Medicare plans are designed to provide health insurance coverage to people who are 65 years old or older. These plans cover medical care expenses such as doctor visits, hospital stays, prescription drugs, and other services.
There are two types of Medicare plans: traditional and Medicare Advantage. Traditional plans are offered by private companies and are often referred to as “fee-for-service” plans. They offer basic benefits and cover only certain services.
Traditional Medicare vs Medicare Advantage
Medicare Advantage plans are offered by private insurers and are usually called “managed care” plans. They are similar to traditional plans in that they also cover certain services, but they also offer additional benefits. For example, they may cover dental insurance and vision care, and they may even pay for prescriptions.
Traditional Medicare is a program run by the federal government. It provides you with an annual premium plus your Part A deductible, which covers most covered costs upfront. You then have a choice between paying either $250 or $350 toward your Part B deductible each month. The rest of your Part B cost will be covered by Medicare after it has been deducted from your Social Security check. Traditional Medicare is a program run jointly by the federal government and state governments. It offers you an annual premium plus your deductibles and coinsurance. Your premiums go into a trust fund, so there’s no need to worry about running out of money when you’re sick. After you’ve paid your deductibles and coinsurance, Medicare pays all remaining bills on your behalf.
The difference between traditional Medicare and Medicare Advantage is how much control the plan gives doctors and hospitals over what treatments they receive. With traditional Medicare, if you see a specialist, he or she must accept referrals from primary physicians. If you don’t like the referral, you can choose another one. But under managed care, specialists work directly with the insurer instead of through their own office staff. This means that the insurer decides whether to approve treatment requests. In addition, some managed care plans require patients to get approval before seeing any new providers. And many plans limit access to particular procedures.
The main advantage of traditional Medicare is its affordable insurance. Because it doesn’t charge extra fees for things like eyeglasses, hearing aids, or physical therapy, it typically costs less than half as much as comparable commercial policies. However, because traditional Medicare does not include extras like dental and vision care, it might not be right for everyone. Also, unlike commercial policies, traditional Medicare won’t help pay for long-term nursing home care.
If you decide to switch from traditional Medicare to a Medicare Advantage Plan, make sure you understand exactly what kind of coverage you’ll get. Some plans do better at covering preventive care while others focus more on treating illness. Make sure you know what kinds of restrictions apply to your policy.
You should consider switching to a Medicare Advantage Plan if you want to avoid high monthly premiums and copays. Many seniors find these plans easier to manage financially than traditional Medicare. Plus, since Medicare Advantage plans are generally cheaper than traditional Medicare, you could save hundreds of dollars per year.
But keep in mind that Medicare Advantage plans aren’t always available everywhere. So if you live outside of areas where Medicare Advantage plans are offered, you still have options. For example, you may qualify for Medicaid. Or you may be able to buy supplemental Medigap insurance.
A Medigap policy helps fill gaps left by Medicare. Unlike Medicare Advantage plans, they usually come with higher premiums but lower co-pays. Most states allow residents to purchase this type of insurance without having to first enroll in Medicare. To learn more about buying supplemental insurance, visit our page on How to Buy Supplemental Health Coverage.
Types of Medicare Supplement Policies
Supplemental health insurance comes in several different forms. Here we explain three common ones:
• Original Medicare – Provides additional health insurance benefits to those enrolled in Original Medicare.
• Extra Help – Offers discounts on brand-name medications.
• Private Fee-For-Service – Covers specific conditions and/or surgeries
Original Medicare covers most routine healthcare needs. It includes Part A and Part B. The cost of Part A varies depending on which state you live in. You also need to meet income requirements to qualify for Part B.
Extra Help provides discounts on brand name prescriptions. It’s similar to an HSA except that it offers savings based on the amount spent rather than the total value of all covered items.
Private fee-for-service plans are sold exclusively by insurers which means there isn’t any competition among providers when choosing one plan over another. But some doctors don’t accept them so check before signing up.
How Much Does Medicare Insurance Plan Cost?
In 2017, the average annual premium was $1,871. That works out to around $10,000 over 10 years. If you’re under age 65, you can use tax credits to reduce your payment. And if you earn too little money to qualify for subsidies, you can still receive financial assistance through the Low-Income Subsidy program.
To see how much you’d spend each month using various combinations of deductibles and coinsurance rates, try our calculator.
What Are My Choices With Medicare?
When deciding whether to stay with traditional Medicare or sign up for a Medicare Advantage Plan, here are four factors to think about:
Cost – What will my monthly premium be? Will I get help paying for it?
Benefits – Which benefits do I currently have access to? Do I like what I’m getting now?
Quality – Is the care I’ll receive at least equal to what I’ve had in the past? Can I afford to go elsewhere?
Choice – Am I satisfied with my current provider network? Would I prefer to switch?
If you decide to stick with traditional Medicare, you might not have many choices. In fact, you could end up being stuck with just one option. However, if you choose a Medicare Advantage Plan, you should find plenty of options. Some plans even include dental and vision coverage.
With both traditional Medicare and Medicare Advantage plans, you pay fewer thousands of dollars upfront because you won’t have to pay until after receiving treatment. Plus, these policies typically require fewer restrictions on where you seek care from. So if you want flexibility, consider switching to either type of plan.
The cost of healthcare in Palm Desert or in any other city in the United States is expensive. Medicare Supplement plans are designed to fill the gap between what Medicare covers and what you pay out of pocket. They may also provide additional benefits such as vision and dental. If you’re looking to supplement your Medicare coverage, you’ve come here. Healthbridge Insurance Solutions can help you choose the plan that best fits your needs. Our popular services have comprehensive coverage including consultation for life insurance, affordable healthcare plan, critical illness insurance, accident insurance, adult day care, business insurance, and other insurance options available in Palm Desert and throughout Southern California. Call us today to learn about Medicare supplements and Medicare plans.