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Happy 65th Birthday! Are you ready to take the plunge into the bizarre maze otherwise known as Medicare?
No? Too bad. If you don’t want penalties — which can go up to 30% of your premium — to haunt your dreams, then it’s time to take a closer look at your options.
Since we’d rather have you enjoy your birthday cake than stress about Medicare, here are the different Medicare plans you need to know about.
Open Season? Let the Games Begin
Open season is the period for Medicare signups. Any time between October 15 to December 7, people can switch plans or sign up for the first time without penalties.
You need to sign up for Part A if you have employer-sponsored health coverage. If not, you need to decide if you’re going to go with the Medicare Advantage managed care, a.k.a Part C, or traditional Medicare otherwise known as Part B.
And don’t forget to go for Part D, which is a drug plan, since traditional Medicare won’t help much with the ridiculously-priced prescription drugs.
Sometimes even Part D won’t be enough to cover prescription drugs, which brings Medigap plans to our attention.
Did we lose you? No worries, we’ll delve into every part and see what is useful and what is not.
The Chronicles of Different Medicare Plans
Medicare Part A, in its simplest terms, is hospital insurance. It covers lovely things such as inpatient hospital care, hospice care, skilled nursing care, and home health care services in a limited capacity.
It’s part of the Original Medicare because you don’t have to fork over a monthly premium if you worked for 10 years and paid Medicare taxes.
Unfortunately, you have to pay for a deductible before those benefits activate. But once you do, Medicare will cover 100% of the costs up to 60 days in a hospital or 20 days in a skilled nursing facility.
Medicare Part B is the second part of the OG Medicare. It’s your same ol’ medical insurance covering medical tests like blood tests, MRIs, X-Rays, and a variety of other lab tests.
It also covers outpatient hospital care and specialized programs like addiction treatments.
The less fortunate part is the premium you have to pay. It’s mainly income-based, but there is no escaping without paying here.
Speaking of not-escaping, deductibles are here to stay a with Part B. You pay a specific deductible every year before the benefits kick in, and then you’ll be paying 20% of the bill when you go to a Medicare doctor.
Medicare Part C, or Medicare Advantage plans, are private health insurance plans that you’re eligible for once you’re on Part A or B.
These plans provide an advantage if you get excited about seeing the word “benefit.
They traditionally offer vision, hearing, and dental coverage. Sometimes they also cover prescription drugs.
As with every plan, those have some weak points. They usually have networks that you need to stick to, and you still have to pay the Original Medicare premiums.
It’s all about the drugs. Medicare Part D mainly covers prescription drugs. And as always, it comes with all the bells and whistles of premiums, copays, and yearly deductibles.
Here’s how it works: as always, you get to pay all your costs until you hit your plan’s deductible. Then, you pay up to 25% of the cost depending on your plan.
So that sounds simple enough, right? Nope!
Your cost will fluctuate heavily depending on many factors. Things like the medication you use, the pharmacy you chose, and the plan you select can make a huge difference.
What makes it even better, you need to opt for it anyway to avoid paying penalties.
Taking into consideration the astronomical prices of out-of-pocket prescription drugs and other out-of-pocket costs, additional plans are needed to fill the gaps.
Medicare Supplement Plans for the Win
Gaps, while they sound innocent enough, are more like endless voids when it comes to Medicare.
Depending on your condition, a gap can mean hundreds of thousand dollars on a yearly basis. That’s where Medicare supplement plans come to the rescue.
Medicare Supplement or Medigap are health insurance plans provided by private insurance companies. Their main aim is to pay your out-of-pocket expenses that Medicare Part A and B didn’t cover.
Remember all the coinsurance, copays, and deductibles we talked about? Some Medicare Supplement plans can pay them partially or in full.
Think about it like this: you’re facing a raging river of healthcare costs that is aiming straight for your house. The government put a leaky dam (which is the Medicare Part A and B) to help stop your house from flooding.
But at the end of the day, it is a leaky dam. And you just refurbished the house, so you buy a Medicare supplement plan to fill in all the holes in the dam.
Nice Example, but Which Ones Do I Really Need?
Here is a summary of the different Medicare plans you need to get and others that are optional:
- Medicare Parts A + B (Original Medicare): You need both to avoid penalties and other nasties.
- Medicare Part C (Medicare Advantage): It gives you all those lovely vision and dental benefits, but if you don’t opt for one, no harm, no foul.
- Medicare Part D: It’s the prescription drugs plan. You need to opt in, or penalties will dog your footsteps.
- Medicare Supplement Plans (Medigap): You don’t have to sign up, but we’ll say “we told you so,” when your nicely refurbished house floats down the river.
Remember Open Season
Hope you enjoyed your journey through different Medicare plans and their breakdowns. Now you know which plans to pick, so don’t forget to sign up during the open season.
It would be a shame to have done your homework, then forget to turn it in on time.