What Do I Need to Know About Medicare?
(Credit for this post goes to Rehberg Law Group. More information about Rehberg Law Group can be found at the bottom of this page.)
Traditional Medicare is the insurance plan offered through the federal government and includes a Part A and Part B component. Medicare Part D is the prescription drug coverage. Medicare supplemental insurance, such as Plans E, G, and F, are the plans which assist in covering the costs left uncovered by Part A and Part B.
Part A is limited to hospital bed coverage only and applies to most people who have some work history, Part A coverage will not cost anything. Part B covers physicians and out-patient visits. The cost of Part B will depend on your income, but for most retirees’, Part B currently costs $134 a month. Part B also provides for 80% of the medical costs. Drug coverage is provided for in Part D, and depending on the type of plan, the monthly premiums range from $20 to $80 a month. The monthly premiums for the supplemental plans, such as Plan E, G, or F varies greatly based on the deductible amounts, co-pay options, and coverage amounts. The purpose of the supplemental plans is to assist in covering the costs of the 20% uncovered by Part B, as well as deductibles and co-pays. Plan F provides for the greatest amount of coverage, and will cover all of the 20% (that is not covered by Part B) as well as the majority of co-pays and deductibles. In 2017, the highest monthly premiums for Plan F are around $250 a month.
Med-Advantage plans are insurance plans provided by private insurance companies. Med-Advantage plans (sometimes referred to as Medicare Part C) are required to provide the same coverage as Traditional Medicare Part A and B; however many of the Med-Advantage plans also provide additional benefits, such as prescription drug coverage, and dental, vision, and health programs. There are a number of providers in our area, including Group Health, Regence, United Health Care, Sound Path, Humana, Healthnet, Premera/Blue Cross, Amerigroup, Providence, Aetna, and Asuris. The monthly premiums for these plans can vary greatly, depending on your co-pays, deductibles, drug coverage, whether it is an open or closed HMO, and any extra benefits.
SO WHICH PLAN SHOULD YOU ENROLL IN?
There are a few key differences between Traditional Medicare and Med-Advantage plans. One, you must reside in a county that has Med-Advantage plans available, which tend to be larger, metropolitan communities. If you reside in a more rural or less populated area of Washington, you may only have Traditional Medicare with a Supplement Plan and Part D for your drug coverage. If you are a snowbird and have severe health issues, such that you need a designated set of physicians in both Washington and your snowbird state, Traditional Medicare is likely a better fit. If you are relatively healthy, with nominal prescription drug needs, or you only see your physicians on an annual basis, a Med-Advantage plan would likely be a better fit. The majority of Medicare eligible residents in the King, Pierce, Snohomish, and Thurston counties are enrolled in a Med-Advantage plan. This is because for many retirees, the cost savings for enrolling in a Med-Advantage plan are huge. In King County, there is a Med-Advantage plan with a zero premium![2] How is this possible? Bob Mitzel, an insurance specialist with United HealthCare explains: “Many people do not realize that when someone enrolls in a Med-Advantage plan, Medicare actually contributes between $8,000 and $10,000 a year to the Med-Advantage plan. Medicare has discovered that it is less expensive and more efficient to pay this amount out to the private insurance providers who will provide coverage to the individual than having to provide the coverage under Traditional Medicare.”