Medicare, Medicare Advantage, Medigap & Medicaid

What is an Medicare?

Medicare is a tax payer funded program, administered by the federal government, executed by the individual states through their approved health insurance companies, providing health insurance coverage for:

  • People who are 65 or older
  • Certain younger people with disabilities
  • People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD)

What are the parts of Medicare?

The different parts of Medicare help cover specific services:

  • Medicare Part A (Hospital Insurance)
    Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
  • Medicare Part B (Medical Insurance)
    Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
  • Medicare Part D (prescription drug coverage)
    Helps cover the cost of prescription drugs (including many recommended shots or vaccines).

Part A & Part B Premiums

Most people don’t pay a monthly premium for Part A. If you don’t qualify for premium-free Part A, you can buy Part A. Everyone pays a monthly premium for Part B.

How does Medicare work?

With Medicare, you have options in how you get your coverage. Once you enroll, you’ll need to decide how you’ll get your Medicare coverage. There are 2 main ways:

  • Original Medicare
  • Medicare Advantage

Medicare prescription drug coverage (Part D)

Medicare drug coverage helps pay for prescription drugs you need. To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage (this includes Medicare drug plans and Medicare Advantage Plans with drug coverage).

Plans have different monthly premiums. You’ll also have other costs throughout the year in a Medicare drug plan. How much you pay for each drug depends on which plan you choose.

To Summarize

Covers people age 65 and older, some people with disabilities and people with ESRD (End-Stage Renal Disease) Covers most medical services and can be supplemented by private companies. Does not cover most long term care.

Why is Medicare Advantage?

Commonly known as Medicare Part C, is a single plan offered by private insurance companies that combines coverage for Medicare Parts A (hospitals) & B (Doctors’ Visits).  Many plans include Part D prescription drug coverage.

Medicare Advantage plans are bundled alternatives to Original Medicare. These plans come from private insurance companies that contract with the federal government. The goal is to offer various health insurance benefits for people who qualify for Medicare. So, what’s the difference between Medicare Advantage and Original Medicare? We’ll break this down for you below.

Medicare Advantage Plans – How They Work

Many people refer to Medicare Advantage (MA) plans as Medicare Part C. MA plans have to give you a minimum of the same benefits that you’d get with Original Medicare. Many Medicare Advantage plans also offer coverage for Medicare Part D prescription drug coverage, and it can have additional benefits that you don’t get with Original Medicare. For example, some Medicare Advantage plans have coverage for eye exams, routine dental care, hearing aids, and glasses.

What’s the difference between Medicare Advantage and Original Medicare?

Some Medicare Advantage plans can come with specific provider networks that you have to use that can limit your choices as to which doctors you visit. If you go to a doctor outside of the network, the plan may not cover your expenses, or you’ll pay more than an in-network visit. Original Medicare allows you to usually use any medical facility or doctor that accepts Medicare assignment, so you may have more freedom.

In a Medicare Advantage plan, you will likely still have to pay the monthly premium for Part B, but any additional costs for the Medicare Advantage Plan can be less than what you’d spend on a Medigap plan. Sometimes, a Medicare Advantage Plan can have a $0 premium attached to it.

Medicare Advantage plans might also have a maximum out-of-pocket limit for what services they cover. This cap is what you’ll have to pay in addition to your normal premiums. For 2022, this cap is $7,550. Original Medicare does not have an annual limit to how much you may spend, so depending on your healthcare needs, your costs can add up.

Medicare Advantage Plans and Medigap Plans

It’s easy to confuse Medicare Advantage plans with Medigap, or Medicare Supplement, Insurance. Private insurance companies offer both, but they differ in how they cover your expenses. Medigap plans work to cover any coverage gaps Original Medicare leaves by covering roughly 20% of your covered charges. When you go to the doctor, Medigap will cover all or most of your cost-share. You’ll pay a monthly premium for Medigap.

By contrast, Medicare Advantage plans are bundled plans that have the same coverage you’d get if you enrolled in Original Medicare with the addition of limited coverage for other things like dental. You might have a premium with this plan, but many don’t have anything beyond Medicare Part B’s premium. Instead, you’ll pay coinsurance or copays for your medical care.

Each Medicare Advantage plan differs, so comparison shopping for them can be a challenge. You can’t have a Medigap policy and a Medicare Advantage plan at the same time.

How to Enroll in a Medicare Advantage Plan

If you’ve decided that you want to enroll in a Medicare Advantage plan instead of Original Medicare, you’ll have to enroll. You’ll need the date your Original Medicare started and the Medicare number when you call to enroll. You have to enroll in Medicare Part A and Part B before you can choose and enroll in a Medicare Advantage plan. The price will vary from plan to plan, so you want to make sure you double-check before you settle on one specific plan.

In Summary:

  • You must reside in the service area, continue to pay your Part B premium and you cannot have ESRD to be eligible. (There are some exceptions to the ESRD rule).

  • On an MAPD plan you must use your plan ID card instead of using your Medicare card when you are accessing benefits.

  • You may receive an Outbound Enrollment Verification call upon enrollment from the carrier

  • Convenience of single plan.

  • Many offer additional benefits not covered by Medicare (e.g. dental, vision hearing, preventive care.)

  • Eligibility for enrollment is not affected by medical history or pre-existing condition

What’s Medicare Supplement Insurance (Medigap)?

Medigap is Medicare Supplement Insurance that helps fill “gaps” in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost for covered health care services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, like:

  • Copayments
  • Coinsurance
  • Deductibles

Note: Medigap plans sold to people new to Medicare can no longer cover the Part B deductible. Because of this, Plans C and F are no longer available to people new to Medicare on or after January 1, 2020. However, if you were eligible for Medicare before January 1, 2020, but not yet enrolled, you may be able to buy one of these plans that cover the Part B deductible (Plan C or F). If you already have or were covered by Plan C or F (or the Plan F high deductible version) before January 1, 2020, you can keep your plan.

Some Medigap policies also cover services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, here’s what happens:

  • Medicare will pay its share of the Medicare-Approved Amount
  • Then, your Medigap insurance company pays its share.

8 things to know about Medigap policies

  1. You must have Medicare Part A and Part B.
  2. A Medigap policy is different from a Medicare Advantage Plan.  Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.
  3. You pay the private insurance company a monthly premium for your Medigap policy. You pay this monthly premium in addition to the monthly Part B premium that you pay to Medicare.
  4. A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
  5. You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.
  6. Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.
  7. Some Medigap policies sold in the past cover prescription drugs. But, Medigap policies sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D). If you buy Medigap and a Medicare drug plan from the same company, you may need to make 2 separate premium payments. Contact the company to find out how to pay your premiums.
  8. It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you’re switching back to Original Medicare.

Medigap policies don’t cover everything

Medigap policies generally don’t cover:

  • Long-term care (like non-skilled care you get in a nursing home)
  • Vision or dental services
  • Hearing aids
  • Eyeglasses
  • Private-duty nursing

Insurance plans that aren’t Medigap

Some types of insurance aren’t Medigap plans, they include:

  • Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
  • Medicare Prescription Drug Plans
  • Medicaid
  • Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
  • Tricare
  • Veterans’ benefits
  • Long-term care insurance policies
  • Indian Health Service, Tribal, and Urban Indian Health plans

Dropping your entire Medigap policy (not just the drug coverage)

You may want a completely different Medigap policy (not just your old Medigap policy without the prescription drug coverage). Or, you might decide to switch to a Medicare Advantage Plan that offers prescription drug coverage.

If you decide to drop your entire Medigap policy, you need to be careful about the timing. When you join a new Medicare drug plan, you pay a late enrollment penalty if one of these applies:

  • You drop your entire Medigap policy and the drug coverage wasn’t creditable prescription drug coverage
  • You go 63 days or more in a row before your new Medicare drug coverage begins

Why choose Basta Executive Services, LLC:

  • Using a broker gives you the power to compare and freedom to choose a plan that fits your individual needs.

  • We represent Medicare Advantage plans, Medicare Supplements, Special Needs Plans & PDP

  • With so many choices it is much easier to have one point of contact that can help you review all that is available.

Our team of highly skilled licensed insurance specialists will work with you to set you up with the right plan, whether traditional Medicare, Medicare Advantage or if you qualify for Medicaid. To learn more about Medicare, Medicare Advantage or if you qualify for Medicaid, please fill out the form below today and one of our licensed agents in your area will contact you.

Important Disclaimer: We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact medicare.gov or call 1-800-medicare, or your local state health insurance program to get more information on all your options.

*ALL ABOVE MENTIONED INFORMATION ARE COPIED FROM MEDICARE.GOV

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