You realize just as you’re about to retire that your medical insurance is more complex than ever. Medicare Advantage Insurance and Medicare Supplement Insurance are also known as Medigap Insurance.
Let’s start at the beginning
Medicare has four sections. Part A covers home health, hospice care, skilled nursing, hospitals, and hospital care. Part B covers doctors’ services and other medical supplies that are not covered under Part A. Medicare Advantage Insurance (Part C) allows you to get Medicare coverage in lieu of the Part A and B. Part D provides prescription drug coverage.
Medicare Advantage Insurance: What is it?
Medicare Advantage Plans can cover prescription drugs and provide all the health services covered by Medicare. They may provide more coverage and have lower copayments than Medicare A and B.
Medicare Advantage Plans are Health Maintenance Organizations, Preferred Provider Organizations, private Fee-for-Service Plans and Medicare Special Needs Plans.
The private fee-for-service plans are provided by entities licensed to bear risk and with annual contracts for Medicare. These plans may offer extra benefits and don’t require that you use a specific network.
The Special Needs Plans are designed to target certain groups that are vulnerable, including those with chronic or severe conditions, who are in institutions, dual eligible, and/or suffer from serious disabilities.
What are HMOs and what do they involve?
HMOs are a type of medical insurance that is prepaid by doctors, insurers and hospitals. HMOs have a set monthly payment regardless of the amount of care needed. HMOs offer a variety of medical services. However, members are required to seek treatment at in-network doctors and facilities.
HMOs require you to see your primary physician first before seeing a specialist. HMOs usually have copayments that are nominal, rather than having to pay a certain percentage each time. HMOs do not generally limit benefits over a lifetime, but they will not cover non-emergency medical care provided by a physician who is not enrolled in the HMO.
What are PPOs (Protected Party Orders)?
The PPOs consist of hospitals and/or doctors who provide discounted medical services to only a certain group. PPO members are reimbursed by the insurance company for their treatment costs, minus any co-payments. Insurance companies may allow physicians to submit their bills directly so that members only pay a copayment.
PPO members do not have to use PPO doctors, but they can receive reimbursement of up to 90% for care received in the network as opposed to 60% for care outside the PPO. Some PPOs require that you pay a deductible. Some PPOs require you to submit paperwork in order to receive reimbursement. Most HMOs also have higher copayments.
Medicare Part A and Medicare B are required to enroll in a Medicare Plan. Part B is a mandatory monthly payment. The Medicare Advantage Plan may have an additional monthly fee for its extra benefits.
If you choose a Medicare Health Plan that includes an Advantage Plan, then your Medicare Supplement Insurance (or Medigap Insurance) will no longer pay for co-payments or deductibles.
What is Medigap Insurance?
Medigap Insurance will cover any expenses Medicare doesn’t cover if you don’t have an Advantage Plan. Both Medicare and Medigap policies pay for their respective share of health costs when you both have them.
Medigap insurance policies are required to have standard benefits. However, costs may vary. Medigap plans (Plans A-L) may offer up to twelve different benefits, each with its own set of extras and basic features. Medigap Plans (Plans A through L) offer the same benefits for all insurance companies. Companies choose which plans to provide.
In general, Medicare Part A and Medicare B are required to purchase Medigap Insurance. Paying a monthly premium for Part B and another premium to cover Medigap is the way you pay. Medigap insurance does not cover spouses, therefore you need to purchase separate policies.
If you have a basic understanding of how Medicare functions, then it will be easier for you to choose the Medicare supplement insurance or Medicare advantage plan that is right for your needs. Expert advisors can be contacted online for clarification and to answer any questions. Take advantage of the resources that will answer any questions you may have before Medicare.
