Medicare explained! Medicare Made Clear! Understanding Medicare! No matter how we word it, understanding Medicare is not always as easy as it looks.
In this video, I am going help you learn about Medicare, explained in an easy to understand format. By the end of this video, Medicare explained will be made clear to you. You will understand how Medicare works. You will understand Medicare Part A & Medicare Part B and the choices you have to make once you sign up for Medicare.
Once you sign up for Medicare you will have to choose from one of three options. In this Medicare Explained video, we will go over each of those three options and pros and cons you should consider before you make a decision. Coming up!
Hi, I am Matthew Claassen with MedigapSeminars.org. I don’t intend for this to be a long boring video. Medicare explained properly will make understanding Medicare easy and can be done in under 20-minutes. That’s my goal with this video.Once you understand the Medicare basics of Part A and Medicare Part B, you will be faced with choosing one of three paths to take with your Medicare. This will be the most important Medicare decision you have to make because it could set you on a course that will impact the quality of your medical care and can potentially be irreversible.
To keep this video brief, I have a separate video that covers how, when and where to sign up for Medicare Parts A & Medicare Part B. I have it linked in the upper right of this video, you’ll see a white circle with a letter “i”. You can click on that at any time to go to the video on how to sign up for Medicare.
First up in this Medicare Explained video is terminology.
I know that Learning Medicare can be a bit confusing. But once you get past the terminology it all falls into place.
Let’s get started first in this Medicare Explained article with some terminology I need to make sure you know. This is a common area where people get confused. We have found that Medicare explained with this terminology first is easier to understand.
The first terms you should be familiar with are common insurance terms; “deductible”, “co-pay” and “co-insurance”.
A deductible is an amount of money you pay upfront before your insurance kicks in. You pay the deductible first.
A co-pay is a portion of the bill you cover after the deductible is paid. The co-pay comes after the deductible is paid and is a dollar amount. For example, if you pay $20 every time you see a doctor for an office visit, that is a copay.
Co-insurance is like a copay, except it refers to a percentage of your bill instead of a dollar amount.
Putting these terms together, if you have a $200 deductible, a $20 co-pay, and 20% co-insurance; it means that when you see a doctor you pay the first $200. That is your deductible. When you are at the doctor’s office you pay $20 for the appointment. That is your co-pay. When you get the bill and say it’s for $100, you will pay 20% or another $20 as your coinsurance.
That being said, it’s also important to not lose sight of the Forest for the trees.
It’s important to understand this terminology, but don’t get lost in the details of deductibles and co-pays. Medicare explained by including a discussion on these terms of Medicare is important. I mentioned earlier that you will have one of three choices to make. We will get those shortly. But, two of those three choices renders the deductibles, copays, and coinsurance described in your Medicare & You Guidebook Moot. That makes Medicare Explained easier too.
Once you sign up for Medicare you will have to choose from one of three options. We will go over each of those three options and pros and cons you should consider before you make a decision.
With terminology out of the way, next in the Medicare Explained video is Medicare Part A & Medicare Part B.
Medicare Explained: Medicare Part A & Medicare Part B.
Medicare Part A is that portion of your health insurance that pays for your healthcare whenever you are an inpatient in a medical facility. As soon as you become an inpatient in a hospital, Medicare Part A takes over. The same when you become an inpatient in a skilled nursing facility or hospice. The one exception is that if you are not able to physically get to a medical facility for healthcare, Medicare Part A also pays for home health care.
Think of Medicare Part A is inpatient insurance.
For most of us, we have paid for Medicare Part A by paying a Medicare tax in our paychecks. That’s that 1.45% tax that is deducted each pay period. As long as you or your spouse has paid that tax for at least 10-years, your Medicare Part A is paid for.
You do not pay a monthly premium for Part A unless you or your spouse did not pay that Medicare tax for at least 10-years.
For most of us, Medicare Part A is already paid for.
Next Up In This Medicare Explained Article is Medicare Part B
Medicare Part B is the part of Medicare that pays for outpatient and physician services.
This is the portion Medicare insurance you use when you see a doctor or have lab tests or physical therapy and so on. Medicare Part B also includes some wellness coverage.
Medicare Part B is the part of Medicare people use most often because most of our medical care is via outpatient services. Even many surgeries and hospital services are now done as an outpatient and are thus covered under Medicare Part B.
Everyone has to pay for their Medicare Part B insurance. No matter what choices you make with your Medicare, unless you are still covered under group health insurance you will have to have Part B and you will have to pay for it.
How much you pay depends on your reported adjusted gross income as of two years ago. And it depends on when you started your Medicare.
In 2017 people new to Medicare who made $85,000 or less individually, or $170,000 or less when filed jointly paid $134 per month for their Medicare Part B. $134 per month.
If your income was higher, you pay more. It’s called an “Income-Related Monthly Adjustment”.
An easy way to look up this year’s levels and adjustments is to go to Medicare.gov and search for “Cost of Medicare Part B”. In my previous video on How to Sign Up for Medicare and I talked about when and how you can delay enrolling in Medicare Part B. If you are not clear on that, please see that brief video. Adding those details here would be too much for an article on Medicare Explained.
We have Medicare Part A is “inpatient health insurance”. If you are an inpatient in a hospital, nursing facility, hospice or at home for home health care; that’s all Part A.
Medicare Part B is outpatient and physician services, which includes wellness care, lab work and medical equipment and therapy.
Together, Medicare Part A and Medicare Part B are called Original Medicare.
That is an important term you will hear often. Medicare Part A and Medicare Part B together are called Original Medicare. They are the pillars, the foundation of Medicare.
Your Original Medicare (Part A & B) is good anywhere in the country. You can see any doctor, go to any medical facility in any state or territory, as long as they accept Medicare. You do not need to get permission from a primary care physician. You have both freedom to go where you need and control to see who you choose.
Both Medicare Part A & B have co-pays and deductibles. Both. In addition, Medicare part B has a 20% coinsurance. That means you pay 20% of all Medicare Part B charges.
Rather than go through the details of each co-pay or deductible it may be best for you to understand your options. You have three options or three choices. Two of those three choices renders the co-pays and deductibles printed in the Medicare & You Guidebook moot.
Next in our Medicare Explained video are your three choices.
You can do one of three things:
# 1 Do nothing. Just keep Original Medicare (Your Part A & B). This is the only choice that makes understanding those co-pays and deductibles very important. This is not an advisable choice because Original Medicare was never intended to be stand-alone health insurance. You will find when going over the details of the copays and the limits of the coverage that there is no maximum out-of-pocket limit on your potential financial obligation. You are at substantial financial risk.
Still, this is a choice some people make even after watching the Medicare Explained video.
# 2 You can trade in your Medicare Part A and Medicare Part B for a Medicare Advantage Plan. Medicare Advantage plans are also called Medicare Part C.
Most people know Medicare Advantage plans as the Medicare HMOs or PPOs. There are other types of Medicare Advantage Plans but those are seldom used and goes beyond the scope of this video.
You give up the Medicare you earned for a Medicare equivalent run by a private insurance company. You still have to pay for your Part B monthly premium. But that money goes to the insurance company.
If you decide to get a Medicare Part C Advantage Plan, you throw out the door all the copays and deductibles for Medicare Part A & B that are in the guidebook and replace them with the copays and deductibles printed in your Medicare Advantage Plan Booklet.
I have a video on Medicare Advantage plans. But here, briefly, are some pros and cons.
You should know, Medicare Advantage plans are not enhanced Medicare coverage. By design and regulation, these Medicare Advantage plans offer health coverage that is Actuarially Equivalent to the benefits you receive from Medicare Part A & B. When Medicare is explained properly, you realize that Medicare Advantage Plans should only be considered as a last resort.
What does Actuarially Equivalent mean? It means that of all the people on that particular plan; half the people will pay less for healthcare than those that just have Medicare A & B and half will pay more. Your experience will be different than the next person and whether you will pay more or less than average will depend on your health.
On the Positive side; some of these Medicare HMOs and PPOs have no premium is some parts of the country. They are often sold as no-premium Medicare, especially in the southern half of the country. That is not entirely true. You pay the same as you do with Original Medicare Parts A & B. No less. But you could pay an additional premium as well. In some states, Medicare Advantage plans have an additional monthly premium even though they have more limited care.
These MAPD plans will at least put a cap on your maximum annual out-of-pocket expense. It limits your financial risk. Unlike having just Original Medicare where there is no cap on financial exposure, Medicare Advantage plans have a maximum annual out-of-pocket you will pay during any calendar year. How much this is will vary from plan to plan and year-to-year. You have to check the plan you are considering.
Medicare Advantage plans often include a bundled prescription drug plan. That is a positive if you have no or very few generic prescriptions. It might save you $20 a month. But it can be a negative if you have prescriptions and can lower your prescription costs with a stand-alone drug plan.
This is important! You are not allowed to have your own stand-alone drug plan and a Medicare HMO or PPO at the same time. If you have a Medicare Advantage plan and then enroll in a stand-alone Prescription Drug plan during Open Enrollment, you will be kicked out of your Medicare Advantage plan.
Also, it is important to understand that Medicare Advantage Plans are local coverage. If you are a snowbird, and RVer or just travel the country that should rule MAPD as an option.
With a Medicare Advantage plan, you have a select network of doctors or hospitals you can see. You must stay within that network in some plans, like HMOs. With an HMO you have no insurance outside of your network, other than an emergency. In some plans, like the PPOs, you have insurance outside of your Network but it cost you more and your maximum out-of-pocket limit is much higher.
Lastly, Medicare Advantage plans change every year. The doctors and hospitals can change. The co-pays, coinsurance, and deductibles can change. Any feature of the plan can change. As a result, you must re-look at your plan benefits and network every year to see if you want to keep the plan for the coming year or change. You must do this shopping during the Annual Election Period from October 15 – December 07.
You can get a Medicare Advantage plan and switch plans during Open Enrollment regardless of your health history. There are no medical questions asked.
When you look up Medicare Advantage plans you will notice that Medicare gives them a Star Rating; from one to five stars. They do this to help you judge how well the plan, the insurance company, fulfills its obligations and provides customer service.
I will touch on this again in a moment, but that star ranking is important when evaluating a Medicare Advantage plan.
So, your first choice is to do nothing and just keep your Original Medicare. Your second choice is to trade in your Medicare for a Medicare Advantage plan and hope it’s a good experience.
#3 Your third choice is to keep your Original Medicare Parts A & B, but add a Medicare supplement plan that pays the co-pays and deductibles that come with just Original Medicare, so you don’t have to.
You don’t have to worry about learning all the copays and deductibles in Medicare when you have a supplement plan because the supplement plan will pay them for you. When you have a Medicare supplement plan, you can limit your out-of-pocket expenses. That makes Medicare Explained easier!
These supplement plans are subservient to Medicare. Medicare tells them what to pay and when to pay it. The Medicare supplement insurance company has no say, there is no debate. That is completely different than with a Medicare Advantage plan.
There are no star rankings with a Medicare supplement because there is no need for star rankings. The supplement pays what Medicare tells them to pay. Your experience in paying claims should be the exact same regardless of which insurance company you use for your Medicare supplement.
Medicare supplement plan benefits are also standardized. The different plans are known by letter. For example, there is a Medigap Plan F, a Plan G, and Plan N and so forth. Ten in all.
Every Plan G is identical in the benefits it offers. Every Plan N is identical in the benefits it offers and so forth. The only difference from one company to the other is the price of the plan and the insurance companies pricing strategy.
With a Medicare supplement plan, you can improve your Medicare coverage and you can still see any doctor, go to any medical facility in the entire country as long as they accept Medicare.
A doctor or hospital does not need to accept whatever individual insurance company provides your supplement. As long as they accept Medicare they will accept any Medicare supplement plan form any insurance company.
The doctor just bills Medicare. Medicare pays its’ portion and then instructs the Medicare supplement company to pay its portion. It’s that simple.
Medicare Supplement plans have their own cost and you need to get a separate Part D prescription drug plan. Most people find that cost to be substantially less than the cost of insurance when under 65. As long as that cost can fit into your budget, Medicare supplement plans offer the best health insurance coverage in the country.
This is important! You are only guaranteed to get the Medicare Plan of your choice when you are new to Medicare and within 6-months of starting your Medicare Part B. That is one of the most important facts shared in this Medicare Explained article.
The first six months after you started your Medicare Part B is called your Medicare supplement initial enrollment period. Outside of that time period, you will have to qualify medically to get a supplement plan. If your health history includes serious events like cancer, heart attack, stroke, complications from diabetes, implanted medical devices and so on, you may not be able to get a Medicare supplement.
So if you choose to go with a Medicare Advantage plan and want to switch to a supplement at some point in the future, you may not have that option. It depends on your health.
You can always switch from a Medicare supplement to a Medicare Advantage plan. But you cannot always switch from a Medicare Advantage plan to a Medicare supplement.
Those are your three choices when you start Medicare, explained to make understanding Medicare easy.
- You can just keep Medicare Part A and Medicare B. Pay whatever deductibles and copays due out-of-pocket.
- You can trade in your Medicare Part A and B for a Medicare Advantage Plan (also known as Medicare Part C). There are advantages and disadvantages to that which must be weighed very carefully before making that decision. For more details please see my video on Medicare Advantages linked below.
- Third, you can enhance your coverage with a Medicare supplement. You should consider the cost of the supplement. You may also live in a state with specific laws that improve the Medicare supplement choice.
I have several videos comparing the different Medicare supplement plans. They will be linked below and at the end of this video.
Lastly, why have we not talked about Medicare Part D prescription drug plans in this Medicare explained video? Rather than drag this video on too long, I strongly suggest you view my Video title Medicare Part D Explained and find out why I strongly suggest that you never take a recommendation for a specific Medicare Part D plan from an insurance agent or broker.
If you subscribe, you can easily find that video on my YouTube page, Medicare Part D Explained.
I also have a video that takes you step by step on how to shop for your own Medicare Part D plan using the Medicare.gov website. Don’t take an agent or broker’s word for which Plan D is right for you. Always take the steps I outline in that video to shop for your Part D plan.
I hope you found this information helpful and enjoyed our Medicare explained video. Please Like this video, press the thumbs up for me if you found this information useful. When you do, you help other people researching the same questions you had, find this video.
If you want more, subscribe to my YouTube channel so you can see all my Medicare videos.
Now it’s your turn. I make these videos for you. including this Medicare Explained video.
Please Leave me a comment below and let me know what part of this video that you found most informative or that you plan on using as you shop for Medicare
And if you have a question I did not answer, ask below and I will respond. I am really interested in what you have to say.
I am Matthew Claassen with Medigap Seminars.org, thank you for watching. I hope the Medicare Explained article and video made Medicare clear and easy to understand. Call our office at 800-847-9680 for more information or for a free quote comparison.
For Part D drug plan info visit: http://www.medicare.gov
Also visit: https://en.wikipedia.org/wiki/Medigap
Get your Medicare Guide to supplements here: https://www.medicare.gov/Pubs/pdf/02110-Medicare-Medigap.guide.pdf
And your Medicare & You Guide here: https://www.medicare.gov/pubs/pdf/10050-Medicare-and-You.pdf
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