So, what is Medicare?
If you are nearing your 65th birthday, you’ve likely been hearing a lot about Medicare lately, probably have received a mountain of mail and no doubt you have questions. Medicare is the federal health insurance program for individuals who are 65 or older. Others who may be eligible? People under 65 with disabilities and those suffering from End Stage Renal Disease (ESRD) requiring a kidney transplant or dialysis.
What does Medicare Cover?
This is where things can start to get confusing! There is a ton of good info on the web. Medicare.gov is an excellent resource. Click here for the updated deductibles and benefits. We like taking the mystery out of Medicare by breaking it down like this:
All you have to do is remember 4 and 3!
MEDICARE HAS 4 PARTS – ABCDs:
A – Hospital, Skilled Nursing, Hospice, etc. – $0 premium if you or your spouse worked 40 quarters
B – Doctors, Outpatient, etc. – 2020 premium starts at $144.60 but is income related (see below)
C – Medicare Advantage Plan – Most plans do NOT have a premium
D – Prescription Drug Plan – Ranges from $12/mo – $150/mo dependent on your meds
s – Supplement/MediGap – Not a Federal Program but will be an option. Premiums range from $32/mo – $450 depending on age, geographic location and whether or not you smoke.
MEDICARE HAS 3 OPTIONS – The Pros and Cons:
1. Original Medicare (Part A & Part B) Only
PRO: You can go to any Doctor, Hospital, Urgent Care, etc. with NO referral needed (as long as they accept Medicare).
PRO: Low premiums. You only pay your Part B premium.
CON: No Maximum Out of Pocket (MOOP). In a nutshell – the downfall of choosing Option 1…there is NO maximum out of pocket. Medicare pays for approximately 80% of your medical expenses, you’re on the hook for around 20% including Part B drugs. Chemo and anti-rejection drugs are Part B drugs. Do the math and calculate what 20% of chemotherapy or radiation for one year would be and you’ll see very quickly why this is not a very good option.
2. Original Medicare (Part A & Part B) PLUS a Supplement Plan (Medigap) AND/OR Prescription Drug Plan (Part D). We call this one the ‘Better Than a PPO Plan’.
PRO: CHOICE – Just like option 1, you can go to any Doctor, Hospital, Urgent Care, etc. with NO referral needed (as long as the accept Medicare).
PRO: COMPREHENSIVE COVERAGE – Medical and drug coverage. The MediGap Supplement will pick up SOME or ALL of what Medicare doesn’t pay (depends on which Supplement you choose and as long as it’s Medicare approved).
CON: Two (2) additional premiums (besides your Part B premium).
3. Medicare Advantage Plan (Part C, like an HMO, PPO, MSA, PFFS, etc.). Most times, these plans include Part D and can include other services that Medicare doesn’t cover (dental, vision, transportation, acupuncture or chiropractic care). Deciding on a Medicare Advantage Plan? Check out this great ARTICLE on a few mistakes to avoid!
PRO: NO or LOW additional premiums. In many areas like the Los Angeles area, there are $0 premiums
PRO: Many Part C Medicare Advantage Plans offer other benefits such as vision, hearing, dental, transportation, etc.
CON: The insurance company takes over administration of your Part A & B and therefore, the insurance company will have a say so whether you have a procedure or test. There are limitations and rules for each different type of Part C plan. Also, if in an HMO, you are in one Medical Group and will need to obtain a referral from your Primary Care Physician to see a Specialist (like a dermatologist or cardiologist), unless the Medical Group allows for ‘self-referral’.
Once you’ve got that down, time to look at your personal situation. It comes down to BUDGET and ACCESS. EVERYONE’s situation is different! Here are some questions to ask yourself:
- Do you want access to any provider that accepts Medicare or will you go to a provider suggested by your Primary Doctor?
- Are you ok with paying additional premiums for more choice of providers?
- Do you have a 2nd home in another part of the country?
- What are your medications (name, dosage, quantity per day)?
- Will you be obtaining a Concierge Physician?
CON: No prescription drug coverage