Are you approaching 65 and are being inundated with Medicare advertisements and are unsure of what all of this means? Medicare is complicated, so let’s break it down.
- What is Medicare?
- Parts of Medicare
- What Medicare plans are best for me?
- Who can help me with Medicare?
What is Medicare?
To start, Medicare is a Federal health insurance program for people who are 65 or older, certain people under 65 who have specific disabilities, and people with end-stage renal disease.
Medicare helps to pay for medical services like hospitalizations, physician care like preventative services, prescription drugs, skilled nursing facilities, home health care, and some hospice care.
Parts of Medicare
Medicare is broken down into separate parts that all provide different coverage.
Medicare Part A: Hospital Insurance
Part A is your hospital insurance. This includes coverage for services like:
- Inpatient Hospital stays
- Home Health
- Skilled Nursing
- Hospice Care
Part A is usually free as long as you or your spouse have paid FICA taxes for 10 years (or 4o quarters).
Medicare Part B: Medical Insurance
Part B is your medical insurance. This includes coverage for services like:
- Doctor’s office visits
- Labs and x-rays
- Durable medical equipment (DME)
- ER visits that don’t result in hospital admission
- Ambulance services
- Outpatient hospital charges
- Home Health
Part B in 2024 is $174.70 a month for most people. If you have a higher income, you will pay an additional surcharge on top of this base premium. To get more information, read our blog on IRMAA & Medicare.
Medicare Part D: Prescription Drug Coverage
Part D is your prescription drug coverage. If you do not have a Part D plan (or other creditable coverage) when you turn 65, you will face penalties.
These plans are sold by private companies. They range in premium, deductible, and drug pricing.
Part D plans will vary from person to person. Your plan will be based on the current prescription drugs you take, the tier of the prescription drugs, your location, and your pharmacy.
You can change Part D plans every year during the Annual Open Enrollment Medicare hosts from October 15th – December 7th. Drug companies change the tiering and pricing of prescription drugs every year, so you can change your plan every year to best fit your needs.
In 2023, we reviewed our client’s Part D plans and changed over 60% of our client’s plans to save them on average $1,574 in 2024.
Medicare Part C: Medicare Advantage
Part C is also known as Medicare Advantage.
Advantage plans are offered by private insurance companies and bundle together Part A and Part B, and many times your Part D drug coverage as well.
Advantage plans often act like an HMO or PPO. This means you must see the doctors inside those Advantage networks in order for the insurance to cover them. Advantage plans usually also have copays, and they can also have max out-of-pocket limits of nearly $10,000.
To determine if Advantage is right for you, you want to figure out the doctors that you want to see and whether or not that plan will cover your doctors.
Advantage plans are highly advertised as a more affordable or even “free” plan that comes with low costs and free perks. The number one mistake we see people make is choosing Advantage thinking that they can change down the road.
Medigap: Medicare Supplement
Medigap, also known as Medicare supplement, is a gap coverage plan to cover costs that Part A and Part B do not cover. These plans are also sold by privatized insurance companies.
When joining Medicare, you can go down two paths: Original Medicare or Medicare Advantage. Those who choose Original will likely also get a supplement plan and a Part D plan. You must be enrolled in Part A and Part B to enroll in a Medigap plan.
Since Part A and Part B only cover 80% of covered services, you will be responsible for the remaining 20% of the cost. This is where Medigap comes in, it will cover the remaining 20% of the costs so that you do not have to.
There are 10 standardized supplement letters to choose from. All with different coverage options and pricing. The letter you need will be based on your unique situation.
What Medicare plans are best for me?
What Medicare plans are best for you are based solely on YOUR unique situation. You want to consider things like:
- What Medicare plans do your current doctors accept?
- What doctors do you want to see in the future and what plans do they accept?
- What are the overall deductibles for you on a high-cost year?
- Do you take expensive medications?
- Are you going to travel? If so, most Medicare Advantage plans do not travel well.
- Are you going to be moving States soon?
These are just a handful of the factors that you need to consider when choosing a Medicare plan.
Who can help me with Medicare?
It can be hard to figure out who is the best person to help you find your Medicare plans.
Many insurance companies and insurance agents want you to buy Advantage plans because it pays them the highest commissions, so a lot of times we see that their advice doesn’t cover your whole picture.
You need to find an independent expert who doesn’t receive commissions for their advice. This can ensure that the path you choose can give you access to the health care you need not just now, but in the future.
The Medicare Coach is not an insurance agent or broker. We do not accept commissions, therefore our guidance is completely unbiased and in your best interest.
We offer a FREE live workshop where you can get the shortcut to Medicare. This workshop has helped over 200,000 people easily make their RIGHT decision.
We look forward to seeing you on the workshop!
Updated December 2023
