Dreamworker has spent years studying and dealing successfully with a number of health issues.
It's important to learn what you can about Medicare before signing up for a plan.
People end up paying for their plans depending on their ages when they buy in, their income, and where they live.
Also, many don't realize that Medicare is composed of several plans, and each has it's own guidelines, costs and rules.
- Original Medicare
- Medicare Part A
- Medicare Part B
- Part D and
- Medicare Advantage (aka Medicare Part C)
Medicare is a stand alone plan that is run and overseen by the government.
Part A is a plan that is part of Original Medicare, is free and pays for about 80% of in patient hospital expenses. However, patients must pay for deductibles and certain co-payments associated with this care. Everybody is required to carry Part A coverage.
Part B is a plan that is part of Original Medicare that covered outpatient care and services. However, people do not have to carry this insurance if they choose not to do so. Those who do carry it must py all deductibles and co-payments unless they carry Medigap policies.
Medigap is an add-on plan that can only be used by someone who already has Part A and B coverage. This insurance is offered by private companies, is relatively expensive but covers some or all of the 20% Medicare does not cover and may also pay for deductibles and co-payments as well as other items Medicare approves.
Part D is a Prescription Drug plan that has its own co-payments and may also have its own deductibles. These plans are offered by private insurance companies that cover portions of drug costs not covered by Medicare. Plans can change during as well as after each year, so care must be taken when choosing them.
Medicare Advantage is a totally separate plan from all of the others. It is overseen by Medicare but not run by Medicare. It is offered by different companies that have their costs, own co-payments and deductibles, and each plan can different significantly from the other.
One thing people need to be careful about is choosing Original Medicare as a stand alone policy for their coverage because it does not provide coverage for
- deductibles or
and costs 20% of your total costs plus co-payments and deductibles plus the full price of prescription drugs.
The fact that Medicare pays 80% sounds great, but if your hospital bill is $100,000, this means you'll have to come up with $20,000 in addition to your deductibles, which can be substantial. In 2018 they are more than $1200 per quarter for hospital stays and another $183 per year for Part B coverage. You'll also have co-payments for everything related to your care.
Another thing you should know is that Medicare, even when combined with Medigap and Part D policies, does not cover vision, dental or hearing services and in many cases will not pay for an ambulance.
At the very least, you should always combine a basic Medicare policy with Part D coverage and for the best protection add a Medigap policy. These come in different prices but can be lifesavers when it comes to paying the bills.
Given the differences in the plans and the situations of people who purchase them, as well as the fact that costs change yearly, it would be impossible to give estimates of how much people pay for their coverage.
Therefore, I will share the costs for my husband and myself for 2020.
Medicare coverage $3252.00
Medigap coverage $5068.00
Part D coverage $672.00
This adds up to $8992 for the year (or $750 per month).
At first glance this looks like a lot of money, but when you whittle it down to the monthly amount is more or less what most people are paying for standard insurance.
However, we don't pay many of the extras.
We never pay for
- a visit to a doctor or specialist,
- a hospital stay,
- a deductible,
- a co-payment of any kind or
- various other things such as physical therapy, ambulance rides or laboratory tests.
These things are highly expensive if you have to make co-payments or if they are not covered.
This year was an especially bad one for us as we jointly have had 7 surgeries in the first 8 months of this year. The cost notices just for mine were 110 pages long! We didn't pay one cent other than for medications and are still seeing specialists.
$750 per month is a really good deal when you stand the chance of being hit for hundreds of thousands of dollars!
A big problem with Medigap plans is that they only will pay for items that are first approved by Medicare.
For example, if Medicare does not approve a patient's use of an ambulance, Medigap won't pay either. This means that the patient must pay for his ride, and the cost can be significant. Where I live it's just under $700 per ride!
Another issue is that you can only buy a Medigap plan if you have Original Medicare.
Finally, not all companies that offer Medigap policies are equally sound financially, so it is possible that you can buy coverage from a company that goes out of business or stops carrying these policies.
You can always buy a different one, but it would cost you more to do so. Therefore, you want to make sure that you buy from a highly credible provider.
Part D plans are a bit trickier than Medigap because there are so many companies that offer them, prices vary considerably, and the drugs each one covers can be quite different as well.
So, it takes a bit of work and research for people to decide exactly what they want or need.
In 2018, my husband and I paid $8100 Medicare, Medigap and Part D plans. $1200 of that was for Part D.
Part D can become expensive if you need costly medications, but so can any insurance plan. However, sometimes you just have to pay to get what you need!
Part D Caveats
Some people cut corners and refuse to buy Part D plans because they don't feel like they need them.
However, if you buy one after the first year, you will pay an ongoing ten percent plan cost penalty that increases by 10% each year.
Another problem is that plans can drop coverage for certain medications during the year, but you can't drop the plan! However, you can file an appeal or may even be able to use a substitute medication if your doctor approves it.
Finally, and most importantly, not all plans are offered in every geographical location. Also some are much more expensive to have than others.
They can also change their plans yearly, which means you must take the time every year to make sure your medications are covered and that your plan is still affordable for you.
It is common for people who are just starting out with Medicare to become confused about all of the financial requirements, terminology and plan types so they usually start out by purchasing a Medicare Advantage Plan.
Some geographic locations offer many different plans, while others offer only a few. While they may look the same at first, they really are not because each one offers different costs, benefits, co-pays, and services.
I discussed our costs above, so will not repeat those figures here. What I will say is that all MA plans must provide all of the benefits of Medicare Parts A and B and also offer additional services.
- Prescription coverage is included in most plans, which means people don't have to pay extra for this service.
- Some plans offer coverage for dental, vision or hearing aids, but these are extremely small benefits that usually don't pay enough to make them worth having, and not all plans offer every one of them.
- Almost all plans offer a free gym membership.
- The biggest perk, of course, is that they save people the trouble of having to juggle a lot of information in order to buy coverage.
The monthly costs represent only one part of what people will have to pay if they need health services.
For example, many plans charge extra for deductibles, office visits, medications, physical therapy, hospital stays and other services.
This means that those who have few problems do well with them, but individuals who need care can end up paying far more than expected.
Out of pocket limits can cost thousands of dollars per year, and these limits do not apply to prescription medications.
Some plans do everything possible to make patients pay more. For example, most require referrals to see specialists, but upon arrival patients often find that no referrals were sent. Thus, they must return to their doctor's office to get new referrals before they can be seen. The result is that instead of two doctor's visits they have co-pays for three unless you they pay cash.
The point here is that while some plans may play fair, many others do not. They lure you in with zero or cheap premiums and offers of free gym memberships, and then make getting the help you need difficult and expensive.
What this means is that the “good deal” you thought you had might turn out to be a very costly headache at a time when you least need to have more problems than you already do!
People who have good health or have had good experiences love their Medicare Advantage policies, but those with health problems or who have seen the darker side of these plans don't feel the same way.
Some people think my husband and I are foolish to be spending so much money on the plans we have, when we could get good coverage for practically nothing.
We remind them that any company that is charging little or nothing must make up the losses somewhere which is why their patients pay extra for deductibles, hospital fees, doctor visits, lab fees and physical therapy.
We are also able to access the best specialists and hospitals at no cost.
This year, the two of us will pay a total of $8,610 for all of our plans combined.
It’s a bit more than last year and will be a bit less than next year. However, what we will get for our investment will be worth the every penny because over the past ten years our Medicare and Medigap plans have saved us more than half a million dollars!
Choose Plans Carefully
Choosing the best plan can be overwhelming and perhaps even a bit frightening because it is impossible to see into the future.
Being healthy today does not guarantee that you will be healthy tomorrow, so it's important to hope for the best while planning for the worst.
Medical care is never going to be cheap, so not make sure that you have the best possible coverage.
There are vast differences between Original Medicare and MA costs, so choose carefully.
This content is accurate and true to the best of the author’s knowledge and does not substitute for diagnosis, prognosis, treatment, prescription, and/or dietary advice from a licensed health professional. Drugs, supplements, and natural remedies may have dangerous side effects. If pregnant or nursing, consult with a qualified provider on an individual basis. Seek immediate help if you are experiencing a medical emergency.
© 2018 Sondra Rochelle