MEDICARE

Medicare consists of four separate and distinct parts and you should be familiar with these parts before entering the Medicare system.

Original Medicare: This refers to Part A and Part B of Medicare. Part A covers hospitalizations and inpatient skilled nursing care. For those who have worked 40 quarters throughout their employment history (approximately 10 years), there is no charge for Part A coverage. Part B covers doctor visits, specialist visits, emergency room, and outpatient services. There is a monthly premium for Part B ($164.90 for 2023).

Coverage Gaps in Original Medicare: If you only have Part A and Part B of Medicare, you have significant exposure to high medical costs, especially if you're in poor health. For Part A, there is a $1,600 deductible for a 60-day benefit period. That means you can incur this charge up to 5 times per year. For Part B, there is a $226 annual deductible. Once that is met, you have a 20% coinsurance. For these reasons, almost all Medicare recipients supplement Original Medicare. 

Part C (Medicare Advantage): This is one way Medicare recipients supplement their Medicare coverage. Medicare Advantage plans are health plans administered by private companies that cover your Part A and Part B services. When you enter these plans, you essentially opt out of Original Medicare and opt in to a private plan. Medicare Advantage plans often also include prescription drug coverage, as well as benefits that Original Medicare generally doesn't cover. These plans have a cap on your out-of-pocket expenses for the year, a network of providers that one must see, and co-pays for various medical services. Lastly, most of these plans do not cost anything beyond the Medicare Part B premium.

Medigap Supplements: Unlike Medicare Advantage plans, Medigap Supplements work with Original Medicare. These are comprehensive plans administered by private companies that cover most of the gaps in coverage one has in Original Medicare. There are no networks to these plans, but they do have a monthly premium in addition to the Medicare Part B premium. Lastly, these plans do not include prescription drug coverage.

Part D: This is Medicare's prescription drug coverage. There are two ways in which drug plans are administered in this area: through a Medicare Advantage plan or a stand-alone prescription drug plan. If you have a Medicare Advantage plan, you must obtain your prescriptions through that plan and cannot have a separate prescription drug plan. The stand-alone prescription drug plans are for those either in Original Medicare only or those with a Medigap Supplement. These drug plans have monthly premiums, copays for each prescription, and a network of pharmacies. These need to be reviewed annually, as there are changes every year to these kinds of plans.

YOUR OPTIONS:

It is ultimately your choice as to how to cover your health care costs in Medicare. You must do your homework and understand your options before making this important decison. Your options may vary as to what is available in your area. However, generally you can opt to have just Part A, Part A and Part B (Original Medicare), and/or Part D (prescription drug plan), Medicare Supplemental insurance, and/or Part C (Medicare Advantage).

MEDICARE SUPPLEMENTAL INSURANCE - These plans are offered by numerous insurance carriers throughout the country. The supplemental plans are designed to supplement Original Medicare and will require you to qualify for Part A and be enrolled in Part B. The benefits are designated by plan letter as regulated by Congress and any carrier who offers a particular plan must provide the same benefits. Depending on your