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Sunday, December 4, 2022

How Do Medicare Plans Work?

Learning about Medicare can be an overwhelming process with the different Medicare parts and Medicare plans. What does it all mean? How do Medicare plans work? First, to be eligible for Medicare, you must be at least 65 years old unless you are eligible earlier due to Social Security disability benefits. But, with the different Medicare plans and prices, it can all look like a never-ending maze of information. We will break down the differences here!

Original Medicare

Original Medicare is health insurance for America’s seniors 65 years and older. There are two parts that make up Original Medicare: Part A and Part B. Medicare Part A covers inpatient services. For example, Part A covers a semi-private hospital room, three meals a day, lab services, medications administered as an inpatient, skilled nursing, and hospice.

Medicare Part B covers outpatient services, such as doctor’s visits, ambulance rides, emergency room visits, durable medical equipment, select routine exams, such as mammograms and colonoscopes, and much more.

Although Original Medicare covers these above services, it does not fully cover all of your services. Therefore, you will still have out-of-pocket costs. Here’s an example –

You will first pay the Part B deductible when you receive a Part B service. The Part B deductible is $233 in 2022 and will decrease to $226 in 2023. After you pay the deductible, Part B covers 80% of your approved services for the rest of the year, leaving you responsible for a 20% coinsurance. The coinsurance amount does not have a cap, so 20% of a service like chemotherapy can be quite expensive.

Due to these out-of-pocket costs, many beneficiaries purchase a Medicare Supplement or Medicare Advantage plan for cost-sharing help. 

Medicare Supplement

Private insurance carriers sell Medicare Supplement plans, also known as Medigap plans. A Medigap plan helps supplement Original Medicare and cover the costs it leaves you with, such as deductibles and coinsurance.

A Medigap plan works as secondary insurance to Original Medicare. If Original Medicare covers a service, so will a Medigap plan. Medigap plans do not have any network restrictions. So, you can visit any doctor in the U.S. that accepts Medicare and use a Medigap plan, no matter the carrier or plan type.

The market has ten standardized Medigap plans: A, B, C, D, F, G, K, L, M, and N. However, Medigap Plans C and F are only available to beneficiaries eligible for Medicare before the year 2020. If you were eligible for Medicare before, you could still purchase Plan C or Plan F if available in your area.

Every Medigap plan covers a different set of benefits, and every plan comes with a different premium. The cost of a Medigap plan depends on multiple factors, such as your gender, age, zip code, tobacco use, plan type, and the carrier you purchase the plan through.

As briefly mentioned above, Medigap plans are standardized. Therefore, no matter who you purchase a Medigap plan from, it will have the same benefits. For instance, a Plan G covers the same services no matter if you buy the plan from Carrier A or Carrier B. So, the only difference between carriers is the monthly premium.

Medicare Advantage

Medicare Advantage plans, also known as Medicare Part C, are an alternative to Original Medicare. Private insurers sell Advantage plans, and when you enroll, you will receive your Part A and Part B benefits through that carrier. The insurance carrier will create your cost-sharing amounts for your medical services and a network of providers and pharmacies you can visit for your healthcare.

The two most popular Medicare Advantage plan types are HMO and PPO plans. HMO Advantage plans require you only to visit the doctors in your network unless you have a medical emergency. If you were to go outside the plan’s network for your care and it’s not an emergency, you would pay the total cost of the medical bill.

PPO Medicare Advantage plans provide more flexibility since you can go outside the plan’s network but at a costlier rate. You will pay more for out-of-network services than in-network ones, but you have the freedom to do so!

Advantage plans can have premiums as low as $0 per month, but you will have more annual out-of-pocket costs. Due to this, Advantage plans have a maximum out-of-pocket (MOOP) limit, which is $7,750 in 2022, and $8,300 in 2023. An insurance carrier can lower this amount, but once you meet the MOOP, your plan will kick in and pay for your healthcare services fully for the rest of the year.

Many beneficiaries enjoy Medicare Advantage plans due to their perks, such as dental, vision, and hearing insurance. Since Medicare does not cover these services, many seniors enjoy accessing them through their Advantage plan. However, Advantage plans are not required to offer these perks, and they can go away in the new year. So, enrolling in an Advantage plan is not recommended solely for its dental benefit.

Conclusion

Medicare does not cover all medical services at 100%, which leads many beneficiaries to purchase a Medicare Supplement or Medicare Advantage plan. But which Medicare plan is right for you? Work with a reputable Medicare broker to determine which plan type is right for your budget and medical needs.

Uneeb Khan
Uneeb Khan
Uneeb Khan CEO at blogili.com. Have 3 years of experience in the websites field. Uneeb Khan is the premier and most trustworthy informer for technology, telecom, business, auto news, games review in World.

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