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Terminology

 OUT-OF-POCKET MAXIMUM  the amount you could pay annually towards medical costs/premiums.  

 DEDUCTIBLES - What you pay at the beginning of the year prior to the plan paying (ie: You pay $233.00 at the beginning of the year and then the plan will start paying towards your medical costs)

CO-PAYS - A set amount you pay for specific medical expenses (ie: When you go to the doctor you pay $20.00 each time)

COST-SHARE - The percentage you would pay for a specific service (ie: When you go to the doctor, you pay 20%)

Original Medicare consists of Parts A and B.  Part A covers hospital, skilled nursing, home care and hospice.  You get Part A at no cost by working for 10 years and paying taxes into the Social Security system during those working years.  If you didn't work that long, contact SS and they can tell you what you need to do.  Part B covers doctors, therapies, outpatient services, ambulance, etc.  Part B is the most commonly used portion of Medicare.  In 2022, Medicare Part B costs $170.10 per month.  If you're a high income earner you may pay more for your Medicare.  Adversely, if you're a low income earner and can qualify for Medicaid as well, you may pay less. Medicare Part B pays 80% of all medical charges which leaves you paying 20%.  Medicare also has Part D which covers prescription drugs.  It is required that you have prescription drug coverage.  Selecting the right coverage for medications is required to avoid penalties.

I get a lot of questions about medical costs.  Most people are surprised to find out that they have to pay a premium for Medicare Part B and still pay either co-pays or cost-share amounts.  There are also out-of-pocket costs.  Medicare doesn't have a maximum-out-of-pocket.  What that means, is that you could pay 20% indefinitely.  To mitigate costs, there are two types of plans offered by Medicare that you can choose from.  There are MEDICARE SUPPLEMENT/MEDIGAP plans or MEDICARE ADVANTAGE plans

  • Medicare Supplement/Medigap plans are an addition to Original Medicare

  • Supplement plans are offered by private companies

  • The Supplement pays your 20% portion of medical costs

  • There is a monthly premium that you pay for coverage.  When you pay your premium, you typically don't pay when you go to doctors of hospitals

  • Your premium costs are subject to rate increases

  • Plans are designed for people over 65.  You can get a plan if you are under 65 but the cost is higher

  • You have a guaranteed time to get into a Supplement plan, which is when you turn 65.  If you choose to get a Supplement plan without a guarantee issued time, you will be subject to under-writing to qualify

  • You can go to any doctor in the US that accepts Medicare

  • No pre-authorizations necessary

  • The plans are standardized, meaning that plans are required to offer the same coverage.  You may get different rates based off of you age and location but a Plan G covers the same way, regardless of what company you go through

  • These plans are excellent options if you travel

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  • The insurance companies pays your bills instead of Medicare and you follow the rules of the plan, instead of Medicare.  These plans look like group health plans that you may have gotten through an employer

  • You will typically see co-pays, set amounts you pay for each service

  • Medicare Advantage combines Part A, Part B and Prescription drug coverage into one plan

  • You can get additional benefits not covered by Medicare such as dental, vision, hearing, gym memberships, and over the counter products

  • These plans are the only type of plans you can have if you have Medicaid

  • You have networks of doctors, you have to use in-network doctors or you pay higher costs.  You also have referrals on some plans

  • You can get these benefits at a $0 premium

  • You can get a co-pay of $0 for your primary care doctor co-pay

  • There are maximum out-of-pocket costs with Medicare Advantage plans

  • You typically keep your plan for the entire year.  You are eligible to change plans at the end of every year if you choose

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Medicare Supplement/Medigap

Medicare Advantage

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