If you (or someone you know) is getting ready for retirement, you’re likely trying to sort out the alphabet soup that is Medicare. We can walk you through it and help you make the best choices for your situation.
Let’s start with the basics. Medicare has four parts:
• Part A – Covers in-patient hospital care, skilled nursing care, home healthcare and hospice care. This is typically available at no cost if you’re eligible.
• Part B – Covers doctor’s visits, blood tests, ambulatory and emergency services, medical supplies, some drugs, X-rays and outpatient care. Part B typically has a monthly premium.
(Parts A and B both have annual deductibles that must be met before they pay on any services, which will be paid at 80 percent of the allowed amount.)
• Part C (Medicare Advantage) – These plans must cover everything that Parts A and B cover. However, they can include extra services, such as prescription drug coverage, vision, dental and gym memberships. These plans are offered privately through health insurance companies and can be purchased directly from the company or with the assistance of a broker. Medicare Advantage plans typically have a low or possibly no premium. If you choose a Medicare Advantage plan, you still have to pay your part B monthly premium.
These plans often come in multiple options, the most popular of which are:
Health Maintenance Organization (HMO) – You must select a primary care physician (PCP) within network and, depending on the plan, may be required to obtain all your referrals through them. Because you use one PCP to fulfill all your needs, this type of plan could come at a reduced price.
Preferred Provider Organization (PPO) – You do not need referrals with a PPO. You also do not need to stay in the network. However, it may cost more to get care from out-of-network providers except for emergency and urgent care.
• Part D (prescription drug coverage) – Part D is simply a program that offers insurance for your prescription medication needs. Part D benefits, and the premium, could be included in a Part C plan, but not always. Depending on the type of plan, you may have an annual deductible to meet before coverage begins, and then you may have copayments or coinsurance amounts due each time you have a prescription filled at an in-network pharmacy. Prescription coverage is offered separately for those who have Parts A and B, but it’s typically included with Part C plans.
• Medigap, or Medicare Supplement – This is extra coverage to take care of services that original Medicare (parts A and B) don’t cover (i.e., the remaining 20%). You cannot have a Medicare Supplement policy if you have Medicare Advantage.
Now you know the different parts and the different options, but how do you choose which are right for you?