Medicare Health Insurance
Medicare is a vital solution for millions of Americans who would be unable to afford medical treatment otherwise. It is available in a number of “parts”, and generally is available to those age 65 or older, unless you have a qualifying medical condition. However, despite being a vital tool for millions, it can be confusing to choose the right coverage for your needs. Each “part” covers different elements, from hospitalization to prescription drug coverage to outpatient care. Making an informed comparison and choosing the right path forward is essential.
Understanding Medicare and How It Works
Medicare provides health insurance coverage for those who cannot qualify or cannot afford it through other insurance options. It’s designed for those who are 65 or older, as well as those under 65 years of age, but who have specific medical conditions. Note that it also covers those with end-stage renal disease, regardless of age.
Enrolling in Medicare
Like other types of insurance, you can only enroll in Medicare at certain times. Some individuals may be automatically enrolled, while others will need to apply. Your initial enrollment period usually starts about three months before you turn 65, and will end three months after you turn 65. If you choose not to enroll at that time, you may incur additional fees for Part B when you do decide to enroll.
There are three parts of Medicare – Part A, Part B, and Part C. We’ll address each of these separately. Part A is generally paid for through payroll tax contributions, so it usually does not come at a premium. It’s designed to provide coverage for patients while in the hospital, or a similar facility. Note that Part A does not pay for long-term or custodial care, though. Part B is available for a monthly premium and works similarly to other types of medical insurance. It’s designed to cover the costs of medical care, including doctor’s bills and outpatient services. In some instances, at-home care and supplies may be covered. Prescription coverage is designed to help make paying for prescribed medications easier. It is available for a monthly premium and is now available to everyone on Medicare (at a cost). Note that this is an insurance plan, and you will need to choose your type of prescription coverage from the included options.
Advantage and Medigap Plans
Medicare Advantage plans are designed to provide all the coverage found in standard Medicare plans, but also include additional costs, such as clinical research studies and additional benefits. Urgent care is covered, as well. Medigap plans are designed to work as a co-insurance. In other words, it fills in the gaps where other insurance options (including Medicare) may not apply. Note that there are numerous Medigap plans available, all labeled with a letter (A, B, C, D, etc.). You will need to compare the plans and choose the right option for your needs.
If you do not enroll in Medicare during your initial enrollment period, if you do not sign up for a Medicare prescription drug plan, a Medicare Advantage Plan or another Medicare health plan with prescription drug coverage, you may be required to pay a late enrollment penalty before you can enroll in Medicare Part D.
Medigap policies are standardized
Every Medigap policy must follow federal and state laws designed to protect you, and it must be clearly identified as "Medicare Supplement Insurance." Insurance companies can sell you only a "standardized" policy identified in most states by letters.
Each insurance company decides which Medigap policies it wants to sell, although state laws might affect which ones they offer. Insurance companies that sell Medigap policies:
- Don't have to offer every Medigap plan
- Must offer Medigap Plan A if they offer any Medigap policy
- Must also offer Plan C or Plan F if they offer any plan
Compare Medigap plans side-by-side
The chart below shows basic information about the different benefits Medigap policies cover.
Yes = the plan covers 100% of this benefit
No = the policy doesn't cover that benefit
% = the plan covers that percentage of this benefit
N/A = not applicable
|Medigap Benefits||Medigap Plans|
|Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Part B coinsurance or copayment||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes***|
|Blood (first 3 pints)||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part A hospice care coinsurance or copayment||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Skilled nursing facility care coinsurance||No||No||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part A deductible||No||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part B deductible||No||No||Yes||No||No||No||No||No||No||No|
|Part B excess charge||No||No||No||No||Yes||Yes||No||No||No||No|
|Foreign travel exchange (up to plan limits)||No||No||80%||80%||80%||80%||No||No||80%||80%|
* Plan F also offers a high-deductible plan. If you choose this option, this means you must pay for Medicare-covered costs up to the deductible amount of $2,200 in 2017 before your Medigap plan pays anything.
*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don't result in inpatient admission.