Understanding the Various Types of Medicare Insurance

From Sept./Oct. 2014 issue of CAP Connection.

Q: I see many commercials and receive a lot mail concerning the various types of Medicare Insurance. Can you make it simple to understand so I can determine if I have the right type of coverage for my parents/my spouse/myself?

A: Yes indeed. Please keep in mind that Medicare was never meant to cover all of your doctor and hospital bills. That is why millions opt for additional insurance to help cover expenses that Medicare does not cover. Let’s start with Original Medicare, then visit each additional type of Medicare insurance.

This basic insurance coverage is provided by the U.S. Government to most U.S citizens age 65 and older who have “paid into the system” during their working years. It includes Medicare Part A (Hospital coverage) and Medicare Part B (Medical coverage).

Medicare Part A
Covers most of the cost of hospitalization. The 2014 deductible is $1,216. That is the amount you must pay each time you are hospitalized before the insurance begins. Part A will then pay the remaining cost of staying in a hospital room for up to 60 days. After 60 days, you must share in the cost of the room. After 150 days, you are fully responsible for the cost of each new day.

In a skilled nursing facility, Part A will pay the cost for the first 20 days, then you share the cost for days 21-100. After 100 days you must pay the cost of each new day.

Hospice care is covered under Part A. Not 100% but close to it.

Medicare Part B
Covers most of the cost from medically necessary treatments received in a doctor’s office, hospital, or other facility. The 2014 deductible is $147 per calendar year. That is the amount you must pay before the insurance begins to pay. Part B will then pay 80% of the Medicare Approved Amount for each item or service billed to Medicare. You are responsible for the remaining 20% plus 100% of any additional costs not covered or approved by Medicare.

Medicare Part A & B can be used with any doctor or hospital in the U.S. that is willing to accept Medicare’s payment for services.

The Cost of Part A is typically $0 per month, although some people pay for Part A.

The Cost of Part B in 2014 is $104.90/month for most people.

The greater your income, the more you could pay.

Also known as Medicare Advantage, these plans offer at least the same coverage as Medicare Part A & B combined. Typically there are additional benefits, such as built-in prescription drug coverage.

Medicare Part C is offered by insurance companies that receive a Government subsidy to provide coverage to Medicare recipients; therefore, the person who acquires Medicare Part C will have his/her hospital and medical bills paid by an insurance company.

Medicare Advantage (MA) Plans vary by company, state, and region. Medicare recipients can enroll during their Initial Enrollment Period, up to 3 months before and after the month they turn age 65, or during the Annual Open Enrollment Period, October 15 to December 7, when they may also switch plans.

MA Plans often have networks of providers; however, all doctors and hospitals are required to accept Medicare Part C in an emergency.

MA Plans have co-pays for office visits and require co-insurance for hospital stays and medical treatments received. There are annual out-of-pocket limits set for each plan to prevent too great a financial burden on the person with Medicare Part C.

Individuals must continue to pay their Part A & B premiums. Each MA Plan has its own premium, sometimes as low as $0 per month.

These stand-alone prescription plans are only available through insurance companies. Each Part D plan must meet minimum government requirements for prescription drug coverage; however, the plans, prices, and formularies (lists of covered medications) varies tremendously and often www.capmemberbenefits.org 13 change each year. Medicare recipients may enroll in a new Part D plan under the same rules as Part C.

Medicare Supplement insurance is designed to supplement Medicare Part A & B. This insurance is also known as “Medigap” because it fills in the gaps for A & B (such as copays, deductibles, and co-insurance).

Medicare Supplements are standardized and alphabetized (A, B, C, D, E, F, G, etc.) so consumers know exactly what benefits they will receive no matter what insurance company provides the coverage. Not all letters of the alphabet are represented, and some plans available in the past are no longer offered for sale.

Medicare Supplement insurance pays secondary to Medicare, can be used anywhere in the U.S. with any doctor or hospital that takes Medicare, and some plans offer emergency coverage outside the U.S.

The most comprehensive Medicare Supplement is Plan F. It is also the most widely sold new plan because it fills in every gap for all Medicare approved services and hospital stays, including Excess Charge coverage, which is up to an additional 15% above the 80/20 split between Medicare and you.

One of the most frequent complaints about Medicare Supplement insurance is the cost because premiums typically increase each year. Insurance companies can’t raise premiums based on individual claims and can only drop people from coverage if they don’t pay the premium due.

Medicare Supplements have a six-month Open Enrollment Period that begins on the first day of the month a person turns 65 and/or enrolls in Medicare Part B. Medicare recipients may then acquire or switch plans any time they can pass through underwriting.

This information is neither exhaustive nor complete. You can find more information at Medicare.gov by reading the 2014 Medicare & You booklet from CMS (the Centers for Medicare & Medicaid Services), and/or discussing your situation with a licensed agent who specializes in Medicare insurance.

Mr. Réne Evan Girard dba Hesed Insurance Solutions has been offering Medicare Supplements & Rx Plans to seniors since 2004. Initially licensed in Texas, Mr. Girard moved to California in 2009 and now offers a wide variety of insurance and financial products to residents of 46 states + D.C. CAP members are invited to visit his website MedicareOpenEnrollment.com to gather more information, run hassle-free quotes 24/7 nationwide from multiple insurance companies, or call toll free 1-800-980-0342 with any questions or concerns. Mr. Girard and his team are here to meet your needs with free consultations courtesy of CAP member benefits.

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