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Medicare Simplified

Rooted in our core values, we match our clients with the most advantageous health care plans. Our core mission is to provide accurate, unbiased and essential information, enabling our clients to make wise decisions about their personal health care needs. Core is devoted to simplifying and solving all aspects of Medicare, including Medicare Advantage Plans, Medicare Advantage Prescription Drug Plans, Medigap -often referred to as “Medicare Supplements” as well as Prescription Drug Plans (“Part D”) and Dental Plans.

We are currently producing multiple video tutorials to help Americans better understand every aspect of Medicare. Just like our licensed agents provide for our clients, our tutorials will provide essential and valuable information to equip everyone who wants to maximize their benefits and minimize the costs of their personal health care needs.

For now, here is some basic information to better understand Medicare and to help you navigate through the Medicare maze.

Medicare: A (Very Short) History

Medicare originally started-out as our government-run, fee-for-service medical insurance programs for Americans after they turn 65 years old. Back in 1965, President Lyndon B. Johnson signed into law the bill that began Medicare and Medicaid.  Medicare has been upgraded throughout the years. For example, in 1972 Medicare was expanded to provide coverage for disabled Americans, people with end-stage renal disease (kidney failure), and people diagnosed with Amyotrophic lateral sclerosis (ALS) or Lou Gehrig’s disease. One of the most significant changes to Medicare occurred in 2003, when President George W. Bush signed the Medicare Prescription Drug, Improvement, and Modernization Act (abbreviated as the Medicare Modernization Act or MMA).

Core Medicare believes Medicare is a good thing, it has worked very well for ~60 years. The improvements over that time have opened the privatization of Medicare in the form of Medicare Advantage plans, also known as “Part C” plans. Technically, Medicare Advantage Plans have been around since 1985, but these plans were not named “Medicare Advantage” plans until 2003 as part of the Medicare Modernization Act (MMA).

We don’t want to put you asleep with a history lesson, but knowing this helps lay the foundation of understanding the ‘CORE’ of Medicare, as we dive into the advantages & disadvantages of the many Medicare options available to those who qualify.

As a whole, the Medicare program is administered and regulated by a federal agency within the United States Department of Health and Human Services known as the “Centers for Medicare & Medicaid Services.”

 

Medicare is a federal health insurance program for qualifying individuals, including people age 65 and older, those with certain disabilities, and individuals with end-stage renal disease (ESRD), also known as permanent kidney failure.

Some people may confuse Medicaid and Medicare programs. Though both are federal health insurance programs run by the Centers for Medicare and Medicaid Services, the primary difference is that Medicaid is a needs-based insurance program while Medicare isn’t. Your income isn’t a determining factor for Medicare qualification.

There are monthly premiums for certain parts of Medicare. Additionally, Medicare does have some limitations and regulations on what it’ll cover for health care costs. Read on to learn more about each part of Medicare, what’s covered, and how to enroll.

The core “parts” of Medicare

Medicare Part A is considered the hospital insurance portion of Original Medicare. Part A coverage includes health care costs associated with hospital stays and limited stays at a nursing home, hospice care, and some costs for home health care.

You don’t have to pay a monthly premium for Medicare Part A hospital insurance if you or your spouse paid qualifying taxes during employment. If you don’t qualify for premium-free Part A, you can pay for it. The premium amount you have to pay varies based on how long you or your spouse worked and paid Medicare taxes. For instance, if you paid taxes for less than 30 quarters, you’ll pay $505 per month based on 2022 premiums. But if you worked and paid taxes between 30 and 39 quarters, you’ll only pay a $278 monthly premium.

If you don’t buy Part A when you’re first eligible for Medicare (usually when you turn 65), you might have to pay a penalty. You may have to pay an extra 10% for your monthly premium.

Be careful! You’ll have to pay the higher premium amount each month for twice the number of years you could have signed up for Part A, but didn’t.

Medicare Part B is considered the medical insurance portion of Original Medicare. Similar to health insurance, Part B coverage is for everyday health care expenses such as trips to the doctor’s office for a checkup or a sick visit, any outpatient care you might receive, certain medical supplies, and preventive care like an annual wellness visit.

Medicare Part B medical insurance requires monthly premiums from nearly everyone.

Medicare Part C, commonly referred to as Medicare Advantage, is offered by health insurance companies approved by Medicare. If you choose a Medicare Advantage Plan as an alternative to Original Medicare, it becomes your primary coverage. Think of Medicare Advantage Plans as “Medicare bundles” because these plans cover everything that Part A and Part B do. Most Medicare Advantage Plans include Part D Medicare prescription drug coverage. Some Medicare Advantage Plans offer additional coverage for dental and vision and even fitness memberships. For example, Medicare Advantage Plans cover in-patient hospital stays, stays in a skilled nursing facility, and home health care like Original Medicare Part A. Part C also covers outpatient care such as Medicare Part B does, including doctor visits, lab tests. X-rays, outpatient surgery, and emergency services.

Original Medicare Part A and Part B only cover 80% of the costs of services received. Meanwhile, Medicare Advantage Plans cover everything Part A and Part B cover but charge a small copayment and coinsurance for services. Most Medicare Advantage plans also have maximum out-of-pocket costs per year, and many come with a $0 monthly premium, which can make these plans more affordable. The costs of Medicare Advantage plans vary since private companies offer them, but you can expect to pay both a monthly premium and a monthly Part B premium, unless the plan is a $0 premium plan. Plan costs can vary depending on whether other benefits like Part D, dental, vision, and hearing are included.

Medicare Part D refers to prescription drug coverage, so it’ll help cover the costs of medications prescribed for your health condition. Individual Medicare drug coverage plans use a formulary developed by a pharmacy and therapeutics committee composed of pharmacists and physicians to regulate which medications they’ll cover. The United States Centers for Medicare and Medicaid Services (CMS) must approve the formulary. Part D plans are required to offer two medications in all categories necessary to treat your health condition. In most cases, if a name-brand medication isn’t covered, a generic will be.

Medicare Part D does have costs associated with it. The costs vary based on which type of plan you choose. In general, you can expect to pay a monthly premium ― this can be deducted directly from your Social Security if you choose ― and a yearly deductible. The deductible can’t be more than $480 in 2022. You’ll pay a copayment or coinsurance percentage for each drug after your deductible is met. If you have low income and resources, you may be able to get help with Part D costs through Extra Help.

Medigap insurance is commonly known as Medicare Supplemental Insurance. As the name implies, it’s used as a supplemental health insurance program to cover health care costs that Original Medicare does not. You can only purchase Medigap insurance if you’re enrolled in Original Medicare. It cannot be used with a Medicare Advantage Plan. Medigap insurance is offered through private insurance companies approved by Medicare.

You pay a monthly premium for Medigap as well as your regular monthly Part B Medicare premium. Your Medigap premium is paid directly to the health insurance company you got your Medigap policy through while the Part B premium is paid to the Social Security Administration.

Medigap insurance can help cover your deductible costs, copayments, and coinsurance under Original Medicare. For people newly eligible for Medicare on or after January 1, 2020,

Medigap insurance can no longer cover the Part B deductible.

If you were eligible for Medicare before January 1, 2020, you may be able to purchase Plan C or F, which will cover the Medicare Part B deductible cost. If you already have a Plan C or F, you can keep it. Medigap insurance can’t be used to cover the costs of certain health care expenses, including long-term care, vision care, and eyeglass, dental care, hearing aids, or private-duty nursing care.

When you become eligible for Medicare, you have choices to make. First, you must decide whether you’ll enroll in Part A and B or Part A only and defer Part B. Most people choose Part A because it is premium-free. If you’re enrolled in a health savings account (HSA), you won’t be able to continue contributing to it if you enroll in Part A. Once your A and B choices are made, you can keep Original Medicare and add a supplement and Part D plan or opt for a Medicare Advantage Plan for your health care coverage.

Here’s what each part of Medicare covers and costs:

Medicare Part A is considered the hospital insurance portion of Original Medicare. Part A coverage includes health care costs associated with hospital stays and limited stays at a nursing home, hospice care, and some costs for home health care.

You don’t have to pay a monthly premium for Medicare Part A hospital insurance if you or your spouse paid qualifying taxes during employment. If you don’t qualify for premium-free Part A, you can pay for it

The premium amount you have to pay varies based on how long you or your spouse worked and paid Medicare taxes. For instance, if you paid taxes for less than 30 quarters, you’ll pay $499 per month based on 2022 premiums. But if you worked and paid taxes between 30 and 39 quarters, you’ll only pay a $274 monthly premium.

Medicare Part B is considered the medical insurance portion of Original Medicare. Similar to health insurance, Part B coverage is for everyday health care expenses such as trips to the doctor’s office for a checkup or a sick visit, any outpatient care you might receive, certain medical supplies, and preventive care like an annual wellness visit.

Medicare Part B medical insurance requires monthly premiums from nearly everyone. The standard amount for 2022 is $170.10. If your gross income on your tax return is high enough, you’ll be required to pay both the standard monthly premium and an Income Related Monthly Adjustment Amount(IRMAA). You’re also responsible for 20% of the costs of your health services after your annual deductible ($233 in 2022) is met.

Medicare Part C, commonly referred to as Medicare Advantage, is offered by health insurance companies approved by Medicare. If you choose a Medicare Advantage Plan as an alternative to Original Medicare, it becomes your primary coverage. Think of Medicare Advantage Plans as “Medicare bundles” because these plans cover everything that Part A and Part B do. Most Medicare Advantage Plans include Part D Medicare prescription drug coverage. Some Medicare Advantage Plans offer additional coverage for dental and vision and even fitness memberships. For example, Medicare Advantage Plans cover in-patient hospital stays, stays in a skilled nursing facility, and home health care like Original Medicare Part A. Part C also covers outpatient care such as Medicare Part B does, including doctor visits, lab tests. X-rays, outpatient surgery, and emergency services.

Original Medicare Part A and Part B only cover 80% of the costs of services received. Meanwhile, Medicare Advantage Plans cover everything Part A and Part B cover but charge a small copayment and coinsurance for services. Most Medicare Advantage plans also have maximum out-of-pocket costs per year, and many come with a $0 monthly premium, which can make these plans more affordable. The costs of Medicare Advantage plans vary since private companies offer them, but you can expect to pay both a monthly premium and a monthly Part B premium, unless the plan is a $0 premium plan. Plan costs can vary depending on whether other benefits like Part D, dental, vision, and hearing are included.

Medicare Part D refers to prescription drug coverage, so it’ll help cover the costs of medications prescribed for your health condition. Individual Medicare drug coverage plans use a formulary developed by a pharmacy and therapeutics committee composed of pharmacists and physicians to regulate which medications they’ll cover. The United States Centers for Medicare and Medicaid Services (CMS) must approve the formulary. Part D plans are required to offer two medications in all categories necessary to treat your health condition. In most cases, if a name-brand medication isn’t covered, a generic will be.

Medicare Part D does have costs associated with it. The costs vary based on which type of plan you choose. In general, you can expect to pay a monthly premium ― this can be deducted directly from your Social Security if you choose ― and a yearly deductible. The deductible can’t be more than $480 in 2022. You’ll pay a copayment or coinsurance percentage for each drug after your deductible is met. If you have low income and resources, you may be able to get help with Part D costs through Extra Help.

Medigap insurance is commonly known as Medicare Supplemental Insurance. As the name implies, it’s used as a supplemental health insurance program to cover health care costs that Original Medicare does not. You can only purchase Medigap insurance if you’re enrolled in Original Medicare. It cannot be used with a Medicare Advantage Plan. Medigap insurance is offered through private insurance companies approved by Medicare.

You pay a monthly premium for Medigap as well as your regular monthly Part B Medicare premium. Your Medigap premium is paid directly to the health insurance company you got your Medigap policy through while the Part B premium is paid to the Social Security Administration.

Medigap insurance can help cover your deductible costs, copayments, and coinsurance under Original Medicare. For people newly eligible for Medicare on or after January 1, 2020,

Medigap insurance can no longer cover the Part B deductible.

If you were eligible for Medicare before January 1, 2020, you may be able to purchase Plan C or F, which will cover the Medicare Part B deductible cost. If you already have a Plan C or F, you can keep it. Medigap insurance can’t be used to cover the costs of certain health care expenses, including long-term care, vision care, and eyeglass, dental care, hearing aids, or private-duty nursing care.

Here are 3 of the 4 different “parts” of Medicare that help cover specific services.

Medicare Part A – (Hospital Insurance)

Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.

Medicare Part B – (Medical Insurance)

Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.

Medicare Part D – (prescription drug coverage)

Part D helps cover the cost of prescription drugs (including many recommended shots or vaccines).

Part A & Part B Premiums

Most people don’t pay a monthly premium for Part A:

You usually don’t pay a monthly premium for Part A if you or your spouse paid Medicare taxes for a certain amount of time while working. This is sometimes called “premium-free Part A.

If you don’t qualify for premium-free Part A, you can buy Part A:

If you don’t qualify for premium-free Part A, you can buy Part A. You’ll pay up to $505 each month in 2024. If you paid Medicare taxes for less than 30 quarters, the standard Part A premium for 2024 is $505. If you paid Medicare taxes for 30–39 quarters, the standard Part A premium is $278.

Everyone pays a monthly premium for Part B:

Most people will pay the standard Part B premium amount.

Each year, the Medicare Part B premium, deductible, and coinsurance rates are determined according to provisions of the Social Security Act. The standard monthly premium for Medicare Part B enrollees is $174.70 for 2024, an increase of $9.80 from $164.90 in 2023. The annual deductible for all Medicare Part B beneficiaries will be $240 in 2024, an increase of $14 from the annual deductible of $226 in 2023.

(If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you’ll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.)

How Does Medicare Work?

With Medicare, you have options in how you get your coverage. Once you enroll, you’ll need to decide how you’ll get your Medicare coverage. There are 2 main ways:

Original Medicare:

Original Medicare includes Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). You pay for services as you get them. When you get services, you’ll pay a Deductible at the start of each year, and you usually pay 20% of the cost of the Medicare-approved service, called coinsurance. If you want drug coverage, you can add a separate drug plan (Part D).

Original Medicare pays for much, but not all, of the cost for covered health care services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, like copayments, coinsurance, and deductibles. Some Medigap policies also cover services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S.

Medicare Advantage:

Medicare Advantage is an “all in one” alternative to Original Medicare. These “bundled” plans include Part A, Part B, and usually Part D. Most plans offer extra benefits that Original Medicare doesn’t cover — like vision, hearing, dental, and more. Medicare Advantage Plans have yearly contracts with Medicare and must follow Medicare’s coverage rules. The plan must notify you about any changes before the start of the next enrollment year.

Each Medicare Advantage Plan can charge different out-of-pocket costs. They can also have different rules for how you get services.

Medicare prescription drug coverage (Part D)

Medicare drug coverage helps pay for prescription drugs you need. To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage (this includes Medicare drug plans and Medicare Advantage Plans with drug coverage).

Each plan can vary in cost and specific drugs covered, but must give at least a standard level of coverage set by Medicare. Medicare drug coverage includes generic and brand-name drugs. Plans can vary the list of prescription drugs they cover (called a formulary) and how they place drugs into different “tiers” on their formularies.

Plans have different monthly premiums. You’ll also have other costs throughout the year in a Medicare drug plan. How much you pay for each drug depends on which plan you choose.

Medicare Advantage plans are offered by managed care organizations (private insurance companies), like UnitedHealthcare, Humana, Cigna, Aetna, Allwell, WellCare, Anthem, BlueCross BlueShield, Alignment and MANY more. It seems like everyone is jumping-into the Medicare arena these days!

These “Carriers” replace the traditional Medicare program, with two primary goals:

  • Expand Medicare beneficiaries’ choices with more comprehensive benefits than what Original Medicare covers.
  • Lower the overall cost of Medicare for both the government and the consumer.

Although these two goals were never really met early-on as they were first introduced, the past ten years have proven that Medicare Advantage plans are now exceeding consumer and government expectations.

More and more Medicare beneficiaries are jumping into Medicare Advantage plans as they have been proven, in most cases, to provide more comprehensive coordinated care, extra benefits that Original or Basic Medicare doesn’t cover, and have saved the consumer a lot of money on their health care related expenses.

If you’re considering moving from traditional Medicare to a Medicare Advantage plan, you’re not alone. Medicare Advantage plans are continuing to gain in popularity. So, let’s dig deeper into how exactly these plans work and the advantages and disadvantages of them. As with any major health or financial related decision you make. We always recommend that you talk to an expert about your own personal and unique situation.

Medicare Advantage plans are usually wonderful, but they are not for everyone. Core Medicare’s preferred licensed health-insurance Agents offer both Medicare Advantage plans as well as Medicare Supplement plans. Core Agents provide accurate, unbiased and useful information, enabling our clients to make wise decisions about their personal health care needs. We are the caring experts you can trust to help you make wise decisions.

A Medicare program that offers health plans through private insurance companies that contract with Medicare. These plans may be available with drug coverage (MAPD) or without prescription drug coverage (MA).

A + B ( + sometimes D ) = Part C

Part C may also include some additional benefits such as:

Dental. Vision, Hearing, Gym Membership, Over-the-counter allowances, Healthy Food/Drink Cards, Podiatry, Chiropractic & Acupuncture, 24/7 Nurse Hotline, PERS (Personal, Emergency Response System), Plus Other Perks!

If the plan includes prescription drug coverage, it is called a “MAPD”

(Medicare Advantage Prescription Drug plan).

If the plan does not include prescription drug coverage it is called a “MA”

Medicare Advantage Plan

All Medicare Advantage and Medicare Advantage Prescription Drug plans are required to cover at a minimum, at least all the same benefits that Original Medicare offers. Clients do NOT lose any Original Medicare benefits when they join an Advantage plan.

  • Must be eligible for Medicare
  • Must continue to pay your Part B premium
  • Must pay your MA/MAPD monthly premium, if applicable
  • Cannot have ESRD (End Stage Renal Disease) = cannot be waiting for a transplant

MA/MAPD’s put Original Medicare in hibernation by replacing it and adding additional benefits, generally improving and augmenting Original Medicare with perks.

By definition, Medicare Advantage plans replace the benefit structure of Original Medicare. (It’s supposed to add more coverage and more protection.)

The Client is still a part of Medicare, however, the Client gets all of their Medicare-covered health care from the private carrier’s health plan they choose.

The Client will NOT lose their Medicare when they join a Medicare Advantage plan!  In fact, they MUST have Original Medicare to be eligible for a MA/MAPD.

Always remember that the Client must continue to pay for their Part B premium.

! Important: People often misunderstand and/or misuse the word “Supplement.” Know that Medicare Advantage Plans are NOT Medigap Supplement Plans. Medicare Advantage Plans are NOT Medicare Supplement Plans. They are totally different! Please watch Core Medicare’s Video Tutorials to learn more

To keep the Client’s costs down, they might have to choose doctors that are in the plan’s network.

When the Client goes to the doctor, they will use the insurance card from the MA/MAPD plan, NOT their Original Medicare Card.

Each plan provider (carrier) can charge different out-of-pocket costs and have different rules for how the Client accesses/utilizes services.

These plans vary throughout the USA. The plans are available by County.

There is NO underwriting for MA/MAPDs.

Medicare beneficiaries can join MA or MAPD plans even if you have a pre-existing condition, like End Stage Renal Disease (ESRD) or you’re receiving renal dialysis, You can now be approved for any MA/MAPD plan available in your county.

If you receive TRICARE (a type of military health coverage, or CHAMP VA, we recommend that you do not enroll in a MA or MAPD, because it can conflict with your military benefits and cause issues.

A person CANNOT be enrolled in a MA/MAPD and a stand-alone PDP at the same time. The only time a medicare beneficiary can have both a MA and a PDP is if the MA is a PFFS without drug coverage.”

[*** look at the structure of the following]

PFFS = Private Fee for service
One exception to this is:  PFFS + Stand-Alone PDP ???

(What does the Advantage plan have that Medicare doesn’t?)

  • The copays, deductibles, and coinsurance under a MA/MAPD plan are typically lower (than Original Medicare).
  • Limits your maximum out of pocket
  • Might offer extra benefits like dental and vision
  • MAPDs have prescription drug coverage included in the plan versus having to purchase it separately.

[Quote: “Fully subsidized Medicare still requires that you pay the Plan B premium.”]

  • HMO
  • PPO
  • HMO-POS
  • PFFS
  • D-SNP (Dual Special Needs Plan)
  • C-SNP (Chronic Special Needs Plan)

All plans are Network based (except some PFFS plans)

These plans function as MA or MAPD

  • All about the HMO (Health Maintenance Organization)
  • Beneficiary only has access to IN-NETWORK PROVIDERS.
  • If they go to a NON-NETWORK PROVIDER, neither Medicare nor the HMO will pay for the services unless there is an emergency.
  • Beneficiary is assigned a participating PRIMARY CARE PHYSICIAN (PCP) to monitor the beneficiary’s health care. Sometimes called an “overseer” or a “gatekeeper.”
  • Beneficiary typically must receive a REFERRAL from their PCP to go and see a specialist.
  • This is done to minimize costs
  • Because of this, typically HMO’s have lower copays and lower coinsurance for the beneficiary.

All about the PPO (Preferred Provider Network)

  • Beneficiary has access to in-network and out-of-network providers
  • The beneficiary will usually pay more for services with an out-of-provider, unless it is an emergency.
  • Referrals to specialists are NOT required

All about the HMO-POS (Health Maintenance Organization – Point of Service)

  • This is a hybrid of the HMO and PPO: It is a HMO, but has select out-of-network benefits similar to a PPO
  • You will typically pay a higher cost for the select out-of-network benefits (unless it’s for an emergency / not penalized for an emergency).
  • Referrals are usually required. See the plan’s Summary of Benefits to confirm.

All about the PFFS (Private-Fee-For-Service) – usually for rural areas

This is a hybrid of Medigap and Medicare Advantage Plans

Review on 2024

Before we delve-into Supplement (Medigap) Plans, here’s a quick break-down of Original (Basic) Medicare:

Part A: Inpatient Care

  • $1632 deductible per benefit in 2024
  • (If you don’t get premium-free Part A, you pay up to $505 each month. If you don’t buy Part A when you’re first eligible for Medicare (usually when you turn 65), you might pay a penalty. Most people pay the standard Part B monthly premium amount ($174.70 in 2024).

Part B: Outpatient Care

  • 80/20 split. Medicare pays 80%, leaving you exposed to 20% co-insurance
  • There is no maximum out-of-pocket expense. There is no limit.

MEDICARE SUPPLEMENT PLANS

(Also known as “Medigap” Plans. Synonyms: Medigap = Supplement)

  • They are designed to help pay for some or all of the medical/hospital costs after Medicare pays its portion.
  • They are offered by private insurance companies.
  • They are called Medigap Plans because they fill in the gaps found in Original Medicare’s coverage.
  • For 2020, there are 8 different Medigap Plans that vary in the types of coverage.
  • They are government standardized plans.
  • They must meet established standards in the coverage that the plan provides in order for it to be called a Medigap plan. (Highly regulated standards.)
  • You must be eligible for Medicare.
  • You must continue to pay your Part B premium ($144.60/month in 2020)
  • You must pay your Medigap Plan premium.
  • Depending on the circumstances, you might have to pass “medical underwriting.”

Definition: Medical Underwriting

The process that an insurance company uses to decide, (based on your medical history), whether or not to approve or deny your application for insurance, and whether or not to add a waiting period for pre-existing conditions (if your state allows it), and how much to charge you for that insurance.

Guaranteed Issue:

An instance that means that the insurance company cannot ask health questions or exclude pre-existing conditions. The applicant is guaranteed to be accepted for the plan.

Know that medical underwriting is only a “pass” or “fail.”

  • Medigap plans supplement Original Medicare, meaning, if a service is not covered under Original Medicare (Part A and Part B), it will NOT be covered by the Medigap plan.
  • Medigap plans help cover some or all of the costs associated with Original Medicare (A & B), such as co-pays, deductibles, and co-insurance.
  • There are no provider networks associated with Medigap plans.

Rule: If a doctor or hospital accepts Original Medicare (and a vast majority do ~95%+), then they are required to accept  a patient with a Medigap plan. Thus, any and all Medicare providers must accept a Medicare Supplement plan.

  • Medigap plans travel with you, if you move are travel within the United States.
  • You are not required to get referrals to see specialists.

Medigap plans lower your out-of-pocket exposure and therefore cuts down on your costs.

There are 10 government standardized Medigap plans for those entitled to Medicare prior to 2020, and there are 8 Medigap plans for those who are NEW to Medicare starting in 2020.

  • A, B, C, D, F, G, K, L, M, N (Received Medicare prior to 2020)
  • A, B, D, G, K, L, M, N (New to Medicare in 2020) (C and F out)
  • Plans F, G and N provide the most comprehensive coverage.

Plan F and Plan G are identical EXCEPT in one way:

Plan F pays the Part B annual deductible ($198 in 2020), however, Plan G costs less. As a general rule, since Plan G is less than $16.50/month ($198 / 12 months) than Plan F, it is more cost-effective to choose Plan G over Plan F. Also, the pool of insureds in Plan F are older, so the rate increases more aggressively than Plan G.

With regard to medical underwriting, monthly premiums can depend on: county, gender, age, tobacco use, and sometimes height and weight.

*Very important note: Medigap/medicare Supplement Plans DO NOT include a prescription drug plan (Part D). You must pay for a Part D (Prescription Drug Plan “PDP” separately).

The chart below shows basic information about the different benefits/features that each Medigap policy covers for 2020. If a percentage is shown, the relevant Medigap plan covers that specific percentage of the benefit, and you’re responsible for the remaining percentage.

Some Important Factoids:

 

All Medicare Supplement Insurance (Medigap) plans are guaranteed renewable (so long as you make your payment (monthly or annual) on time.

The premiums on all plans increase over time (based on the group as a whole, and are not based on an individual basis).

Starting the 1st day of January 2020, Medigap plans sold to people who are new to Medicare won’t be allowed to cover the Part B deductible. Because of this, Plans C and F won’t be available to people who are newly eligible for Medicare on or after January 1, 2020. I you already have either of these 2 plans (or the high deductible version of Plan F), or are covered by one of these plans before January 1, 2020, you’ll be able to keep your plan. If a person was entitled to Medicare prior to 2020, then s/he may still enroll in Plans C and Plan F – even if they delayed their Medicare coverage. (It may not be cost-effective to do this, but it is an option for those who are “grand-fathered-in” or “grand-mothered-in.”)

There are two simple questions to ask your doctor to determine whether a procedure is covered:

Q1: Does Medicare cover that procedure or service?

Generally, anything that is a medical necessity will be covered, however, be sure to ask in advance just to be sure.

Q2: Does the provider accept Medicare?

Most doctors (over 97%) in the United States do accept Medicare.

Here’s How You Choose Plans…

Plan F:
  • Plan F is the most comprehensive Medigap plan on the market. Those in “sales” refer to it as the “Cadillac Plan.”
    Plan F pays for the balance of the costs not covered or paid by Original (Basic) Medicare.
  • Clients with Plan F have no co-pays, no deductibles, no coinsurance it includes emergencies in foreign countries when traveling.
    The only cost the beneficiary pays for on a Plan F is the monthly premium AND their part B monthly premium (which $144.60 in 2020).
  • They can see any doctor /hospital as long as the provider accepts Original Medicare.
    Plan F is no longer available to those who received Medicare eligibility on or after January 1, 2020. This is actually a good thing mathematically, which will be demonstrated.
    If a person is eligible for Medicare prior to January 1, 2020, then they are eligible for Plan today, however, it’s usually not the best choice for reasons we will be explaining.
Plan G:
  • The most comprehensive Medigap Plan on the market for those who become Medicare eligible after January 1st, 2020.
  • Plan G is identical to Plan F in every way, except Plan G does NOT cover the Part B annual deductible (which is $198/year in 2020).
  • For those who prefer Plan F but are not eligible, it is important to understand to that Plan G has a lower monthly premium than Plan F, and it in the long run typically saved the beneficiary money. Consider that $198 divided by 12 months equals $16.50 per month. Thus, if Plan G is less than $16.50 per month, the beneficiary saves money (and typically Plan G is more than $30 less per month than Plan F). The bottom-line is that it is almost always more cost-effective to choose Plan G over Plan F whenever it’s an option. Even those who are eligible for Plan F (and can pass medical underwriting will save money).
Plan N: Plan N may be a strategic option for some, but may not be better than Plan G with regard to money, due to some additional costs associated with it, however, it can be a logical choice for some wanting a Medigap plan, but wanting a lower monthly premium than Plan G.

Pros of the Plan N:

  • Covers the Part B co-insurance, except for applicable co-pays:
  • Doctor visit: $20 or less
  • Emergency Room: $50 or less
  • Plan N typically has a lower premium than Plan F and Plan G
  • Can see any doctor/hospital so long as they accept Original Medicare.
  • Like Plan F and Plan G, Plan N does include foreign emergency travel

Cons of plan N:

  • The above-mentioned co-pays for doctor and emergency room.
  • Plan N does not cover Part B excess charges
  • Plan N does not cover the Part B deductible ($xxx/month in 2024).
  • If a doctor or hospital charges more than what Medicare sets as acceptable, the beneficiary has to pay the difference. This extra amount is referred to as “excess charges” and it may add additional costs to a person plan N.

What is Part B “Excess Charges”?

  • The amounts that doctors are allowed to charge above the Medicare contracted “allowable limit’ – up to 15%.
  • Excess Charges are not extremely common, but excess charges can appear with certain surgeons and specialists.

There are 8 states by law, that cannot bill Part B excess charges:

CT, MA, MN, NY, OH, PA, RI and VT

This means that IF you live in one of these 8 states, you may save money by choosing a Plan N over a Plan G or Plan F (if applicable).

(Be sure not to confuse the word “Part” with “Plan” when understanding Medicare options. There is Part A, Part B, Part C and Part D for Medicare. There are Medigap or Medicare Supplement “Plans.”)

It is important to know that a “Plan G is a Plan G, and Plan F is a Plan F, and a Plan N is a Plan F” – so long as you are dealing with an A-rated carrier. There is no difference between any A-rate plan, so a Blue Cross/Blue Shield Plan G is the same as a Mutual of Omaha Plan G, because federal regulation requires the exact same coverage. A same plan is the same plan with all “A-rated” carriers, so don’t be tricked into any marketing/sales pitch. You’re not paying for a Carrier, you’re paying for the specifications of a certain coverage. (Never pay more for the exact same coverage, and there are some Carriers that charge more than others. Some carriers have a higher rate of increase of premium as well!)

Supplement plans renew each month/quarter/year automatically, so long as you make your monthly payment on time.

(Good Advice: B-rated carriers are known to increase premiums more, so always go with an A-rated carrier.

When Can You Get a Medicare Supplement Plan?

  • Open Enrollment (OE)
  • Triggered by the Medicare Part B effective date (start date).

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