Original Medicare has gaps in coverage, such as deductibles, coinsurance, and copays. Many new beneficiaries find this a surprise, as it’s a common myth that Medicare covers healthcare services at 100%. Unfortunately, this is false, and many beneficiaries seek out an additional plan to help with healthcare expenses. There are two different Medicare plans you can purchase: a Medicare Supplement or Medicare Advantage plan. Before you enroll in one of these plans, you should fully understand how they work. Here are six important points to know about Medicare plans in 2022!
Medicare Supplement plans
A Medicare Supplement, also known as a Medigap plan, is sold by private insurance carriers or a Medicare brokerage. These plans are designed to help cover the “gaps” in Medicare and lower your yearly out-of-pocket costs for Medicare-approved healthcare services.
Medigap plans are secondary coverage
Medigap plans pay as secondary insurance to Original Medicare Part A and Part B. If a doctor accepts Original Medicare as insurance, they must take a Medigap plan. Since Medicare does not have network restrictions, neither does a Medigap plan. Therefore, you can visit any doctor across America and use your Medigap plan if the doctor accepts Medicare.
A Medigap plan is standardized
Medigap plans do not change their benefits from year-to-year. There are ten standardized Medigap plans and two high-deductible plans on the market. Each Medigap plan offers a different amount of healthcare coverage. In 2022, the two most popular plans are Medicare Supplement Plan G and Medicare Supplement Plan N.
Medigap plans are standardized. Therefore, if you purchase Plan N from Carrier X or Carrier Y, you receive the same benefits that Plan N offers. The monthly premium is the only difference between buying a specific Medigap plan from Carrier X or Carrier Y.
The cost of a Medigap plan varies
A Medigap premium depends on various factors. For example, when working with a Medicare agent, they will ask for your gender, age, zip code, and tobacco use. Your answers to these questions are what determines your premium. Since private insurance companies sell these plans, there is no set premium. So the carrier you purchase the Medigap plan from will also be a factor when determining your monthly Medigap premium.
Medicare Advantage plans
Medicare Advantage plans, known as Medicare Part C, are sold by private insurance carriers and Medicare brokers. However, these types of plans work very differently than Medicare Supplements.
You opt out of Medicare
When you enroll in a Medicare Advantage plan, you will no longer receive your Part A and Part B benefits through the government. You will opt out of Original Medicare, and the Medicare Advantage plan will take on the responsibility of providing you your inpatient and outpatient benefits. However, you must stay enrolled in Medicare and continue paying your Part B premium.
Medicare Advantage plans must cover the same benefits as Medicare; However, the Medicare Advantage plan will set your cost-sharing amounts. For example, Carrier X might set a flat copay of $30 for a doctor’s visit and a $60 copay to see a specialist. However, Carrier Y may have a 20% coinsurance for a doctor and specialist visits.
Medicare Advantage plans have a max-out-of-pocket (MOOP), which means it won’t let you exceed a certain amount for the year in healthcare costs. In 2022, the MOOP is $7,550. However, a carrier can lower this amount but cannot increase it.
Medicare Advantage plans have networks
Most Medicare Advantage plans have HMO and PPO networks. Whenever you have an HMO Medicare Advantage plan, you will need to visit the doctors within your network to have coverage. If you go outside of your network, you will pay the total cost of your healthcare services unless you have a medical emergency. HMO plans can have premiums as low as $0 in 2022!
PPO Medicare Advantage plans are more flexible, as you can go out-of-network for your care. However, you would pay more for your health services compared to in-network healthcare.
Medicare Advantage plans can include additional benefits
Many Medicare beneficiaries enjoy Advantage plans due to their additional benefits. For example, Original Medicare does not cover prescription drugs or routine dental, vision, or hearing. Many Medicare Advantage plans include all these types of benefits! But take note Medicare Advantage plans can change from year-to-year. So, it would be best if you didn’t enroll in a Medicare Advantage plan solely for its additional benefits, as they might not be included in the plan next year.
Summary
Understanding the different Medicare plans and their advantages and disadvantages can be challenging when you first enter the Medicare world. Before you enroll in a plan, ensure it is cost-effective and covers your healthcare needs. If you aren’t sure which plan is the right fit for you, contact a reputable Medicare broker that carries both types of plans! A Medicare broker can shop plans among multiple carriers and find the one that works for you and your needs.
