If you are new to Medicare, or Medicare eligible and recently lost your employer coverage, you are probably asking: What type of supplemental insurance should I buy? There are many choices and it can be a daunting task to learn about all the plans available and get enrolled in the best plan. Many people do not realize they can get the services of a Medicare certified insurance agent at no cost. The agent can help you select the best plan for you and you won’t pay any more than you would if you bought direct from the insurance company.

Please allow me to give a brief synopsis of Medicare and how to improve upon it. Medicare Part A pays for Inpatient Hospital Care, Skilled Nursing, Home Health Care and Hospice. You must pay a hospital inpatient deductible of $1,316 for every hospital stay, however there is no charge if you have a readmission within 60 days of release. Part A will then pay 100% of the charges for the first 60 days of admission. The cost for stays longer than 60 days are shared between the Medicare beneficiary and Medicare. Skilled nursing care is fully paid for 20 days and shared for the next 80 days.

Part B of Medicare covers physician care, outpatient care, testing, durable medical equipment and many preventive services. Part B has an annual deductible of $183 and then Medicare pays 80% and the Medicare beneficiary pays 20%. There is no cap on the 20%! So, if a Medicare beneficiary only has Part A & B they are exposed to some large potential costs. Chemotherapy treatment for cancer is quite often provided on an outpatient basis, so the Medicare beneficiary could be charged 20% of a bill that often exceeds $100,000.

Is Medigap a good option?

How can you be protected from this large potential exposure? One popular option is a Medigap (or sometimes called Medicare Supplement) Insurance plan. There are ten plans each distinguished by a letter (i.e., Plan A, Plan B, Plan C, Plan F, Plan G etc..) and each has a standardized benefit package. So, a Plan G, for example, would have the same benefits no matter what insurance company you buy it from.

One of the most popular plans is Plan F and it pays off all the deductibles and coinsurance on Parts A & B, so the Medicare beneficiary should have no out of pocket costs, except for Prescription Drugs which are covered separately. Generally, these plans are medically underwritten, which means that the premium and acceptability is based on your current health status. However, you have guaranteed acceptance if you buy when you first become eligible (age 65, usually) or if you had employer coverage that ended. The advantage of these plans is that you can access any medical provider nationwide that accepts Medicare assignment. Plans F & G will even pay fully for a provider that does not accept Medicare assignment.

Are prescription drugs covered?

The vast majority of those who buy a Medigap plan also buy a Part D Prescription Drug (PDP) plan from an insurance company. Going with these plans, is often called the Three Card system because you have to show your Medicare card, Your Medigap Card and your PDP card, as each plan pays claims on services.

There is another way to improve your Medicare, often called the One Card system., which is Medicare Advantage also known as Part C. You choose an insurance company and one of their provider networks, usually a PPO or HMO, and they provide the benefits and pay the claims of Part A & Part B.

Most plans also include the Part D PDP coverage as part of the plan. Since you only need to carry one card and they will pay all claims, it simplifies the claims paying paperwork. Typically, Medicare Advantage Prescription Drug (MAPD) have copays for various services similar to employer plans you may have been covered by previously. These plans also have an Out of Pocket Maximum(Cap), that protects you in the event of expensive or catastrophic care. Most plans offer additional benefits not covered by Medicare, like preventive dental, vision, hearing exams, hearing aids, fitness and transportation to medical providers. These plans are not medically underwritten, so there are no health questions asked to gain approval. Each year you have an Annual Election Period (AEP) that allows you to change to a different plan that might provide better benefits. These plans are also not rated based on age, so whether you’re 65 or 95, the rate is the same.

Sounds like a lot of decisions

So, which way is right for me, you may ask. Should I go with the Three Card System or the one Card System? I find that among my clients it’s about 60% go with the former and 40% go with the latter.

Which one is right for you? It depends on many factors:

  • Will my doctors and hospitals accept the plan?
  • Is it important to have the extra benefits offered by MAPD plans?
  • What is my risk tolerance?
  • What can I afford?

A Medicare certified agent will help you assess your situation so that you have the right plan for your unique health and financials status.

I am a certified Medicare agent who has helped thousands of Medicare beneficiaries. Please allow me to help you. AEP for those that want to change their plan is from October 15 – December 7.

Call Edward Williams at 586-408-1013 or 248-894-1365 or email at ewilliams@actiongroup.net.

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