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Original Medicare


The original fee-for-service Medicare covers all aspects your health care, but not at 100% in all cases.  Medicare Part A covers Hospital Stays, but not 100%.  Medicare Part B covers Doctor visits and Outpatient services, but not 100%.  Medicare only pays for medically necessary services.


Beginning January 01, 2016 , Medicare Part A deductible is $1,288 for up to 60 days in the hospital.  Medicare pays everything medically necessary except your deductible. From the 61st to the 90th day, if you’re still in the hospital, Medicare will pay everything medically necessary except $322 per day for your care.  From the 91st to the 150th day, Medicare will pay everything medically necessary except $644 per day for your care.  After 150 days, Medicare pays nothing.


Part A also helps cover:

·   Blood

·    Hospice care

·    Home health care

·    Skilled nursing and rehabilitative care only after a three day hospital stay, up to 100 days in a benefit period (as defined by Medicare). In 2016, beneficiaries pay $161 per day for days 21-100 each benefit period.

·    Inpatient psychiatric care (up to 190 lifetime days)


Beginning January 01, 2016, Medicare Part B deducible is $166.  Medicare will pay everything except your deductible and 20% of all Part B charges.


Part B also helps cover:

·   Services from other (than doctors) healthcare providers

·    Home health care

·   Durable Medical Equipment

·    Some Preventative services



How to Cover Your Deductibles and Co-payments


You can cover your deductibles and co-payments by purchasing a Medicare Supplement to pay them after the original Medicare has paid, or you can enroll in a Medicare Advantage Plan that you DO NOT have to purchase, but you will pay co-payments in some cases when you use it. The choice of taking the Original Medicare and a Medicare Supplement, or a Medicare Advantage Plan as your health coverage depends on your circumstance and can only be made by you.  This website could only make a recommendation if your circumstance (financial, health-wise and otherwise) were known to us.  However, here is some information that may help you to make that determination:


Medicare Supplement Policies


A Medicare Supplement is private insurance sold by certain insurance companies though regulated by CMS (the Federal government), that covers the amounts Medicare does not pay for your health care.  These include: Part A (hospitalization) deductibles  and co-insurance as well as Part B (outpatient surgery and hospital services) deductibles and co-insurance.  Most Medicare Supplements plans (also called Medigap plans) pay for some or all of the following costs:


Part A

·    Part A Coinsurance and Hospital Benefits

·    Part A Deductible

·    Coverage for 365 Additional Hospital Days when Medicare coverage ends

·    Hospice Care Coinsurance or Copayment

Skilled Nursing Facility Care Coinsurance


Part B

·    Part B Coinsurance or Copayment

·    Part B Deductible

·    Part B Excess Charges

Blood (First 3 pints) (also under part A)



·    Foreign Travel Emergency not covered by Medicare

Non-Medicare-covered Preventive Services


There is a Part A deductible ($1,288) for each hospital stay and is repeated for each stay that is at least 60 days apart.  There are Part A daily co-pays ($322/day) for days you spend in excess of 60 consecutive days for a given hospital stay.  There is an annual Part B deductible of about $166, and there is a 20% Part B coinsurance for all services you receive under Part B covered services.  All plans pay 100% of the Part B coinsurance except:


·    Plans K and L pay a portion of Part B coinsurance until beneficiaries reach their out-of-pocket limit ($4,940 for K and $2,470 for L).  Then they will pay 100%.

·    Plan N requires beneficiaries make copayments for office and emergency room visits.


Medicare Supplement (Medigap) policies are available in standardized benefit plans, identified by the letters A - N (different plans are offered in Massachusetts, Minnesota, and Wisconsin).  Based upon these plan types, Medicare Supplements have a monthly premium which increases with age. At age 65, the non-tobacco rates range from $105 per month to about $254 per month, and the tobacco rates range from about $116 per month to about $278 per month.


When you purchase a Medicare Supplement, you also need a Medicare Prescription Drug Plan (PDP) also called Part D, if you do not have a private drug plan that is as good as a Medicare PDP.  Medicare PDPs can cost as little as about $30 per month and as much as $120 per month depending on the insurance company, your location in the USA and the level of coverage you select.


Medicare Advantage Plans


A Medicare Advantage (MA) plan is also called Part C.  The common types of Medicare Advantage (MA) plans are; HMO, HMO-POS and PPO.  These plans do not usually have deductibles, but they will have co-pays and coinsurance.  Co-pays are set dollar amounts ($5, $10, etc.) and coinsurance is a set percentage (20%, 30%, etc.). MA plans usually don't have a monthly premium (but they can).  In some areas of the country, the plans most often found having a monthly premium are PPO MA plans or the special needs or chronic needs plans for people with chronic illnesses.  HMO's usually have the smallest co-pays, HMO-POS's fall somewhere in the middle, and PPO's have the largest co-pays. 


HMO's require that your care be coordinated by a Primary Care Physician (PCP) and all services must be obtained in the plan's network.  Any services to be received from Specialists must be authorized by the plan, and is most commonly done via a referral from the PCP. However, some companies have what is known as an “Open Network” of providers which means “no referral” is required to see specialists or visit any facility covered by the network.


 HMO-POS's behave similarly to HMO's in the network, but allow you to go outside of the network if you have a need to do so.  The co-pays and co-insurance for services you receive outside of the network will be higher than those you receive in the network.  PPO's do not require referrals to see a specialist in or out of the network and is very popular for this reason.  Like the HMO-POS, services obtained out-of-network, have large co-pays and coinsurance.


Source: Centers for Medicare and Medicaid Services (CMS), Medicare & You 2016.

Medicare Advantage Plans (con’d)


The reason a Medicare Advantage plan is so named is because it is supposed to have certain advantages over the original fee-for-service Medicare.  Some of these advantages have al ready been mentioned, but two other very important advantages are additional services not covered by the original fee-for-service Medicare and Prescription Drugs.  Some additional services or benefits offered by Medicare Advantage plans include:


·    Medicare Part A deductible paid

·   Medicare Part B deductible paid

·   Routine dental care      

·   Comprehensive dental care

·   Eye exams

·   Eye glasses or contact lenses

·   Hearing exams

·   Hearing Aids cash subsidies

·   Podiatry care

·   Acupuncture


Some MA plans may include a Medicare Prescription Drug Card (at no extra monthly premium).  When a Medicare Advantage plan has a drug card, it is referred to as a Medicare Advantage plan with Prescription Drugs (MAPD), or more commonly an M-A-P-D plan.



Medicare Prescription Drug Plans


A Medicare Prescription Drug Plan (PDP) is also known as Part D of Medicare.  It can be obtained as a standalone PDP card or as part of a Medicare Advantage (MAPD) plan.  If you choose the original Medicare and a Medicare Supplement as your coverage, you will need to purchase a separate PDP also.  As mentioned before, Medicare PDPs can cost as little as about $30 per month and as much as $120 per month depending on the insurance company, your location in the USA and the level of coverage you select. Beneficiaries who enroll in Part D typically pay in addition to the monthly premium, an annual deductible and per-prescription cost-sharing.


·     Beneficiaries with income above $85,000 (individual) or $170,000 (couple) pay an income-related monthly adjustment (IRMA) amount in addition to the Part D premium.


If you select a Medicare Advantage plan as your coverage you should select one with Prescription Drug coverage unless you have comparable drug coverage with another source such as your employer's plan.  Otherwise, you may be penalized by CMS for not obtaining drug coverage at the time you became eligible for the coverage.  The prescription drug coverage in a Medicare Advantage plan is at NO extra cost.  It is part of the Medicare Advantage plan known as a Medicare Advantage plan with Prescription Drugs (MAPD).


Regardless of whether you enroll in a stand-alone Prescription Drug Plan (PDP) or in a Medicare Advantage plan with Prescription Drugs (MAPD), you may be required to pay a late enrollment penalty if you did not enroll in a prescription drug plan in the 7 months consisting of the 3 months leading up to the month in which you turned 65, the month in which you became 65, and the 3 months following the month in which you became 65.


·     Penalty for late enrollment:


            There is a permanent premium penalty of 1% of the national standard premium for every month that a beneficiary could have had Part D coverage, or equivalent creditable coverage and chose not to enroll. There is no penalty for individuals who qualify for low-income assistance



How Do You Select the Right Plan?


There are many reasons why a consumer selects one type of Medicare coverage over another.  The general reason for selecting a Medicare Supplement is the freedom to visit any Medicare approved doctor, hospital and other facilities in the USA.  However, keep in mind that in addition to the Medicare Part B cost, there is a monthly cost for the Medicare Supplement.  Medicare Supplements do not include Prescription Drug coverage so a consumer will need to have a standalone Prescription Drug Plan (PDP), also at an additional cost.


On the other hand, a Medicare Advantage plan with Prescription Drugs (MAPD) would most likely not have any additional monthly premium, and if it has one, it can be quite small when compared to the cost of a Medicare Supplement.  In spite of not having a monthly premium like a Medicare Supplement or Prescription Drug Card, many Medicare Advantage plans have zero dollar ($0) cost sharing for most services even including major surgery and extensive hospital stays.  For consumers who may find the cost of a Medicare Supplement and standalone Prescription Drug Plan to be cost prohibitive or budgetary restrictive or just plain unaffordable, a Medicare Advantage plan with Prescription Drugs (MAPD) might be the better alternative.


Still undecided?


Call (954) 239-5259 or (954) 495-4518 for an agent.

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