Most likely your loved one is enrolled in Medicare. Most Americans over 65 are Medicare members because Medicare is basically a good deal. But, as you probably already know, there are many different Medicare options that can affect what things are covered, what doctors can see, and how much your family may have to pay out of pocket. You may find that your loved one would be better off changing their Medicare plan to either save money or spend that money more wisely.
Let’s start with the easy stuff. Medicare is a government run health insurance program for seniors 65 years and older. Whenever a Medicare member has to visit a hospital, see a doctor, or buy prescription meds some of the costs will be paid by Medicare, and the rest has to be paid by the member or their family. Note that Medicare does not help pay for living in a retirement community or assisted living facility, and will only cover stays in a nursing home for a short period of time.
Exactly what is covered and how much you have to pay depends on three things:
1. The exact type of Medicare coverage plus any “extra” insurance
2. The medical procedure, product, or medication involved
3. If the doctor or facility accepts Medicare at all
There are many types of Medicare coverage, and trying to understand the options can be incredibly confusing, even for professionals. Let’s start with the two main programs: “Traditional Medicare” and Medicare Advantage.
Traditional Medicare is broken up into three “parts”:
- Part A: covers hospital stays and hospice care
- Part B: covers doctors fees, procedures that don’t require a hospital stay, and medical supplies
- Part D: covers prescription meds
Everyone in Traditional Medicare gets Part A, usually for free, but Part B and Part D are optional and cost more. Again, Medicare rarely pays 100% of anything, and for things like major surgery or hospitalizations, you can be on the hook for enormous bills. Because of these gaps, many Traditional Medicare members have extra insurance. Extra coverage can come as a retirement benefit from a previous job, through the Medicaid program, or may be purchased from Medicare licensed insurance companies (known as “Medigap” policies).
About a third of Medicare members have a Medicare Advantage plan. Medicare Advantage (also known “Medicare Part C”) plans are offered by private insurance companies licensed by Medicare. Medicare Advantage plans differ from Traditional Medicare plans in these important ways:
- Monthly Premiums: A Medicare Advantage plan’s monthly premium cost may be higher or lower than the Traditional Medicare plan. Costs will be higher or lower depending on how the plans handle the next 3 features.
- Benefits: Medicare Advantage plans must provide the same benefits as Traditional Medicare or better. These additional benefits may be wellness programs, hearing and vision services or even nursing home stays. Many Medicare Advantage plans include prescription drug plans as well.
- Out of Pocket Costs: Traditional Medicare plans pay 80% of costs. Cheaper plans may cover a lower %, while more expensive plans may cover up to 100% of costs.
- Access to Doctors: Many Medicare Advantage plans limit the doctors that you can see. This may limit who can be your loved one’s primary care provider, or require referrals to see specialists like a cardiologist or neurologist.