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Logan, UT
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Pearson Health Advisors
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Our Process
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How Does Medicare Work?
Original Medicare: Part A & Part B
Original Medicare is made up of Part A & Part B. When you turn 65, you will need to sign up for Original Medicare before signing up for a Supplement or Advantage Plan. You can sign up three months before your 65th birthday, the month of your birthday, or three months after your birthday. As long as you are signed up, your Medicare will start the first of the month of your 65th birthday.
You will receive a red, white, and blue Medicare card that will comprise both your Part A Hospital Insurance and your Part B Medical Insurance. Part A covers inpatient hospitalization. The premium is typically $0 as long as you or your spouse have worked 10 years or 40 quarters. You will be responsible for a $1657 deductible per benefit period which is day 1-60 of being hospitalized. Each benefit period is 60 days and depending on the times you are hospitalized throughout the year you may need to pay the benefit period deductible multiple times. After 60 days straight of being in the hospital you will pay a daily copay for each day after.
Part B is medical insurance which covers things like doctor visits, outpatient surgery, labs, and ambulance rides. You are responsible for a $185 premium every month for your Part B. For any Medicare services covered under Part B, Medicare will pay 80% and you will pay the remaining 20% of any bill. There is no maximum out of pocket which can prove to be a problem if, for example, you would have large outpatient surgery bills. For this reason, you should also have a supplement or an advantage plan to help cover these gaps in coverage.
Medicare Supplements
The first option you have to cover the gaps in your Original Medicare is to add on a supplement. Medicare Supplements are added to Original Medicare to help cover the gaps in coverage in Part A and Part B. You can sign up for a supplement 3 months before your 65th birthday, the month of, or three months after your 65th birthday.
There are ten supplements with letter names from A to N. Each plan will have a premium usually around $100-200. The most common plans today are Plan G and Plan N. Plan G covers the Part A deductible we discussed above and the copays for hospital days as well as the 20% you would normally be responsible for with Part B. The only thing Plan G does not cover is the $257 deductible for Part B.
Plan N has a lower premium than Plan G but does not cover as many of the gaps as Plan G. With Plan N you are also responsible for the Part B deductible of $257 as well as a $20 copay for doctors visits and a $50 copay for ER visits. If you see a doctor who does not accept Medicare assignment you will also be responsible for the excess charge.
Often this discussion raises a question. Which plan is better? The answer is, that depends on you. If you’d like a plan that has a higher premium but no copays, then Plan G is a good option. If you don’t mind a couple copays and would value a lower premium, then Plan N is a good option.
Part D: Prescription Drug Plans
Once you are enrolled in Original Medicare and have chosen a supplement you will also want to sign up for a prescription drug plan. It is important that you sign up for a prescription drug plan during your Initial Enrollment Period. That period is 3 months before your 65th birthday, the month of, and three months after. If you fail to sign up for.a prescription drug plan when you are eligible, you will get a late enrollment penalty when you sign up at a later time. That penalty is a 1% penalty for every month you could have had Part D but chose not to. For this reason we always recommend that you get a prescription drug plan as soon as you are eligible.
Prescription drug plans have three stages. The first stage is the deductible stage. Some plans will have a deductible that you must pay before your plan kicks in. Once you’ve paid the deductible, you will then enter the initial stage. In this stage, you will pay copays and coinsurance for your drugs until you pay $2000 out of pocket. You will then enter the catastrophic coverage stage. In this stage all of your medications that are on your prescription drug plan will be covered 100% for the rest of the year.
It is important to take a look at your prescription drug plan every year to make sure that the specific plan you are on is still meeting your needs.
Part C: Advantage Plans
The second option you have to help fill in the gaps in Original Medicare is to enroll in an advantage plan. Advantage plans are owned by private health insurance companies and encompass both Part A and Part B within their plan. They also often include a Part D prescription drug plan.
Advantage plans usually have lower premiums than supplements, but they have higher out of pocket costs for doctor and hospital visits. Typically you will have a copay or a coninsurance for any medical visit or hospital stay. Many advantage plans also have networks and referrals. When getting on an advantage plan, you will want to check that your doctors are in network. Extra benefits that vary plan to plan is also offered on an advantage plan.
Still Have Questions?
Medicare can be confusing. If you have any questions or would like help looking at your personal situation, schedule our free consultation below. We’d love to talk with you.
Medicare Required Disclaimer: We do not offer every plan available in your area. We represent 3 organizations which offer 25 products in Cache Valley area. Please contact Medicare.gov, 1-800-MEDICARE, or your State Health Insurance Program to get more info on all of your options.
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