While on the surface Medicare seems confusing, dealing with a good insurance broker can simplify it for you. Medicare is the healthcare system for American over age 65 or those who qualify for the program under social security disability. Medicare pays for a lot of your healthcare, but not all of it. Let’s start with Medicare “Part A”. That is your hospitalization services. Now there is no premium for this as it has been deducted from your paycheck your entire working life. Here is where it gets confusing, first you have an outpatient deductible. In 2014 it is $1216. That is for inpatient procedures. It also covers the first 60 days in the hospital. If you are in the hospital for 60-90 days you incur an additional $304 per day. If you are there longer than that you have to pay $608 per day. As you can see this can add up in expenses first and foremost. Also you can see how this can get confusing. There are processes like this for skilled nursing facilities as well as blood. These amounts change every year.
The outpatient or “PART B” is a little easier to follow. Part B it pays 80% of outpatient services. It also has a deductible of $147. That leaves you with the $147 plus 20% of outpatient charges.
Now that brings us to why you need a Medicare Supplement. A supplement fills the “gaps” in Original Medicare. A supplement depending on which product you get will cover the Part A expenses including the deductible. The part B expenses are covered as well, however there are some supplement plans that do not cover the deductible or like a plan N which leaves you with a co-pay for doctor visits.
The other part about Supplements is they are the same. Meaning Plan F, is plan F regardless of which carrier you get it from. Plan G is plan G again regardless of which carrier you get it from. So the premium is what drives a lot of Medicare Supplement sales.
The best part about Medicare and Medicare Supplement is you do not have to worry about whether or not your doctor is in the network. It is really simple. If the doctor accepts Medicare patients, they accept the supplement. Some doctors do not accept Medicare patients. Again, if they do not accept Medicare, they will not accept the supplement either. It does not matter which carrier you purchase your supplement from.
The next piece of the puzzle is what is called Medicare Advantage. Now these plans replace original Medicare. You are still in the Medicare system, but it is run by private insurance carriers. Often times, there are low or sometimes no premium on these. However, the out of pocket expense will often times be greater. Also these plans are often times network driven, meaning you have to go to a certain network of doctors. These plans are also available by county. In might be available in your county and not the next county over. If you move to a different State or County, you may have to give up your Advantage plan. Some Advantage plans come with a prescription or Part D plan included. On a supplement you have to purchase part D separately.
Medicare Advantage and Part D plans have an open enrollment every year. There is no underwriting except for End Stage Renal Disease. With a Supplement, you can change it whenever you want, but after your initial enrollment you have to medically qualify.
In closing, if you have Original Medicare, you should have a supplement to fill the gaps in the plan. You only need one supplement. A good Medicare Insurance Broker, can tell you which one is right for you. If you have Medicare Advantage, you cannot have a Medicare Supplement to go with it.