While trying to help our parents with their medical issues, we all struggle to understand Medicare. The more questions we ask about Medicare, the more confusing it gets. But eventually you’ll get it!
It can be extremely challenging to make the best decision for our parents so we’ve sectioned it to ensure that you have a better understanding of a Medicare Supplement plan and what Medicare Advantage can offer in contrast to Original Medicare.
Your Parent Has Medicare Part A And Part B Or Medicare Part C
The first thing to do is find out if your parent has Medicare. If they haven’t enrolled in it yet, all your options are open. But make sure you enroll then during the Open Enrollment period because otherwise you’ll be fined indefinitely. You must keep in mind that Open Enrollment is six months long and starts at the beginning of the month your parent turns 65. It is important that you enroll your parent in Medicare Part B within this time frame and then you can choose if you want to choose regular Medicare (Part A) or Medicare Advantage (Part C).
The government subsidized plan, Original Medicare consists of two parts: Medicare Part A and Part B. Expenses of hospital care and post-hospital care (for instance, in a nursing home), are covered by Part A. On the other hand, Part B has a monthly premium that is deducted straight from your Social Security payments every month.
If your parent is on Medicare, you get to choose between Part A and Part C. Also known as Medicare Advantage, Part C can be bought after you’ll be enrolled in Part B. With the Advantage plan, you will have two monthly premiums for Part B and C but it would be private and not subsidized by the government as in the case of Part A. Considering all other costs, you wouldn’t necessarily pay more for one than the other. So it is essential that you consider all the factors, such as copays and coinsurance in addition to your prescription drug plan, which is already covered in Medicare Advantage.
Once you’ve figured out the estimated costs, you can start comparing Medicare Advantage to Medicare Original. The major difference is that the two plans are managed differently plus Medicare Advantage covers prescription drugs while you will have to buy a prescription drug plan from Medicare Part D in addition to Original Medicare.
One thing to understand here is that your premiums for Medicare Advantage would be higher as compared to Original Medicare while your out-of-pocket expenses would be lower. Plus there is a limit on out-of-pocket expenses with Medicare Advantage while that isn’t the case with Medicare Original. So if you have the latter, you may be paying a lot more if you get very sick.
There is a way to manage these out-of-pocket expenses and that is by buying Medicare Supplements or better known as, Medigap.
What Is Medigap (Medicare Supplements)?
If you’ve bought Original Medicare, you may want to invest in Medicare Supplements since they help pay a lot of out-of-pocket expenses like copayments, coinsurance and deductibles, which usually go hand-in-hand with Medicare. Medigap is Medicare Prescription Drug Plans or Part D. You can choose to buy both Part D prescription drug plan and other Medigap from the same private insurance company.
Medicare supplements are actually standardized plans with an alphabet assigned to them from A to K. For each letter category, the plans have the same standardized benefits, which basically means that you will not get anything more from one insurer than the other. What differs is the cost so it is important to compare Medigap rates before buying.
Which Medicare Supplements Should I Buy?
As we’ve explained before, every company will offer the same benefits in each type of supplement. You just need to check what kind of coverage your parent needs. You have the choice to add more supplements as you go but make sure that you are doing this during Medicare Open Enrollment in fall, October 15 to December 7. It is crucial to compare Medigap rates before you invest in a plan.
When Can I Buy Medigap?
It is important to note that you can only buy Medigap with Original Medicare and not with Medicare Advantage. You can expect better rates and more choices during the Medigap Open Enrollment Period, which lasts six months after starting from the month you turn 65. You need to ensure your enrollment in Part B during this time frame, otherwise you’ll be penalized for the remaining time you are insured. After you are enrolled in Part A and B, you can buy Medigap but in certain areas, you can buy Medigap any time as long as you are already enrolled in Part A and B.
Are There Two Medicare Open Enrollment Dates?
We’ve already discussed about the 6-month Open Enrollment when you turn 65 but there are two more chances to enroll! You can enroll from October 15 to December 7, every fall. During this time, you have the opportunity to switch from Original Medicare to Medicare Advantage, or vice versa.
You get a third chance with Medicare Advantage open enrollment that runs from January 1 to March 31. People on Medicare Advantage can switch to Original Medicare (along with a Part D plan if they like) or even switch to a different Medicare Advantage plan. But it isn’t possible for enrollees to switch from Original Medicare to a Medicare Advantage plan in this time period.
What’s Medicare Advantage?
Medicare Part C or as it is popularly known, Medicare Advantage, is a replacement of Original Medicare with a private plan. But before you try to buy this, you need to qualify for Medicare and enroll yourself in Medicare Part B. People often confuse Medicare Advantage with Medicare Supplements but it is important to know that while the former is an alternative to regular Medicare, you get helped in paying out-of-pocket expenses with Medicare Supplements if you are on regular Medicare.
How Medicare Advantage Works
You select a company that offers the plan and you pay a fixed amount every month for your coverage. All the companies offer the same protections and rights since they all follow Medicare’s coverage rules. You may note that some Medicare Advantage plans cover vision, dental, hearing and even wellness programs. Plus there is also a limit to how much you pay out-of-pocket each year.
Can Medicare Supplements Be Bought With Medicare Advantage?
You cannot have both, Medicare Advantage and Medigap. You have to choose between the two because Medigap only works in addition to Original Medicare (Part A and B).
Warnings About Changing Medigap Policies
You may want to switch your parent’s Medigap policy or may even consider replacing their Original Medicare with Medicare Advantage. It will work out just fine as long as you are careful about the timing.
In case you drop your entire Medigap policy and the drug coverage wasn’t creditable prescription drug coverage, then you will have to pay a late enrollment fee. You will be fined if it takes 63 days or more for your new Medicare drug coverage to begin. The idea is to make this transition seamless.
Since you have to buy Medicare Advantage from a private insurer, it would be best to compare the rates in advance.
Is Medicare Part D Private Insurance?
Part D or Medicare prescription drug plan is provided through private insurers. Even though these companies have contracts with the government, the plan itself is provided through the companies that sell Medigap and prescription drug plans. You will also be paying the premium directly to the insurance company.
If you have chosen Medicare Advantage over Original Medicare, then you will probably not have to buy Part D because your prescription drug plan will be included anyway.
Having a plan in place is very important because prescription drugs tend to be very expensive and you don’t want your parent to bear such back breaking out-of-pocket expenses.