Medicare Options
- Megan Hutton (Unlicensed)
When you first enroll in Medicare and during certain times of the year, you can choose how you get your Medicare coverage. There are many choices for HOW to get your Medicare Benefits. The options are listed below:
Original Medicare (OM)
Original Medicare (OM) with a Stand-Alone Prescription Drug Plan (PDP)
Original Medicare (OM) plus Medicare Supplement plan (Medigap/MedSup/Secondary Insurance plan) to cover all, or part, of the Medicare A and B deductibles and coinsurance.
Original Medicare (OM) plus Medicare Supplement plan plus a Stand-Alone Prescription Drug Plan (PDP)
Medicare Advantage plan with no Prescription Drug coverage (MA only)
Medicare Advantage plan with Prescription Drug coverage (MAPD)
Private Fee For Service Medicare Advantage plan plus a Stand-Alone Prescription Drug Plan (PDP)
NOTE: PFFS MA plans are the ONLY MA plans that can be combined with a PDP. Medicare will not allow a PPO, HMO, or HMO POS MA ONLY plan to be active simultaneously with a PDP.
The most common ways to get your Medicare Benefits is through Original Medicare, an MAPD plan, or a Supplement PLUS a PDP plan.
The following chart is a basic break down of the most significant differences between OM, MA/MAPD, and MedSups.
Original Medicare | Medicare Advantage (also known as Part C) | Medicare Supplements (Also known as MediGap, MedSup, or Secondary Insurance) |
Includes Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) | An “all in one” alternative to Original Medicare. These “bundled” plans include Part A, Part B, and usually Part D. | Does NOT include Medicare Part A, Part B, nor Part D |
If you want drug coverage, you can enroll into a separate Medicare drug plan. Does NOT include Part D. | You can select MAPD plans with a drug plan, or MA-Only plans without a drug plan. | If you want drug coverage, you can join a separate Medicare drug plan. Does NOT include Part D.
|
If you want dental, vision, or hearing coverage, you can join a stand-alone ancillary product from a private company. | Most plans offer extra benefits that Original Medicare doesn’t cover— like vision, hearing, dental, and more.
| If you want dental, vision, or hearing coverage, you can join a stand-alone ancillary product from a private company.
|
Can use any doctor or hospital that takes Medicare, anywhere in the U.S. | Can use any doctor or hospital that is willing to accept the plan. Some plans require prior authorization or referrals, which will be stated in the Summary of Benefits and Evidence of Coverage. | Can use any doctor or hospital that takes Medicare, anywhere in the U.S. |
There is no Maximum-Out-of-Pocket Limit with Original Medicare. | Every Medicare Advantage plan has to have a Maximum-Out-of-Pocket Limit of $7,550 or less.
| Some Supplements have a Maximum-Out-of-Pocket Limit, but most of them just take care of the remaining 20% after Medicare pays 80%. If Medicare does not cover it, then the Supplement typically does not cover it. |
You can add a Supplement and a PDP plan OR You can add a MA/MAPD plan.
You cannot have both. | If you have a Medicare Advantage plan, you cannot add an addition Medicare Plan. You can only have 1 Medicare Advantage plan. You cannot add a Supplement nor PDP plan. Exception: you can add PDP to a PFFS Medicare Advantage Plan. | You can add a PDP plan.
If you enroll into a MA/MAPD plan, then you will be disenrolled from your Supplement and PDP plan. |
Original Medicare
The following chart is a brief description of the 2022 Medicare Costs at a glance.
Part A premium | Most people don't pay a monthly premium for Part A (sometimes called "premium-free Part A"). If you buy Part A, you'll pay up to $499 each month in 2022. If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $499. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $274. |
Part A hospital inpatient deductible and coinsurance | You pay:
|
Part B premium | The standard Part B premium amount is $170.10 (or higher depending on your income). |
Part B deductible and coinsurance | $233. After your deductible is met, you typically pay 20% of the Medicare-Approved Amount for most doctor services (including most doctor services while you're a hospital inpatient), outpatient therapy, and durable medical equipment (dme) |
Part C premium | The Part C monthly premium varies by plan. Compare costs for specific Part C plans. |
Part D premium | The Part D monthly Premium varies by plan (higher-income consumers may pay more). Compare costs for specific Part D plans. |
Pulled from Medicare.gov on 6/25/2022.
Why would anyone CHOOSE to have Original Medicare (OM)?
If they have a high level of Medicaid and their doctors do not accept any MA/MAPD plans.
If they don’t have any affordable MA/MAPD plans in their area, it may be more cost-effective for some people to just stick with OM+PDP and apply for “Sliding Scale” financial assistance directly from their doctor’s office and local hospitals.
Some locations don’t have any MA/MAPD plans. Typically, these are very rural areas with a very low population.
Most people pay $0 for Medicare Part A and $170.10 for Part B. The exceptions are listed below.
Those with qualified Medicaid levels
NOTE: FBDE, QMB, QMB+, SLMB, SLMB+, and QI do not pay Part B Premium, but QDWI Medicaid beneficiaries do have to pay the Part B premium.
Those enrolled in Medicare Advantage plans that pay a portion, or all, of their Part B premium (MA/MAPD plans with the Part B Reimbursement/Giveback Program).
Those with very HIGH income may be subject to an additional monthly cost, called the Income Related Monthly Adjustment Amount (Part B IRMAA).
The following chart shows the Part B premium with IRMAA for each level of income.
If your yearly income in 2020 (for what you pay in 2022) was | You pay each month (in 2022) | ||
|---|---|---|---|
File individual tax return | File joint tax return | File married & separate tax return | |
$91,000 or less | $182,000 or less | $91,000 or less | $170.10 |
above $91,000 up to $114,000 | above $182,000 up to $228,000 | Not applicable | $238.10 |
above $114,000 up to $142,000 | above $228,000 up to $284,000 | Not applicable | $340.20 |
above $142,000 up to $170,000 | above $284,000 up to $340,000 | Not applicable | $442.30 |
above $170,000 and less than $500,000 | above $340,000 and less than $750,000 | above $91,000 and less than $409,000 | $544.30 |
$500,000 or above | $750,000 or above | $409,000 or above | $578.30 |
Medicare Advantage Plans
Medicare Advantage plans have a contract with the Federal Government to provide ALL your Medicare A and B benefits for you, plus you usually get a bunch of extra benefits by having the MA/MAPD plan.
MA and MAPD plans HAVE TO INCLUDE:
MOOP of $7,550 or less
MAPD plans, specifically, must include Prescription Drug Coverage that meets the minimum requirements of Medicare Prescription Drug Coverage.
MA and MAPD can also include:
Part B Giveback/Reimbursement
Dental
Vision
Hearing
Over The Counter (OTC) Drug Allowance
Transportation
$0 monthly premium
Grocery cards
Flex cards for utility bills
Robotic pets for companionship
Annual allowance for accessibility equipment and supplies, such as ramps, hand rails, etc.
And many other benefits
MA Only plans do NOT include Prescription Drug coverage. Why would anyone CHOOSE that?
People with VA benefits and Tricare benefits may not need RX coverage in addition to their military benefits, but could benefit from the additional benefits:
Part B Giveback
Grocery cards
OTC allowance
Transportation
Flex cards for utility bills
Robotic pets for companionship
Annual allowance for accessibility equipment, such as ramps, hand rails, etc.
And many other benefits
Some people with VA Benefits have to pay co-pays for all their Dr. visits at the VA.
Some people just don't want to use the VA. They want the freedom to go to civilian doctors.
Some people are subject to the Part D Late Enrollment Penalty and don't want, or can't afford, to pay it.
The only ways to avoid paying the Part D Penalty are:
Don’t sign up for RX coverage
Apply and qualify for Extra Help/LIS
Shoppers that are not familiar with MA/MAPD plans can be a struggle, sometimes.
They think that MA/MAPD plans are “too good to be true,” and they may even declare that it's a scam! I assure you, MA/MAPD plans are not scams, they are just misunderstood. It is OUR job to educate shoppers on their options.
How can it be “FREE”!?!?!
$0 premium does not mean that it is free. Someone is paying for it! You continue to pay your Medicare Part B premium. Medicare then pays the insurance company to provide your Medicare Benefits for you. So, you pay a $0 premium to have the MA/MAPD plans that have a $0 premium.
MA/MAPD plans have ALL the benefits that Medicare A & B provide plus whatever additional benefits that are included with that MA/MAPD plan.
How can they include so many extra benefits?!?!?
If the insurance companies are taking care of the Medicare A and B benefits for you, then this takes the burden off the government (less hourly wages paid to Medicare employees, less benefits paid out of Medicare’s pocket, etc.). It is more efficient because insurance companies specialize in insurance. Insurance companies are basically pools of money backed by other pools of money, and they pay out in specified situations. Since Insurance companies specialize in insurance, it is more efficient and the Medicare Advantage Insurance Companies are able to provide additional benefits to Medicare Beneficiaries.
ADDITIONAL NOTES:
Plans vary from location to location and carrier to carrier.
Sometimes there are over 100 different plans in a single service area.
Sometimes there are 12 different plans from one carrier in a single service area.
The number of plans in an area depends on the population level of Medicare Beneficiaries in the area. The more plans in the area, the more competitive the carriers become, which means the MORE BENEFITS you will see in the plans.
Plans can vary greatly within each carrier's portfolio, as well.
Supplements
Medicare Supplements are NOT Medicare Plans. They will not show up in the MARx System because they are not contracted with the Federal Government like MA/MAPD plans are. MedSup plans are private insurance plans that help take care of the deductibles and coinsurance that Medicare leaves behind.
In most cases, MedSup insurance companies can sell you only a standardized MedSup policy. All MedSup policies must have specific benefits, so you can compare them easily.
The following chart is a brief breakdown of the different Medicare Supplement plans.
*Plans F and G also offer a high-deductible plan in some states (Plan F isn't available to people new to Medicare on or after January 1, 2020.) If you get the high-deductible option, you must pay for Medicare covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,490 in 2022 before your policy pays anything, and you must also pay a separate deductible ($250 per year) for foreign travel emergency services.
**Plans K and L show how much they'll pay for approved services before you meet your out-of-pocket yearly limit and your Part B deductible ($233 in 2022). After you meet these amounts, the plan will pay 100% of your costs for approved services for the rest of the calendar year. *** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission.
Retrieved from https://www.medicare.gov/sites/default/files/2022-03/02110-medigap-guide-health-insurance.pdf on 6/25/2022.
Guaranteed expenses if you choose a Supplement:
Shoppers have to pay a month premium to have a supplement.
Initial premiums can range from $70/month to $300/month and the premiums usually go up on the beneficiary as they age.
They still have to pay their Part B premium, in addition to their supplement premium.
Shoppers have to pay a monthly premium for a separate Prescription Drug Plan, if they want prescription drug coverage.
Shoppers have to pay a monthly premium for a separate dental/vision/hearing plan, if they want to have coverage for the following:
Preventative and comprehensive dental
Routine vision exams and glasses
Routine hearing exams and hearing aids
Why would anyone choose a Supplement?
They currently have significant medical issues and was told that Supplement is the most cost effective choice.
ANXIETY
They have significant concerns that they will have extensive medical issues in the future.
They could be irresponsible with money and not trust themselves to have $50 for a specialist copay when the time comes.
Someone told them it is the only option (or that they HAVE TO get a supplement) and no one has taken the time to educate them on MA/MAPD plans.
Someone told them that it is the safest financial option and no one has taken the time to really break down the anticipated costs between MedSup vs. MA/MAPD plan. No one has calculated their guaranteed costs of the Supplement and compared that cost to the anticipated costs of a specific Medicare Advantage plan. In other words, they chose a supplement without adequate information. We cannot make educated decisions without adequate information.
They want flexibility to go to any doctor they want, and no one has taken the time to educate them on the flexibility of many MA/MAPD plans.
Their doctor does not accept any MA/MAPD plans because they don’t pay the doctor as much as a supplement, or potentially other reasons. Medicare Advantage plans only allow the doctors to get paid a certain amount. Certain MedSups (F and G) can pay an additional 15% (Part B Excess Charge) on top of what Medicare dictates as appropriate charges.
Sometimes, it is more cost effective for a shopper to have a supplement, but the majority of Medicare Beneficiaries will benefit more from a MA/MAPD plan.
Most of the time, the reason that people have Supplements, instead of MA/MAPD plans, is because no one took the time to educate them on their options.
Prescription Drug Plans
Seniors are not required to have any Creditable Prescription Drug Coverage BUT if you go more than 63 days without creditable prescription drug coverage and eventually decide to enroll into a stand-alone PDP or MAPD plan, Medicare will charge a penalty for every month that you went without creditable prescription drug coverage. The penalty is assessed and applied by Medicare, NOT by the insurance carrier nor agent, and the penalty is about 32cents per month that you did not have drug coverage unless you qualify for Extra Help.
Regardless of what Plan you choose, if the plan has drug coverage, then Medicare will apply the penalty to your monthly premium for the rest of your life. If you are not enrolled into a plan with creditable prescription drug coverage, then Medicare cannot enforce the penalty, until you do enroll into creditable prescription drug coverage.
Some people choose to have Original Medicare and a Stand Alone PDP, or a Supplement and PDP.
The average Prescription Drug Plan premiums can range from $7-$99/month. Typically, MAPD plans have lower copays than a Stand Alone PDP, but it really depends on the plan.
Some people pay extra for Prescription Drug Coverage because of high income. The chart below shows the Part D IRMAA that will be assessed by Medicare based on income levels.
If your filing status and yearly income in 2020 was | |||
File individual tax return | File joint tax return | File married & separate tax return | You pay each month (in 2022) |
|---|---|---|---|
$91,000 or less | $182,000 or less | $91,000 or less | your plan premium |
above $91,000 up to $114,000 | above $182,000 up to $228,000 | not applicable | $12.40 + your plan premium |
above $114,000 up to $142,000 | above $228,000 up to $284,000 | not applicable | $32.10 + your plan premium |
above $142,000 up to $170,000 | above $284,000 up to $340,000 | not applicable | $51.70 + your plan premium |
above $170,000 and less than $500,000 | above $340,000 and less than $750,000 | above $91,000 and less than $409,000 | $71.30 + your plan premium |
$500,000 or above | $750,000 or above | $409,000 or above | $77.90 + your plan premium |