This year marks an increase in the cost of medical care. As such, it is wise to understand what you are paying for when you have Medicare.
More importantly, there is a need to know why getting supplemental coverage is a necessity when you consider the costs of Medicare and what will be covered.
Government provided Parts A and B (commonly referred to as Original Medicare) have several gaps. Filling those gaps with a Medigap or Advantage plan can save you thousands.
First, let us discuss what the costs are regarding premiums. There are four basic types of premiums stipulated in Medicare, albeit the last two are like extensions of the first two major premiums.
Part A Premium – this is also called premium-free Part A. Many people do not pay this because of the cost. This has the best coverage, but it is also not pragmatic to a lot of people. If you get this type of Medicare, you will pay $422 each month. But this only applies if you paid less than seven years’ worth of Medicare taxes. But if you paid the taxes, the standard cost is $232.
Part A – for this premium, you will get the following for each period:
Part B Premium – the standard cost of this is $134. Those who have Social Security benefits can pay less, and they pay, on average, $130. You can increase your premium if you can afford it but you will not anything closer to Premium A.
Part B – this covers deductibles and the costs of coinsurance. You will be paying $183 per year, and you will typically pay 20% of the amount for doctor services. This applies to most in-patient services and outpatient therapy plus medical equipment.
Part C Premium – this is a little tricky because it varies from one plan to another. However, Part C is not a separate benefit. It is still part of the policy, but it allows private firms to provide Medicare benefits. Examples of these are HMOs and PPOs. They are also known as Medicare Advantage Plans
Part D Premium – this refers to outpatient prescription drug insurance. This is a part of the Medicare policy that allows a patient to be covered on the costs of prescription drugs. However, this insurance is only covered by private companies and not directly by the government.
Also called Medigap, Medicare Supplement Insurance is sold by private companies that allow you to cover expenses that the government does not insure. Examples of these are deductibles, copay, and coinsurance.
With Medicare, you have to be on US soil to get your benefits. But with Medigap, many providers offer health insurance for you even if you are outside the United States, something that the typical Medicare insurance will not cover.
Another benefit of Medigap is that it may allow you to get 50% to 100% coverage for blood transfusions for the first three pints. With Medicare, the government will only pay on the third pint. Medigap also covers some skilled nursing facilities should you need one. Most Medigap plans can shoulder up to 100% of the coinsurance for this need.
All in all, there is no single insurance plan that will cover everything. The best thing to do is to understand your financial capacity and determine which medical expenses are beyond your financial means. Once determined, you can then select the best insurance policy for you. Keep in mind, however, that the original Medicare does not cover many medical services that you might need in the future. In this case, it is always best to opt in for a Medigap coverage.
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Category: Medicare Supplements