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Understanding the Medicare Alphabet Soup
By Derek Goodman of inbizability.com
Navigating and organizing your Medicare coverage may have you scratching your head. There’s Part A, Part B, Part C, and Part D. You can sign up for Original Medicare or Medicare Advantage or a Medigap plan. With so many choices, you may feel that you’re reviewing the menu at a fast-food place. This resource from Dr. Mara Karpel can help you sort it all out. It offers definitions and brief explanations of common Medicare terms.
“Original Medicare,” a federal program, includes Part A, which covers hospitalization expenses, and Part B, which covers medical expenses such as doctor visits and tests.
“Part C” is Medicare Advantage, an alternative way to get your Medicare benefits. Advantage plans are made available through private insurance companies. These plans provide the same coverage as Part A and Part B. Many, but not all, Medicare Advantage plans also include vision, dental, and prescription drug coverage. You may have to pay a premium, or it may have a $0 premium.
“Part D” is the prescription drug coverage that was added to Medicare in 2005. You can sign up for Part D with Original Medicare.
As the AARP explains, Medicare Supplemental insurance, or Medigap coverage, is not Medicare Advantage. Medigap is supplemental coverage you can add to Original Medicare. It can help with copays and coinsurance and premiums. You cannot be on a Medicare Advantage plan and a Medigap plan at the same time.
Medicare is a government program that covers people 65 and over and people under 65 who are disabled. Medicaid is a state and federal program for low-income people of any age, and seniors have certain asset requirements in order to receive Medicaid benefits. Some people have both Medicare and Medicaid.
How to Choose Medicare Options
When you’re ready to review all the options available, you’ll need to compare plans carefully for the costs and what’s covered.
Most Medicare Advantage plans are HMOs (health maintenance organizations) or PPOs (preferred provider organizations). With HMOs, you must use providers in-network, and typically you must have a referral to see a specialist. With PPOs, you are encouraged to see a doctor in-network, but you don’t need a referral for a specialist. Check to see whether your current doctor is in the network for a plan you are considering. More doctors accept Original Medicare than Medicare Advantage plans.
There are numerous Medigap plans with catchy names like Plan A, Plan B, Plan C, etc. These plans are set by Medicare, so each plan offers the same coverage from state to state, but the premiums can vary widely.
When choosing a plan, another consideration should be your out-of-pocket expenses. Some Medicare Advantage plans can keep those costs lower, but may not offer as many benefits as Original Medicare. Again, some Medicare Advantage plans include prescription coverage, but not all. Original Medicare plus Part D may be better coverage for certain people. If you want vision and dental coverage, you’ll need to go with a Medicare Advantage plan.
If you are eligible for Medicare but are still working and have insurance through your employer, experts at Charles Schwab point out that a Medicare Advantage plan is probably not ideal. You could end up paying for coverage you don’t need, and you might lose your employer-provided insurance. Your best bet is to check with human resources as you review your options.
Seniors may feel that Medicare is a blessing, but wading through all the choices can be confusing and intimidating. Finding the best plan is critical though, particularly for seniors on a fixed income. So make a point to comb through your options, and don’t be afraid to ask friends and family for advice.
Dr. Mara Karpel is a clinical psychologist, practicing for over 29 years, radio show host, and author of the book, “The Passionate Life: Creating Vitality & Joy at Any Age.”
Check out Derek Goodman at inbizability.com.