MARCH 18, 2020 – By ANDREA BONNER
Medicare gives millions of people access
to care they couldn’t otherwise afford. But Medicare isn’t free— you are
responsible for out-of-pocket payments for premiums, deductibles and
coinsurance. For seniors living on fixed or limited incomes, those medical
costs add up quickly, causing financial hardship and even bankruptcy.
To guard against sky-high medical expenses, some seniors
purchase Medicare Supplement plans. But those also come at a price,
and understanding the many plans and options is a daunting task.
What
Are Medicare Supplement Plans?
In addition to the out-of-pocket costs associated with Original Medicare (Parts A and B), there are
many essential services—like dental, hearing, and vision—that Medicare doesn’t
cover. Medicare Supplement plans pick up some of those costs, potentially
saving you thousands. There are two ways to supplement original Medicare
coverage:
·
Original Medicare plus a Medigap
plan
·
A Medicare Advantage plan
Medicare
Advantage Plans
Also called Medicare Part C, Medicare Advantage
plans bundle Medicare Parts A and B with services Original Medicare doesn’t
cover. Medicare Advantage plans work similarly to private health insurance and
are offered through private insurance companies that are contracted with Medicare.
Medigap
Plans
Medigap plans are also sold through private insurance
companies. Instead of providing comprehensive coverage (like Medicare Advantage
plans), Medigap insurance simply covers your out-of-pocket costs from Original
Medicare coverage, and nothing extra.
The Cost of Medicare Supplement
Plans and Are They Worth It?
The most important thing to remember about traditional
Medicare is this: There is no limit on your out-of-pocket costs. Consider these
facts from a recent West Health and Gallup report, The U.S. Healthcare Cost
Crisis:
·
7.5 million seniors cannot afford a
prescription medicine recommended by their doctor.
·
Over the past year, seniors reported
pulling an average of $3,521 from long-term savings to pay for healthcare.
A Medicare
Supplement plan steps in and pays for any coinsurance you owe, and some plans
will pay for your traditional Medicare deductible. Could you save with a
Medicare Supplement plan? Take a look at original Medicare costs for 2020:
|
Part A
|
Part B
|
|
|
Premiums
|
·
Most
people don’t pay a premium.
·
If you do
pay a premium, the cost ranges from $252-$248.
|
·
Part B
premiums are income-based.
·
The
standard cost is $144.60.
|
|
Deductibles
|
·
$1409
deductible per benefit period.
·
A benefit
period starts on the day inpatient care begins. It ends when you have not
received any Part A services for 60 days in a row.
·
There is
no limit on the number of benefit periods.
|
·
$198
|
|
Coinsurance
|
·
$0 for the
first 60 days of care
o
$352/day
for days 61-90
·
$704 for
days 91+ (for up to 60 days)
·
Beyond
that, you pay 100% of the cost of your care.
|
·
20% of the
Medicare-approved amount of your care.
·
There is
no maximum out-of-pocket cost.
|
Money isn’t the only reason to consider a Medicare
Supplement plan. Additional coverage reduces stress and worry, contributing to
peace of mind and long-term health. The same West Health and Gallup survey
found that 77% of seniors express anxiety over healthcare costs, and 10% have
skipped necessary treatment due to cost.
How
Much do Medigap Plans Cost?
Medigap plans offer various levels of coverage. Premiums
vary by plan, insurance company, and location. For example, here are the costs
a resident of Naples, Florida could expect to pay for a Medigap plan in 2020
(from lowest premium to highest):
|
Plan
|
Premium (low end of range)
|
Part A Deductible Coverage
|
Part B Deductible Coverage ($198)
|
|
F (high deductible)
|
$76
|
Not covered
|
|
|
K
|
$78
|
You pay $704
|
Not covered
|
|
L
|
$131
|
You pay $352
|
Not covered
|
|
A
|
$157
|
You pay $1408
|
Not covered
|
|
N
|
$158
|
Not covered
|
|
|
B
|
$188
|
Not covered
|
|
|
G
|
$203
|
Not covered
|
|
|
C
|
$218
|
|
|
|
F
|
$219
|
|
|
|
M
|
$231
|
You pay $704
|
Not covered
|
|
D
|
$239
|
Not covered
|
For each plan, you must
still pay the Medicare Part B premium of $144.60. And remember, Medigap plans
don’t cover prescription drugs.
Note: If you
are new to Medicare as of January 1, 2020, you may no longer sign up for plans
C and F. If you were eligible for Medicare before January 1, 2020, but not
enrolled, you may still be able to purchase those plans.
How
Much Do Medicare Advantage Plans Cost?
Many Medicare Advantage plans have no-cost premiums. In
fact, about 81 percent of Medicare enrollees had at least one option for a $0
premium Medicare Advantage plan, according to data from the Kaiser Family
Foundation.
Medicare Advantage plans are similar to private insurance.
In addition to a yearly premium, you’ll be responsible for your Medicare Part B
deductible, copays, and coinsurance. Medicare Advantage plans do limit your
yearly out-of-pocket expenses. A sample cost breakdown for a senior in Phoenix,
Arizona might look like this:
|
Premium
|
$0
|
|
Part B Deductible
|
$144.60
|
|
Plan Deductible
|
$500
|
|
Drug Deductible
|
$250
|
|
Out-of-pocket maximum (in-network)
|
$6500
|
|
Copay (primary doctor)
|
$10 per visit
|
|
Copay (specialist)
|
$40 per visit
|
How
Do I Choose a Medicare Supplement Plan?
There is no easy way to choose between the multiple options
for Medicare Advantage plans and Medigap plans. To do so, carefully consider
the following things:
·
Budget
·
Risk tolerance
·
Health concerns
·
Desired physicians/hospitals
·
Other coverage you may have
·
Prescription drugs (to estimate
costs)
·
Travel (some plans offer
out-of-country coverage)
Selecting a Medicare Supplement plan requires careful
comparison—but you don’t have to go it alone. A knowledgeable insurance agent
can help you select an affordable Medicare Supplement plan that meets your
needs and your budget.
Need help deciding whether a Medicare Supplement insurance
plan is worth it for you? Head to MedicareExpertUSA.com for free,
personalized quotes for Medigap plans, Medicare Advantage plans, and Medicare
Part D prescription drug coverage.
Next up, here’s how to be a good caregiver and take
good care of yourself, too.
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