The Parts of Medicare
Medicare itself has Parts not plans. Medicare is not Medicaid but is your primary health insurance in retirement. You have to address the Medicare decisions within 9 months of your 65th birthday in most cases. Let AIM help you with the decisions on the parts of Medicare and eventually plans.
Is your Hospital Coverage. This coverage pays for your room and board in the hospital or in the skilled nursing facility.
Is your Outpatient Coverage. This includes pretty much everything else: doctor visits, equipment, lab-work, surgeries, durable medical equipment, diagnosis tests, etc.
Known as a Medicare Advantage Plan, these plans pay instead of medicare, are optional and were created to give a low cost option to Medicare Insurance. Advantage plans are private insurance plans with their own local network of providers generally an HMO or PPO style plan.
Is your Drug Coverage. This is a pharmacy card which will allow you to purchase your prescriptions at a much lower price than retail. It is insurance you buy for present AND future medication needs. It’s pretty important to have unless you can afford to pay for all your medications out of pocket. For more about drug coverage, read our post about
You are eligible for these 3 parts of Medicare on the first day of the month in which you turn 65 (or earlier if you have qualified for Medicare due to disability). Understanding Medicare just got a little easier! Now that you know these 3 basic parts, keep them in mind as we continue.
UNDERSTAND YOUR SUPPLEMENTAL COVERAGE OPTIONS
Which One Is Right For You?
Now that we’ve outlined what Medicare pays for, and what your share is, we’ve discovered that some sort of supplemental insurance is necessary for you. This is MOST of what’s been filling up your mailbox: solicitations for supplemental insurance.
Once you decide between the two main types of coverage we are about to discuss, you’ll be able to toss out most of that stack of mail. There’s no need to keep mailers about Medicare Advantage plans if you determine that Medicare plans are a better fit for you, and vice versa.
One of the great things about the Medicare insurance options is that there are plans available for any budget on the spectrum. So next up, let’s do a quick overview of those 2 choices. (Some of you reading this will not need supplemental coverage yet because you have other coverage. If you will have employer coverage coordinating with your Medicare)
Medicare Advantage Plans (also called Part C)
Understanding Medicare Advantage plans can be a bit confusing because the Medicare Advantage program is also called Part C of Medicare. Medicare Advantage plans pay INSTEAD OF Medicare. These plans are optional. They were created to give a low-cost alternative to Medicare.
Advantage plans are private insurance plans with their own local network of providers, generally an HMO or PPO style plan. When you join an Advantage plan, you’ll see these providers in order to get the lowest co-pays.
You will pay co-pays for doctor visits, hospital stays, and any other Medicare-approved services. Medicare Advantage plans generally have lower premiums than Medicare plans. That’s because you agree to share in the costs by paying co-pays for services as you obtain them. (Whereas with a Medicare plan, you often will have NO copay, depending on the plan you choose.)
Most Medicare Advantage plans also include a rolled-in Part D drug benefit. This can be a benefit or a hindrance, depending on whether that rolled-in benefit includes the specific medications you need. Each type of plan has its advantages and disadvantages. You’ll want to be thinking about what things are most important to you.
Ask yourself, ‘Would a local network plan work for me or do I need wider access because I travel?’ Which plan would give me the most peace of mind? Am I okay with paying co-pays as I go along in order to get lower premiums up front?
These are the kinds of questions that will lead you to the right coverage.
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