Why am I am thinking about Swiss cheese, donut holes and Medicare?
Did you ever notice that at certain ages you were oblivious to how old you are? Then you wake up and someone ‘welcomed’ you to Middle Age. Then suddenly, your friends are talking about Social Security and Medicare at the most recent dinner parties you attended?
That’s what age I am – maybe you’re the same way. If so, it’s time to start thinking about things like social security and medicare. Autumn brings opportunity in the area of Medicare Planning. Medicare Planning can be complex and confusing. A brief review of the basics can help determine which Plan(s) is best suited for you.
“Original Medicare” is broken into two sections: Part A which covers hospital in-patient care, hospice care, and limited skilled nursing care. For most, Part A is available at no monthly cost. The second section of “Original Medicare” is Part B which covers medical providers, outpatient services, tests and certain therapies. For the majority of us the Part B monthly premium is currently $135.50.
Think of Parts A & B as a block of Swiss cheese, Original Medicare does not cover all medical care costs in full, or prescription medications. There are also deductibles, coinsurance percentages, and co-pays to consider. These additional costs add up quickly and therefore require having a deliberate plan to consider how best to manage out-of-pocket expenses. If you are not covered by an employer-based health plan (which serves to supplement Medicare Part A), then the options are to purchase either a Medicare Supplement (Medi-Gap) Plan, or a Medicare Advantage Plan.
Regardless of which approach you ultimately choose, you must first be enrolled in Medicare Part B. And, be aware not enrolling in B or a Drug plan within certain times requirements could result in a costly penalty. Completely confused?
Medicare Supplement Plans (private insurance) offer various options to cover some of the additional expenses that Original Medicare (Parts A&B) do not. Depending upon your current health and circumstances, you may wish to purchase more (or less) coverage. The most expensive plan available right now, that fills nearly all of the “holes” in Parts A & B still does not cover prescription medications. Therefore, an individual purchasing a Medicare Supplement Plan would still need to purchase a stand-alone prescription plan (Medicare Part D).
Medicare Advantage Plans (sometimes referred to as “Medicare Part C”) are a more recent addition to the Medicare Planning landscape. Within the Advantage Plan, “Original Medicare” (A&B) is “outsourced” to a private health insurance company, who must provide at least an equal benefit to that available in the Original Medicare plan and may offer plans that provide additional benefits. Most of these plans have prescription drug coverage built in at no additional cost. Medicare Advantage plans do have co-pays, deductibles and coinsurance; however, these costs tend to be modest and help to lower a person’s overall costs. Each plan comes with a stated maximum out-of-pocket limit that an individual would pay over the course of a year.
Prescription Drug Coverage, one of the biggest healthcare expenses that many of us will encounter, are generally based on co-pays depending upon the type of medication necessary. Most plans have a five-tiered pricing structure for covered drugs, and Part D plans have 3 stages, under which you pay differing prices for your prescription drugs during each stage: Initial, Gap (often referred to as the “Donut Hole”) and Catastrophic. Federal guidelines determine these stages and they are implemented by the insurance carrier.
If all of this information seems confusing and overwhelming — we understand! Companies offer a multitude of coverage alternatives, and it can be quite an undertaking to sort through all of the information available. Working with someone familiar with these choices can be an efficient, effective way to determine which Plan is best for you. Let’s Talk!
Remember — Open Enrollment is from October 15 through December 7. Please call to review your options now! Or, plan on attending one of our Medicare Seminars this October: October 2, 2019, 6pm at Cicero Library (8686 Knowledge Lane) OR October 7, 2019, 6pm, Marathon Financial Advisors (6319 fly road suite 1).