Medicare Coverage Options: What It Covers, What It Doesn't
Posted by Elliot Marks
Medicare is the US government’s health insurance program that provides medical coverage to American seniors 65 years old and over. The Centers for Medicare & Medicaid Services (CMS) reports that there are more than 60 million enrolled members in the Medicare system today. This health care system offers its members many Medicare coverage options to support their retirement lifestyles.
Are you ready to apply for Medicare coverage? If so, read further to learn more about the different Medicare options available so that you can make informed decisions about your future medical care needs. Do some homework today and you’ll secure your future.
Medicare in a Nutshell
Medicare pays for its members’ hospital, health specialist and physician visits at facilities that accept Medicare payment. Medicare is a “fee-for-service plan” because the Medicare member only pays a minimal, upfront fee for each service they actually use. The Medicare system will then pay for the rest.
Medicare Coverage Options
Medicare has multiple plan coverage for different benefits. Each of these plans is identified by a different letter.
Some of these plans are offered through private insurance companies. These companies consult with CMS to offer these varying forms of coverage. Some of these plans might only cover an individual and not couples.
There are two sections of basic coverage that all Medicare recipients are eligible to receive. These basic coverage parts are called Medicare Part A and B. You may hear Medicare Part A and B called the "Original Medicare" because the benefits in these two sections were what was included in the original Medicare program when it began in 1965.
Medicare Part A pays for home health care fees, hospital-stay expenses, and some hospice fees. To be eligible for Medicare Part A, you or your spouse have to have 10 years of work history. Part A members pay a $1,340 deductible per benefit period.
Medicare Part B pays the costs for medical equipment, diagnostic testing, and doctor’s exams. Part B enrollees pay monthly premiums that are based on their monthly income. These premium payments usually range between $134 and $428 per month.
Supplement or “Gap” Plans
Medicare enrolls also have access to a network of additional coverage called Medi “gap” plans.
Medigap plans can cover a single individual’s medical expenses. If married couples both want Medigap coverage, they must both purchase a separate policy for each person.
There are currently eight Medigap plans that members can sign up for to supplement the services they receive from Parts A and B. These supplemental Medigap plans are categorized by the following letters; C, D, F, G, K, L, M, N.
Sometimes Medicare members confuse Medigap Plans with the basic Medicare Parts A and B plans. Sometimes you’ll hear someone describe a Medigap plan as a “part” like they see in the titles for “Part A” or “Part B.” The correct reference for Original Medicare is to call them “parts” while Medigap plans are referred to as “plans.”
Medicap currently offers eight, different gap plans available that pay for other medical services beyond what Medicare doesn’t cover in Parts A-B. These Medicare supplemental insurance plans include:
Plan C gap plans provide coverage for additional medical expenses like routine hearing and vision exams. Plan C can also pay for other expenses that Parts A and B can’t cover like dental office visits.
Starting in 2020. Plan C is no longer be available to new Medicare members. Medicare enrollees who entered the system before 2020 can still sign up receive these Plan C benefits. New members in the system after 2020, will not.
Plan D provides supplemental coverage to pay for prescription medicine expenses. Part D medication plans can also cover preventative medical costs like flu shots and other common vaccines.
Plan D is a relatively new Medigap service and created in 2006. Before then, Medicare members had to pay for prescription medications using their own, out-of-pocket funds.
Plans F and G
Plans F and G have comparable coverage beyond Medicare Parts A and B. Both Plans F and G pay for hospitalization costs for an additional year once Part A and B benefits are exhausted. Plans F and G can also help cover additional medical services that general practitioners don’t provide such as specialist referrals and blood transfusions.
Plans F and G however, vary when supplementing Part B costs. For example, Plan G can’t be used to help pay for Part B’s annual deductible amounts. Plan F can be used this way.
Plans F can also help cover other various medical care expenses. For example, your first three pints of blood transfusion can be paid for with Plan F. You can also use Medigap Plan F to pay for the medical expenses you incur when you travel outside the United States.
Plan G will also help pay for any medical emergency costs you might have while traveling abroad. Medigap Plan G will also help cover the first $185 in out-patient medical services. These out-patient medical services include ambulance services, diabetes supplies, or x-rays.
Plans K, L, and M
Medigap Plans K, L, and M are also comparable in their coverage. Each plan only helps pay for a portion of the expenses on top of what Medicare Parts A and B covers. Plan K will pay for 50 percent of nursing home co-pay and hospice fees while Plan L will pay for 70 percent of these same expenses. Plan M helps pay for 20 percent of these same costs.
Medigap Plan N is another beneficial choice for Medicare enrollees. Plan N exchanges lower monthly premiums for increased co-payments and annual deductibles. Plan N can cover $20 for doctors' exam co-pay costs and $50 for emergency-room trip co-pay costs.
Medicare Advantage Plans
A Medicare Advantage Plan is an alternative policy to Medigap plans. You can enroll in a Medicare Advantage plan through a private insurance company authorized by CMS. These companies are structured just like a health maintenance organization (HMO) or a preferred provider organization (PPO.)
A Medicare Advantage plan pays for health care based on a monthly fee per enrollee instead of on a fee per medical service provided. Medicare Advantage plans can offer what Medicare Parts A and B already provide. There are also some Medicare Advantage packages that include costs for prescription drugs as well as routine medical visits for dental and vision exams.
Medicare Advantage Plans vs Medigap: What’s the Difference?
The primary difference between Medicare Advantage and Medigap plans is in the payment process. Medicare Advantage members will pay a regular monthly or billing period premium (whether they use the covered medical service or not.) Medigap members only pay for medical services when they use them.
Another difference involves where members can receive medical care. Medicare Advantage plan enrollees must use the doctors or medical facilities within their individual HMO or PPO network. Medigap plans members can see any doctor or visit any facility that currently accepts Medicare.
Medigap vs. Medicare Advantage Plans: Things to Consider
If you’re trying to decide whether a Medigap or Medicare Advantage plan is right for you, there are certain lifestyle factors you should take into consideration. Here are some things to consider to help you make your decision:
Medigap plans won’t include prescription medication coverage for their members. Medigap members will have to supplement their Parts A and B coverage with Plan D to receive this benefit. Medicare Advantage plans, on the other hand, will include coverage for prescription medicine costs for no extra fee.
Medical Service Provider Restrictions
Medicare Advantage plans work just like a PPO or HMO. Advantage plan enrollees are required to see the physicians or specialists within the same Advantage plan networks. Medigap plans are more flexible in that you can visit the physician of your choice anywhere Medicare is accepted.
Medical Emergencies During Out-of-Town Travel
Medicare Advantage limits members to providers within the same network. This requirement limits finding medical care while traveling out of town. Medigap plans don’t restrict members to networks as long as the service provider accepts Medicare patients.
Choosing a Medicare package doesn’t have to be a daunting task. Do your homework today to be fully informed on the different coverage packages that are available to you.
To find out more on the different Medicare coverage options, Check this Medigap plans comparison chart. You’ll find summarized information on the benefits provided in each plan. Use this chart to help you map out a plan to cover your future medical insurance coverage needs.
You can also consult with your retirement financial planning advisor. You should get their advice on the best Medicare plan that’s ready to meet your future plans.
Don’t forget to head to our website for more advice on the Medicare process. We want you to enjoy that well-deserved milestone you’ve worked a lifetime to earn.