One questions we hear a lot at Medicare Life Health is “Does Medicare Cover Hearing Aids?
The simple answer is NO.
However, some Medicare Advantage Plans will. Let’s look at both.
Original Medicare Will Not Cover Hearing Aids.
Original Medicare – Parts A & B run and administered by the Federal Government – does not pay for hearing aids. In addition, it does not cover exams or fittings needed for hearing aids.
As an exception, Medicare will cover any hearing exams ordered by your doctor for medical treatment. Here is the direct quote from the Medicare and You Guidebook. (Please see our Medicare and You User Guide for more information.)
“Hearing and balance exams – Medicare covers these exams if your doctor or other health care provider orders them to see if you need medical treatment. You pay 20% of the Medicare-approved amount, and the Part B deductible applies. In a hospital outpatient setting, you also pay the hospital a copayment.”
No, Medicare Supplement Plans (also called Medigap) do not cover hearing exams or hearing aids. These supplements cover the costs of covered services that Medicare leaves for beneficiaries to pay. (For example, coinsurances, co-pays and deductibles.)
They are not structured to pay for extra services like hearing, dental, vision, wellness or long-term care.
Do Medicare Advantage Plans Cover Hearing Aids?
All Medicare Advantage Plans are designed differently, but most of them offer benefits for exams and hearing aids. Depending on the plan, you may find covered, or partially covered, hearing exams. In addition, many plans will have co-pays or coinsurance on hearing aids.
As an example, one MA plan might offer 0% co-pay on a hearing exam and a co-payment on a hearing aid. They might have two kinds of hearing aids with different amounts you pay as your portion for either a standard hearing aid or a more advanced one.
Also, some Medicare Advantage Plans will contract with specific hearing aid companies to offer discounted or even fully covered hearing aids if you use these providers.
Summary & Action Steps
In summary, if you are in need of hearing aids, Original Medicare and Medigap Plans will not cover them. However, a Medicare Advantage plan often will.
With hearing aids often costing thousands of dollars, it can make sense to consider a Medicare Advantage plan where you can get discounted hearing benefits and hearing aids.
Carly Cummings is a licensed insurance agent and former FINRA licensed financial advisor. Carly is the Creator of MedicareLifeHealth.com where she helps her readers (of all ages) find the best health care and create the best cash flow in retirement. Carly has worked in finance and insurance for a Fortune 500 company as well as for a Berkshire Hathaway company. Before finance, she was an entrepreneur that owned a wellness licensing company and two yoga studios.
Your Introduction to the Medicare and You 2020 Book, and where to get a copy.
The Medicare and You 2020 Guidebook details what you need to
know about Medicare benefits for the current year. In it you will find the
basics of Medicare, how to get it, and what changes the program is implementing
in the calendar year.
However, it is 120 pages long and very detailed. It is also very dry and technical.
So, if you are trying to learn more about Medicare – without falling asleep in the process – we have on-topic website article suggestions for you here that follow the elements of the Medicare and You 2020 Guide.
Where to find the guide
If you would like to follow along with the Guide itself, you can find it online here: Medicare & You Handbook 2020
Related Article: For an illustrated overview of the four parts of Medicare, visit our medicare parts infographic and article “Medicare Parts A B C D.”
What are my Medicare options?
Intro Section on Original vs Medicare Advantage (pages 6-8)
Many online comparisons are between Medicare Supplements and Medicare Advantage plans as those are the additions that are in your hands to choose.
However, all these comparisons are in their simplest form between having Original Medicare vs Medicare Advantage. This section does a side-by-side comparison of the two (with or without a supplement).
Related Article: For a more in-depth discussion to help you decide what Medicare options are right for you, please read the “Medicare Advantage vs Medicare Supplements” article here.
How do I get Medicare?
“Section 1: Signing up for Medicare” (pages 15-24)
People get Medicare in different ways. Some are signed-up for it automatically if you are already receiving Social Security or Railroad Retirement. Some people must sign up for it when they turn 65 (or delay it if they are not ready at 65).
This section gives you people to call (Social Security at 1-800-772-1213) and places to visit (online at ssa.gov/benefits/medicare) if you need to sign yourself up.
Other topics covered include, when to sign-up, what to
sign-up for, and what does each part cost?
Hey, Medicare and You 2020, Will Medicare Cover My…?
“Section 2: Find out if Medicare covers your test, service or item” (pages 25-50)
This section lists all Medicare Benefits you will receive if you are signed-up for both Medicare Parts A and B. These benefits are universal, meaning they are the standards of care you will receive whether you are receiving Medicare from the federal government or through a private carrier with a Medicare Advantage Plan.
If you are looking to see if a specific benefit is included in Medicare, this is the section to search for it.
2020 New Offering Alert: One interesting change noted in the Medicare and You 2020 book is that many Medicare Advantage programs are now offering “telehealth” benefits where you can see a provider at home instead of at their facility. The guidebook notes that this is typically beyond what Original Medicare can offer.
Related Article: To see the basics of what Medicare Covers, please see our article “Medicare Parts A B C D.”
What exactly is Original Medicare?
“Section 3: Original Medicare” (pages 51-54)
The Original Medicare section explains how our Federal Health Insurance for Seniors works. If you have Original Medicare, with or without a supplement, you are a beneficiary of a nationalized health care system and the government is the primary payer of your health benefits.
Read this section to learn how that works and how to use your benefits once you are on Medicare.
“Section 4: Medicare Advantage Plans & other options”
Every year the government puts out a new Medicare Guide. Here is how to read it.
The other option than being on Original Medicare is to be on a Medicare Advantage Plan. In this case, a private insurance company becomes your primary payer and main contact. Medicare Advantage (MA/MAPD) Plans are called “bundled plans” because they combine parts A, B and D to form one “Plan C.”
They often have reduced costs for premium payments, with some of them even offering “$0” monthly premiums. In addition, they often include extra benefits, not included by government Medicare, such as dental, hearing and eye care. “Silver Sneakers” and similar fitness/wellness programs are also often an included benefit.
CLICK HERE to see more about the various Medigap plans and what they offer.
When you opt for keeping Original Medicare (instead of a Medicare Advantage Plan) you will most likely want to pair that with not just a stand-alone drug plan, but also with a Medigap Plan. These plans are also called Medicare Supplement Plans.
They are supplemental insurance plans that pick up paying where Original Medicare leaves off – such as with the 20% coinsurance, co-pays and deductibles.
The government sets the requirements for each supplement plan and then the private insurance companies decide what price they can offer for each plan in each market they are in. These plans are labeled with letters, and offer the exact same benefits no matter what private insurance company you choose.
“Section 7: Get help paying your health & prescription drug costs” (pages 83-88)
The government has set up several ways for Medicare Beneficiaries to get help in paying for their health insurance. Read this section to see if you qualify for the various tiers of assistance.
How can I protect myself?
“Section 8: Know your rights & protect yourself from fraud” (pages 89-100)
The U.S. government understands that health insurance can be confusing, and there are people out there that will try to take advantage of this confusion. Read this section to know how to protect yourself from health care and insurance fraud.
In addition, Section 8 also explains your rights under Medicare and how to make an appeal if you decide your rights have been violated. The Medicare and You 2020 book defines an appeal as “…the action you can take if you disagree with a coverage or payment decision by Medicare or your Medicare plan.”
How do I get my questions answered?
“Section 9: Get more information” (pages 101-112)
Next, if you have questions related to Original Medicare, the handbook offers you the following numbers to call:
1-800-MEDICARE (1-800-633-4227) TTY users call 1-877-486-2048 Get information 24 hours a day, including weekends
Medicare and You 2020
Additionally, for questions regarding insurance plans like Supplement (Medigap) or Medicare Advantage (MA/MAPD) then we suggested talking to a licensed insurance professional.
If you are lucky enough to live in our headquarters of Nebraska or our neighboring state of Iowa, you can give Carly a call/text or email.
Do you just live to read a good glossary? Well, here you go. You will find here definitions to all the health care and insurance lingo you need to know to navigate your health care effectively.
We hope our review of the 2020 Medicare and You Book has been helpful.
Our one hope for next year is that the book might be more helpful in pointing beneficiaries towards ways to find LICENSED independent insurance professionals that can help them in making decisions. These agents are the only ones required to stay licensed, tested and up to date on the plans that are out there. Moreover, this applies especially for the Medicare Advantage approved agents as they have to be re-tested every year on changes.
Finally, we are MedicareLifeHealth.com just don’t understand how people can be offering advice on plans – that change yearly – they have not be certified to explain.
Our advice? Find yourself a good agent, and make them work for you.
Further Medicare and You 2020 Topic Relevant Reading
Medigap, Med Sup, and Medicare Supplements Medicare Supplements have many names: Medigap Policies, Med Sup, Medicare Supplement Insurance. They all ... Read More
Carly Cummings is a licensed insurance agent and former FINRA licensed financial advisor. Carly is the Creator of MedicareLifeHealth.com where she helps her readers (of all ages) find the best health care and create the best cash flow in retirement. Carly has worked in finance and insurance for a Fortune 500 company as well as for a Berkshire Hathaway company. Before finance, she was an entrepreneur that owned a wellness licensing company and two yoga studios.
The 5 Biggest Medicare Mistakes and How to Avoid Them
No one wants to make a mistake that will cost them hundreds (or thousands) of dollars down the road if they can help it! However, Medicare can be very confusing, and even very knowledgeable people can miss things. Here are the five biggest Medicare mistakes people make, and how you can avoid them!
#1 in Our Biggest Medicare Mistakes: Missing Enrollment Deadlines
Although the government gives us all a little wiggle room around each Medicare Milestone we pass, there are certain deadlines you must mind to avoid late penalties and inconveniences.
Original Medicare Coverage Deadlines
You will need to sign-up for Medicare when you turn 65 if you are not already getting Social Security. You will be automatically signed-up for Medicare if you are getting Social Security. In addition, you will need to tell the government if you are delaying Medicare because of other credible coverage (such as an employers coverage).
You will have three months before your birthday to sign-up, the month of you birthday, and then three months after to sign-up. However, what some people do not understand, is that if you enroll after you turn 65, your coverage will not start until the first of the month after you enroll. This could lead to a gap in your health care coverage.
A NOTE ON CREDIBLE COVERAGE: Some people will delay Medicare coverage if they have a good health plan from their employer. This is usually okay, but there is an exception for small business employers to be aware of: If your employer has less than 20 employees, you will need to enroll in Medicare right away when you turn 65.
This is because when you work for a small business, their insurance will become secondary insurance and Medicare will be your primary payer. If this is the case, you will need to enroll right away in Medicare to avoid a penalty. (Also note that Cobra is not credible coverage.)
Medigap Guaranteed Enrollment Deadlines
The last Medicare Enrollment Mistake people make is missing their Guaranteed Enrollment period for a Medigap Plan. You will have six months, from the beginning of the month you first turn 65, to enroll in a Medigap plan with a guarantee to be issued a policy. If you apply after this window, you will have to go through medical underwriting. This means that companies have the right to deny issuing you a policy based on your medical history after your open enrollment is over.
It is important to remember that Medicare Advantage Plans have a different enrollment process than Medigap. The Medicare Advantage Annual Election Period is not for Medigap Plans. Which lead us right into Mistake #2…
Medicare Mistake #2: Not Understanding Medigap Plans vs. Medicare Advantage Plans
There are two main ways you can set up your Medicare Health Care Plan: Medicare Advantage (Part C) and Original Medicare with a Medigap Plan. You either have one or the other, not both. Both can be good ways to set up your health care, but not understanding how they work can lead to making on of our biggest Medicare mistakes.
We have a whole article on Medicare Advantage vs. Medigap Plans here. I suggest reading it if you are unfamiliar with the two plan types. Considerations with these plans include how you get your Prescription Drugs and how you want to budget your money. Cash flow can be different plan to plan with premium payments and out of pocket expenses to consider when making a decision. Your lifestyle needs and travel patterns also need to be considered when making a choice between MA and Medigap.
Mistake #3: Assuming Your Doctors and Drugs are Covered
We all know what assuming can lead to… mistakes! It is very important to make sure that your doctors are covered with the Medicare option you choose. The carrier will be able to help you confirm that you will be able to continue with your current doctor if you so desire. If you are working with an Insurance Agent, they will have the ability to do this for you as well.
Checking your drug options with a plan is also an important part of finding coverage. The government does make sure that at least two kinds of drugs are available per category of treatment. Moreover, carriers will have a process for you to make an exception for a drug not on its list (called a formulary). However, it makes for a smoother transition to check ahead of time to see what is covered for your specific needs.
Biggest Medicare Mistake #4: Assuming Medicare Covers Long-Term Care
It is a common mistake to assume that your Medicare coverage includes long term care – it does not. Skilled nursing facilities for recovery from a certain event are covered (and come with different co-insurances based on different plans). However, long term stays in assisted living and nursing homes are not covered. You will need to have a plan in place to cover these needs. Your planning may include, long term care insurance, IUL policies with long term care (or critical illness) riders, or self-insurance (paying cash).
Another option, for those that do not have a lot of resources saved up for retirement, is to “spend down” your assets to qualify for Medicaid to help you in paying for your care. However, I would not suggest this option for those that have the means to plan ahead for the level of care they desire or those that want to pass money on when they pass.
Biggest Medicare Mistake #5: Enrolling Directly with a Carrier
Ok, follow me on this one. When you first turn 65, you are bombarded with advertisements for different Medicare plans. Sometimes, it feels easiest to just pick up the nearest postcard and give that insurance company a call. Or maybe you have done your research on your own (which is just fine!) and decide to enroll directly with the carrier you want to go with. Here is where you should stop and consider this as a mistake.
Here is the problem: when you enroll with an insurance company for one of their plans directly, you have to deal with them alone. On the other hand, when you enroll with that same company through an independent insurance agent, you now have an advocate and support system to help you work with that carrier.
Here is how an independent agent helps:
First, if something goes wrong, you can call your agent for help! You are not on your own, and this is a big deal. As we all know, everyone can make mistakes – you, your doctor’s office, your insurance company. When these mistakes happen, you can call your agent for support and they can work with you and the insurance company to make sure you are taken care of.
Second, rates and plans change! A good independent agent will keep on top of industry changes and plan changes for you. They can stay on top of your premium rates and what might be new or changing in your area to make sure you always have the best coverage. You will not get this level of service when you work directly with a carrier.
Finally, you do not pay anything extra for working with an independent agent. They are still paid as an independent agent from Whichever company you are placed with at no charge to you.
Carly Cummings is a licensed insurance agent and former FINRA licensed financial advisor. Carly is the Creator of MedicareLifeHealth.com where she helps her readers (of all ages) find the best health care and create the best cash flow in retirement. Carly has worked in finance and insurance for a Fortune 500 company as well as for a Berkshire Hathaway company. Before finance, she was an entrepreneur that owned a wellness licensing company and two yoga studios.
Medicare costs can be different person to person, depending on which type of plan you choose. After you have a basic understanding of Medicare and it’s basic components, you will want to know how much does Medicare cost? The answer is, it depends on how you structure it. Let’s break down what you could be paying.
Medicare Costs Broken Down & Made Simple
When you set up your Medicare, you will decide if:
Medicare Part A – For most people, there is not a cost or premium you pay for Part A. Your Part A is premium free if you worked in the US and paid Medicare taxes for at least 30 quarters. (You will pay between $240 – $437 a month depending on your work history for Part A if you do not meet the premium free requirements).
There is also a $1,364 yearly deductible for Part A services and coinsurance tiers on hospital stays.
Medicare Part B – You will pay a premium for Part B. In 2019, the standard premium is $135.50 per month. If you make more than $85,000 a year in retirement, you will pay more on an income dependent scale.
There is also a $185 Part B deductible and a 20% coinsurance (co-pay) for most approved services.
Late penalties may also apply to Part B (and less commonly, Part A) if you do not sign-up when you are first eligible.
How Much Prescription Drug Costs
Medicare Part D – Prescription Drug Coverage needs to be obtained from a private insurance company. Each company will price their service differently and you can shop for the best plan and price for you. In addition, you will pay more for your Part D coverage, on a sliding scale, if you make more than $85,000 a year while on Medicare.
Other costs to consider with your Part D coverage are co-pays and coinsurance, in addition to deductibles.
There are also late enrollment penalties associated with not signing up for Part D coverage when you are first eligible if you do not have “credible coverage.”
How Much Medicare Supplements or Medicare Advantage Plans Cost
On top of your Original Medicare, you will need to make a decision to either participate in a Medicare Advantage (Part C) plan or to consider having a Medigap (Medicare Supplement) Plan. If you need help deciding on which one is best for your needs, please read our article on Medicare Advantage Vs. Medicare Supplements.
Medicare Supplement Plan Costs – Medicare Supplements will each have a different cost depending on the Letter Plan you choose and the company you go with. The government decides what benefits are offered by each letter plan. Then, each private insurance company decides what price they can offer for each plan in each market. It is a good idea to compare multiple plans by multiple carriers (insurance companies) in your area before choosing a plan. An independent insurance agent will be able to help you do this.
Medicare Advantage (MA/MAPD) Costs – Part C, or Medicare Advantage Plans are also offered by private insurance companies and stand in place of Original Medicare. In addition, they often include Part D Prescription Drug Coverage. Some of these plans have low or zero premium plan options. A few even cover Part B premiums. All of them are required to have max out of pocket expenditures and deductibles. It is a good idea to talk to an independent insurance agent on MAPD plans in your area to help you choose your best option.
Medicare Costs Summary
In summary, Medicare will cost you something, unless you are on full benefits from Medicaid. Moreover, you have already been paying into the Medicare system during your working career with Medicare taxes. Common set-up for Medicare beneficiaries include:
Having Original Medicare, Part A Premium Free, Part B Premium at $135.50 /month and a stand alone Part D Premium to pay. Then, adding on a Supplement Plan to cover the expenses Original Medicare does not pay.
Or having a Part C Medicare Advantage Plan that includes a drug plan with a premium to pay (sometimes a $0 premium). Most commonly, you will still pay your Part B premium with Medicare Advantage.
Get More Help Understanding How Much Medicare will Cost You
One good resource for learning more about the costs of Medicare is the Medicare and You Book published by the government every year. It is a large book, so please star with our Medicare and You User’s Guide to learn what it offers and to get a copy if you need one.
In addition, finding the best Medicare options for your budget can be a lot to take on, but hopefully this breakdown is helpful. I strongly suggest talking to a professional to help you in setting up your Medicare plan. As an independent agent myself, I suggest using an independent agent. They are not tied to one company, so they work for you, not one carrier and can help you in considering many different carriers and plans.
As always, if you live in Nebraska or Iowa, please give me a call, and I can help you out either in person or over the phone.
Carly Cummings, NE/IA Licensed Independent Insurance Agent for Life and Health.
Carly Cummings is a licensed insurance agent and former FINRA licensed financial advisor. Carly is the Creator of MedicareLifeHealth.com where she helps her readers (of all ages) find the best health care and create the best cash flow in retirement. Carly has worked in finance and insurance for a Fortune 500 company as well as for a Berkshire Hathaway company. Before finance, she was an entrepreneur that owned a wellness licensing company and two yoga studios.
Medicare Advantage vs Medicare Supplement (Medigap): What Medicare Plan is Best for Me?
I am a firm believer that there is a good Medicare health plan out there for everyone. Moreover, there might even be more than one good choice out there for your situation. If there is more than one good choice available to you, you might be weighing your options right now – Medicare Advantage vs Medicare Supplement.
First, Let’s review your Medicare options:
Original Medicare (no supplement)
Certainly, stand-alone Medicare coverage is an option. You would still want to get Part D Prescription coverage. (There are penalties down the road if you do not get Part D or have credible coverage already and then want to get it later.) However, you would then be left paying your deductibles and 20% coinsurance out-of-pocket.
For example, with ONLY Original Medicare and NO supplement or MA plan, if you ended up having a major health event like a surgery, the 20% left that medicare doesn’t pay could still be thousands of dollars.
You would also have to go through medical underwriting with a private insurance carrier if you later want a supplement and you have missed your Guaranteed Issue time frame. You can always join a MA plan later, but only during a special enrollment period or during the Annual Enrollment Period (Oct. 15 – Dec. 7).
With this option, you keep Original Medicare and add on a Supplement (Medigap) Policy with a private insurance company to help you in paying the pieces that Medicare does not. These costs can become large if you have a big medical event or a chronic illness. In this instance, a Supplement would protect you from “losing the shirt off your back”! You would also have a stand-alone Part D Prescription Drug Plan (or a plan that is considered “credible coverage”).
Finally, with a MA/MAPD plan you would replace Original Medicare with a bundled plan offered by a private insurance company. These often include a Prescription Drug Plan. (These are called MAPD plans, which are most the common plans). You still “have Medicare” with these plans. However, they are run by private companies who put together networks of providers and health facilities.
One question we hear a lot is, “can I have both Medicare Advantage and a Medicare Supplement?” No, you have one or the other. Not both, they do not work together and it is illegal for anyone to sell you both.
What are the Differences Between having a Supplement (Medigap) and having Medicare Advantage (MA/MAPD)?
Now, let’s do a breakdown of Medicare Advantage vs. Medicare Supplements. First, let’s look at the difference in care and the differences in cost. We are assuming you either have Medicare Advantage or Original Medicare with a Supplement (aka Medigap Plans).
Medicare w/Medigap
Medicare Advantage
Care Options
You can go to any doctor that accepts Medicare already. Specialist referrals are not needed.
Some plans include extra benefits such as hearing, dental, vision and fitness/wellness programs.
Monthly Costs
Medicare Part A – usually premium free Part B – Monthly Premium (based on income level) Part D – Monthly Prescription Premium Supplement – Premium dependent on which company & plan letter you choose
MAPD plans with Drug Coverage Included pays a monthly premium to the insurance company for all services. Some plans include the Part B Premium and some plans do not. Some plans have a $0 monthly premium option.
Out of Pocket Costs
Costs can be very minimal depending on that Medigap plan you choose. There are high deductible options, and starting in 2020, the Part B deductible will have to be paid by everyone who is just aging into Medicare.
Some plans have lower out-of-pocket costs than Original Medicare and all have a yearly limit on out-of-pocket expenses that are covered by Medicare.
Domestic Travel
Emergency and urgent care are always covered in the US. You can use any doctor that takes Medicare in the US for routine visits. If you spend long periods of time traveling and need to see a doctor for routine visits whole out of town, this might be your best option.
Emergency and urgent care are always covered in the US. You will have to use doctors in network for routine visits for them to be covered. Some insurance companies have large networks that can span several states, so make sure to inquire about how large the network is before you rule out a MA plan if you travel a lot.
Foreign Travel
Some supplement plans cover part of the emergency medical fees you may use in other countries. Plans C, D, F, G, M & N have 80% foreign travel exchange limits.
Plans do not typically have any over seas coverage.
Making Your Choice between Medicare Advantage vs Medicare Supplement
Now that you understand the basics of Medicare Advantage Plans and Original Medicare plus a Medigap (Supplement) Plan and know the significant differences between the two, it’s decision time.
First, I always recommend speaking with a licensed, independent agent that can help you in assessing all the various plan types available in your area. Every county has different options for MA/MAPD plans, and insurance carriers have different prices on the supplement plans you may be considering.
Second, it’s good to have an idea of what is important to you. You should be thinking specifically in regards to money and lifestyle when choosing a path.
Consider these questions when choosing between Medigap and MA Plans:
Do you plan on living in another place for a significant period of time during the year?
If you are a “snowbird” or are planning a longer vacation where a routine doctor visit may be necessary when away from your primary residence, then a supplement may be your best choice. Remember though, emergency / urgent care visits are covered with both types of plans.
However, if your travel happens to be international, Both Original Medicare and MA plans do not cover foreign travel, but some supplement plans (plans C, D, F, G, M & N) have 80% foreign travel exchange limits that will help off-set some costs.
What is (or will be) your cash flow situation in retirement?
Some retirees have pensions, social security and other payments (like annuities) that come to them automatically each month. Other retirees have less of these automatic infusions or smaller required distributions and prefer to leave as much of their cash in investments as possible. Finally, some retirees are on a smaller, fixed income. This might require them to consider cash flow very carefully.
In each situation, you will need to review how you are paying for your health services, as each plan offers different payment options.
Cash Flow with a Supplement:
With a supplement, you will have a set amount of money (that could be a larger sum than an MA plan) come out of your bank (and/or S.S./R.R. check) each month. This can add up when you consider it includes Part B premiums, Part D Prescription premiums, and your supplement premiums. However, if you chose a plan that covers everything Original Medicare leaves out, then you would not pay any other out-of-pocket fees for Medicare covered services.
Cash Flow with a MA/MAPD Plan:
With a Medicare Advantage plan, you will most likely have a smaller amount of money coming out of your wallet each month. You will most likely have an MAPD plan that includes your drug plan, as stand alone MA plans are becoming much more rare, and some plans even include Part B premiums. So, with a MAPD plan, you would be paying a MA premium and maybe your Part B premium each month. Moreover, there are sometimes zero dollar per month ($0/month) premium MA plans available. The costs then to consider and maybe budget for with MA plans is if there are any co-pays, co-insurances and deductibles with the plans. Each plan will be set-up differently, and each plan will also have a max yearly out-of-pocket limit.
Just like in any kind of insurance, Medicare plans are set-up to allow you to choose how much out-of-pocket expenses you incur versus monthly premiums you pay.
Looking at your budget and then talking through your options with a licensed agent will allow you to make the best choice for your situation.
How interested are you in extra benefits being included?
Finally, one more consideration is the other elements that round out your health insurance plan, such as dental, vision, hearing, etc. If you have a supplement plan, you will need to decide if you need these services, and if you do, are you wanting to take on insurance plans for them. You might decide to add on a stand-alone, or a plan that includes any or all of these common services (dental, vision, hearing).
Often times, Medicare Advantage plans will include these services as a part of their plan as an additional benefit which might save you money if you were planning on getting a stand alone plan or paying cash for these services.
Moreover, many MA plans will offer fitness or wellness services that are included at no additional cost. Sometimes this means you will not have to pay for a separate gym membership. Silver Sneakers is one example of a national program that is used by many MA plans to provide fitness and wellness services.
The Next Steps for Choosing Your Medicare Plan
As you can see, developing your Medicare Health Insurance Plan can be very involved, but I am confident you can do it! Having a professional to help you through the process is important. Please reach out to an independent insurance agent to review what is available in your area. They will be able to explain plans in specifics and answer your questions about Medicare Advantage vs Medicare Supplement.
Finally, Medicare.gov is also a good tool for answering your broader questions, and we also encourage you to comment on this page or contact us directly with any questions. Thanks!
Carly Cummings is a licensed insurance agent and former FINRA licensed financial advisor. Carly is the Creator of MedicareLifeHealth.com where she helps her readers (of all ages) find the best health care and create the best cash flow in retirement. Carly has worked in finance and insurance for a Fortune 500 company as well as for a Berkshire Hathaway company. Before finance, she was an entrepreneur that owned a wellness licensing company and two yoga studios.
In this article, we look at what is Medicare Advantage (aka Medicare Part C). As we discussed in our Medicare 101 Post, there are two different Medicare paths. You will choose one when you are setting up your health care in retirement.
Path One = Original Medicare, Part A and Part B, with a stand alone Prescription Drug Plan (Part D) and an optional Medigap (Medicare Supplement) Plan.
Path Two = Medicare Advantage (Part C) that replaces Medicare Part A and Part B and typcially includes a Part D Drug Plan. These plans are offered by private insurance companies that you work with directly.
The Basics of Medicare Advantage
Medicare Advantage “bundled” plans are offered by private insurance companies (carriers). You use them IN PLACE of Original Medicare, but they are still Medicare. Moreover, they must include all the same Medicare services covered by Part A (hospital) and Part B (medical). In addition, almost of them include Part D (prescription drugs).
You will hear/see these plans referred to as MA plans, and MAPD plans when they include prescription drugs.
What is the Advantage to Choosing a MA or MAPD plan?
The first advantage to these plans is that many of them have lower out-of-pocket costs than Original Medicare. Secondly, they often have extra benefits such as dental, vision or hearing that is not included in Medicare.
There may be many (or just a few) different MA and MAPD plans available in your area. They will all be set up differently and cost different prices from carrier to carrier. We suggest finding an independent insurance agent/broker that can compare different plans, carriers (insurance companies) and prices. They will help you pick a plan that fits your lifestyle and financial needs. Please note, there are often plans out there that have low or even $0 monthly premiums.
In addition to whether or not you pay a monthly premium with a MAPD plan, each plan will have a different set up for out-of-pocket costs:
You will need to decide what plans fit well with your monthly cash flow situation in addition to how often you need medical products and services.
How do MA and MAPD Plans Work?
Insurance companies usually set-up Medicare Advantage programs as a PPO or HMO networks. You might be familiar with this style of network plan insurance if you had (have) one from an employer or even from the open marketplace.
Typically, you will need to use doctors in your MA plans network. (Unless it is an emergency, or unless you are willing to pay extra to go “out-of-network”). If you have providers you want to keep, ask them if they are part of a network you are considering. In some MA/MAPD plans, you may also need referrals to see specialists. These are all plan specific requirements. You will need to look all these requirements prior to making your MA decisions.
HMO and PPO plans have much more robust networks now than plans from the past. Most people can find a plan that is large enough/flexible enough to work with their lifestyle. This is true even if they travel frequently in retirement. I recommend talking to a licensed agent to make sure you understand how the plans work.
When Can You Sign-up for a Medicare Advantage Plan?
If you are a US citizen with both Part A and Part B Medicare coverage, you can join MA plans in your area during these times:
During your Initial Enrollment Period (IEP): Just like joining Original Medicare, you can join a MA plan during the 7 month period (3 months before the effective date of Medicare Part A and B, including the month Medicare begins, and then 3 months after) of time that you are turning 65.
During the Annual Enrollment Period (AEP): October 15th to December 7th, is when you have the opportunity each year to join an MA/MAPD plan. Your new coverage will begin January 1st.
*OEP – As of 2019, if you are already in a Medicare Advanage plan, you can also change plans during AEP, or you can switch plans once (or switch back to Original Medicare) during Open Enrollment Period – January 1st to March 31st.
Other things the US Government would like you to know about MA Plans:
Emergency and Urgent Care is always covered with MA plans.
MA plans cover all Original Medicare Services and carriers must follow all Medicare rules.
MA plans may have extra benefits like vision, health, dental and other fitness/wellness programs.
Who can Help You with a Medicare Advantage Policy?
Just like a supplement, you can compare these plans online, but I suggest you talk to a professional, independent insurance broker that can help you compare plans. It won’t cost you any more money to use a professional, and Medicare Advantage Plans can be overwhelming when you are trying to pick one, especially if there are many offered in your area.
Remember, independent agents work for you (not the carriers), and having an actual person to help you in communicating to insurance carriers and keeping you updated each year is very valuable. This is something you do not get if you sign-up directly with a company online.
Carly Cummings is a licensed insurance agent and former FINRA licensed financial advisor. Carly is the Creator of MedicareLifeHealth.com where she helps her readers (of all ages) find the best health care and create the best cash flow in retirement. Carly has worked in finance and insurance for a Fortune 500 company as well as for a Berkshire Hathaway company. Before finance, she was an entrepreneur that owned a wellness licensing company and two yoga studios.
Medicare Supplements have many names: Medigap Policies, Med Sup, Medicare Supplement Insurance. They all refer to the optional insurance coverage taken on by Original Medicare participants. The coverage helps them in covering costs that the Medicare does not pay. For example, Medicare Part A leaves 20% of costs to participants as coinsurance. Co-pays or coinsurance is an out-of-pocket expense.
There is no penalty to not having a supplement. (Unlike not having a Medicare Part D Prescription Drug plans, which does have penalties down the road if not adopted right away.) However, most seniors will opt to have a Medicare Supplement Plan with Original Medicare. This is because, out-of-pocket expenses can get, well expensive, as we get older each year.
What Does a Medicare Supplement Policy Cover?
The U.S. government standardizes Medicare Supplement Policies. (This means every insurance company will offer the same benefits for each plan.) In addition, the government differentiates each plan with Letters (i.e. Plan F, Plan G, etc.). They all cover a different combination of benefits including coinsurances, copayments and deductibles.
Notes on The Letter Plans
According to Medicare.gov, Plan F also offers a high-deductible plan where you pay for Medicare-covered costs up to the deductible amount of $2,300 before your Medigap plan pays anything.
Note, with Plan N pays 100% of the Part B coinsurance, except copayments apply.
Beginning January 1, 2020, Medigap plans sold to new people with Medicare won’t be allowed to cover the Part B deductible. Because of this, Plans C and F will no longer be available to people new to Medicare starting on January 1, 2020. If you already have either of these 2 plans (or the high deductible version of Plan F) or are covered by one of these plans before January 1, 2020, you’ll be able to keep your plan. In addition, if you were eligible for Medicare before January 1, 2020, but not yet enrolled, you may be able to buy one of these plans.
Finally, if You live in Massachusetts, Minnesota, or Wisconsin, plans are different, please visit this page.
What Doesn’t a Medicare Supplement Policy Cover?
Typically, Medicare Supplements do not cover long-term care (nursing home), vision or dental, hearing aids, eyeglasses, or private nursing.
How to Get a Medicare Supplement Policy
First, you must age into Medicare. Then, you have a window of time where you are guaranteed to be accepted into a Medigap Plan. We call this window your Medicare Supplement Open Enrollment Period. In addition, there are special enrollment times for retirees coming off of another plan. One example is if you are over 65, but still employed. In this instance, you would wait until you end your employee health plan to sign-up for Medicare and a Supplement.
Open Enrollment guarantees private insurance company cannot decline your application during this time. This period starts “the first day of the month in which you’re 65 or older and enrolled in Part B” (Medicare.gov). (Note that some states may have additional Open Enrollment Periods as well).
Who can Help You with a Medigap Policy
You can compare these plans online, but I suggest you talk to a professional, independent insurance broker that can help you compare prices and help you understand each plan option. It won’t cost you any more money to use a professional, and Medicare is an ever-changing landscape that independent brokers can help you navigate.
Brokers work for you (not the carriers). As a result, you gain the valuable ability to communicate through them to insurance companies. In addition, your broker will keep you updated on any changes each year. This is something you do not get if you sign-up directly with a company online.
With government plan changes and carrier price changes, it makes sense to stay on top of things and to “shop” your supplements while you are still healthy enough to get through medical underwriting if you want to change policies or companies when you are not in an Open Enrollment. As an Independent agent myself, I make sure to stay on top of what my clients are paying and what the market has available so that my clients are always getting a good value with their supplements.
Carly Cummings is a licensed insurance agent and former FINRA licensed financial advisor. Carly is the Creator of MedicareLifeHealth.com where she helps her readers (of all ages) find the best health care and create the best cash flow in retirement. Carly has worked in finance and insurance for a Fortune 500 company as well as for a Berkshire Hathaway company. Before finance, she was an entrepreneur that owned a wellness licensing company and two yoga studios.
