition should look deeper into the choices available. A Medicare Advantage plan may be a better choice if it has an out-of-pocket maximum that protects you from huge bills. Regular Medicare plus a Medigap insurance plan generally allows you more choice in where you receive your care. Check whether any expensive drugs or equipment (such as supplies for people with diabetes) will be covered by your Medicare prescription drug plan, whether it’s a stand-alone one or part of a Medicare Advantage plan.

Broader benefits

Medicare Advantage plans are in the throes of change routinely being modified as the government allows private insurers to add coverage for items that are not included in regular Medicare. These include such things as supplying food for service animals; paying for ramps for wheelchairs, hold bars, air quality monitors; adult day care; and residential and in-home respite care.

Key Takeaways: 

  • Enrolling in Medicare Parts A and B isn’t enough; you might have tens or hundreds of thousands of dollars in out of pocket expenses if you have a hospitcal stay without a supplemental policy. 
  • You should discuss a Medicare Supplement policy with a licensed representative.
  • You will typically have more flexibility in the choice of doctors you can see with a Medicare Supplement policy vs. A Medicare Advantage policy.
  • Your lifestyle choices should be evaluated when deciding what type of medicare supplement policy to get. 

FAQ

What is Original Medicare?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

What is Original Medicare Part A?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

What is Original Medicare Part B?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

Is Medicare the same as Medicaid?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

Can I get my prescription drugs covered under Original Medicare?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

Does Original Medicare cover vision, dental, or hearing care?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

Does Original Medicare pay for your nursing home stay?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

What is Medicare Advantage plan?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

What's the difference between a Medicare Advantage plan and a Medicare Supplement plan?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

Do Medicare Advantage plans have vision (eye care) benefits, dental, and hearing?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

What is a Medicare Part D plan?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

What is Medicare Supplement insurance?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

When can I apply for Medicare Supplement insurance?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.

How much Medicare Supplement insurance coverage do I need?

It can be expensive, but it depends on the type of policy you buy, the coverage you want, and when you buy it.

If you’re young and healthy, or if you don’t think you’ll need much long-term care for some other reason, you’ll probably pay a lot less for one of these policies than someone who is older, has health issues, or has a more likely need for long term care.