(BPT) – Navigating Medicare can be challenging. In fact, according to a 2017 UnitedHealthcare survey, nearly 40 percent of Medicare beneficiaries find the program confusing. Learning the basics can help you cut through the confusion and make an informed decision about which coverage option may be the right fit for you.
Here's a quick guide to five important Medicare terms to help prepare for the upcoming open enrollment period. What is open enrollment, you ask? Well, read on.
1. Open Enrollment Period
If you are already enrolled in Medicare and want to make changes to your health plan, you can do so during the annual open enrollment period, which runs from Oct. 15 to Dec. 7. For most people, this is the one opportunity each year to make changes to your Medicare coverage.
Changes made during this year's open enrollment period take effect on Jan. 1, 2018.
2. Original Medicare
Original Medicare is made up of Part A and Part B and is offered by the federal government. Simply put, Part A helps cover services such as inpatient care at a hospital or a skilled nursing facility. Part B helps cover doctor's office visits and outpatient physical and occupational therapy services.
According to Dr. Efrem Castillo, Chief Medical Officer for UnitedHealthcare Medicare & Retirement, "Original Medicare generally covers 80 percent of health care costs, leaving you responsible for paying the remaining 20 percent. It also does not have an out-of-pocket maximum, meaning that if you have unexpected health care costs, you could end up with a hefty bill."
Original Medicare does not cover things like prescription drugs, long-term care, hearing aids and the exams needed for fitting them, or routine dental or vision care.
3. Medicare Advantage
Medicare Advantage plans, also known as Medicare Part C, are offered by private insurance companies. Medicare Advantage plans combine Medicare Parts A and B into one plan (which means you only need to carry one card), and can offer additional benefits such as vision, hearing, dental and even gym memberships. Most plans also provide prescription drug coverage.
In addition to the all-in-one coverage, Medicare Advantage plans also have an annual out-of-pocket maximum, making it easier for you to estimate your health care costs, even when facing an unforeseen health event.
4. Medicare Supplement Insurance (Medigap)
A Medicare Supplement policy is also known as Medigap and is offered by private companies. It can help pay for some things not covered by Original Medicare, such as copays, coinsurance and deductibles. Medigap plans typically have a higher monthly premium but little or no out-of-pocket costs when you access care. However, Medigap plans don't cover prescription drugs, so you would need to enroll in a separate Part D plan.
5. Medicare Part D
Medicare Part D helps cover prescription drugs. Castillo explains, "You have two options for prescription drug coverage. Either enroll in a standalone Part D plan, or you can get drug coverage through most Medicare Advantage plans." Make sure that the plan you select covers the prescription medications you need.
To learn more, visit UHCOpenEnrollment.com.
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What is Medicare Advantage?
Medicare Advantage was established in 1995 to give seniors an alternative to Original Medicare. It's provided by companies that are approved/certified by Medicare to offer these plans. If you choose a Medicare Advantage you are going back to what you might have been used to before you turned 65.... Network restrictions, copays, 00 max out of pocket /year...travel restrictions, procedures need to be pre-certified just to name a few. You're back to HMO and PPOs. The best way to explain Medicare Advantage is to compare it to its alternative the Medicare Supplement. Medicare Advantage is an alternative here, you're no longer under Original Medicare. You get your Part A and Part B-like services through HMO or PPO from the insurance company. You have to pay your Part B premiums through your social security check still even though you are technically not on Original Medicare. There are several differences between a Supplement and Medicare Advantage. There you are only allowed to go to certain doctors and hospitals Medicare Advantage. You have co-pays and it could be for a doctor visit or a hospital visit. With the Medicare Advantage, if you get sick & you have to use the plan, you could be subject to the 00 annual out-of-pocket costs. We always say up to because we don't know what type of services you might need if you get sick.
I have some clients that only have to pay out 00 and I have some that had much more expensive really sick and had a serious health event who paid out the whole 00 so it really depends on what kind of health event you have.
So on the Medicare Advantage, the health plan manages your care and they decide which test you can have which procedures. Your care will determined between the doctor and the insurance plan, what THEY think you should have. The plan can be cancelled. You're in a 12-month contract with the insurance company and you can only make changes in that fall period in the period of time between October 15 and December 7. Any changes that you make to your Medicare Advantage plan are going to start or become effective January 1st so keep that in mind.
The Medicare Advantage plan can cancel you; they will have to notify you of that happening. You can't travel out of your general area you won't be covered in different states like you can be covered with your Medicare Supplement. You don't have the freedom that you have with a Medicare Supplement to determine what type of care YOU want.... It is up to your insurance company to decide which procedures you can have. The specialty type clinics like Mayo Clinic and MD Anderson are not included on Medicare Advantage. So when we compare that to a supplement the supplement picks up the difference that Medicare doesn't cover. Medicare is not designed to pay for everything. With a supplement there's no restrictions on hospitals or the doctors. The only requirement is that they have to take Medicare ...that's the only requirement.
There are no co-payments on a Supplement and you don't have a 00 out-of-pocket cost. The two most popular plans are a zero deductible plan (Plan F) and then the other one is 3 annual deductible plan (Plan G). It's your choice. They can't cancel your plan. Just make sure that your premium comes out of your bank account because that's the only way they can cancel you is for non-payments. That's why a lot of people just do the regular bank draft supplement.
With a supplement, you can go anywhere in the country, any doctor that you want, any hospital. As long as they take Medicare, you're good to go and you don't even need to be recertified. The Supplement will follow behind Medicare. If it's a normal procedure (no acupuncture, vitamins etc) and Medicare pays their percentage, then the Supplement company has NO choice but to pick up the rest. If you have to go to the Mayo Clinic or MD Anderson and I hope that you don't but they are available to you.
So have a look at this graph and you'll see the differences between the Medicare Advantage and Medicare Supplement. They are both handled by private insurance companies but they're designed quite differently.
Thank you for checking out What is Medicare Advantage. We know that Medicare is so confusing. If you have any questions please feel free to call us or check out our mini Medicare series on videos it's a 6-part series that we go through the different parts of Medicare you can find that you see it on the screen here at www.GetMedicareSavings.com.
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