Medicare is actually pretty easy to understand once you familiarize yourself with the jargon and government shibboleths. If you read through the literature they send you in the mail you will be pleasantly surprised at how user friendly it is. I think the thing that trips people up is that there is quite a lot to know about Medicare, so if you have the patience it is worth knowing all of your options before making any decisions.
Part A
Medicare Part A covers inpatient hospital stays, nursing home care and other long-term care. You usually do not pay anything for Part A and are automatically enrolled as soon as you become eligible for Medicare.
Click here for a list of Medicare coverage services under Part A
Part B
Part B pretty much covers "everything else" except prescription drugs. It helps cover medically-necessary services like doctors’ services, outpatient care, and other medical services. Part B also covers some preventive services. Unlike Part A, you need to pay a monthly premium for Part B services, which is currently $96.40. This is deducted automatically from your Social Security so you don't have to worry about remembering to pay anything. (To keep it simple, I will not go into all of the caveats and provisos engendered when you have other supplemental insurances, are a veteran, or have other very special circumstances.)
Back to the topPart C
Medicare Part C is also known as Medicare Advantage (you may have heard it called Medicare + Choice as well). This is how it works: instead of getting your coverage through Original Medicare, you have the option of getting your coverage through a private insurance company. There are many different companies, like Aetna, United Healthcare, Humana etc. that have Medicare health plans. They are required by law to offer coverage at least as good as Original Medicare, but they may have additional perks. For example, if you don't like having to pay 20% of your doctor’s visits but would rather just pay a flat copayment of $20 you may choose to have a Medicare Advantage Plan. Each company and each plan have different peks. You would need to research each plan to see if it meets your needs. Additionally, each plan costs a different amount. Plans that have drug coverage will cost a little more than plans that don't.
HMO, PPO, or PFFS?
There used to be a very clear-cut line between an HMO and PPO. In recent years, those lines have become blurred. In the past, an HMO meant that you had to have a designated primary care physician through whom you would get all of your referrals for specialists. For many HMOs this is still true. However, there are a few companies that are eliminating the primary care physician requirement. The benefit of a PPO was that you did not have this restriction. However, a PPO was typically more expensive than an HMO. Again, this may or may not be true depending on the company. Both an HMO and PPO have a network of doctors and facilities from which you can receive services. With a PPO, you are allowed to go out of network, but you will be paying a much higher copay or percentage.
A PFFS, private fee-for-service, plan does not have a network of doctors. You are allowed to see any doctor that will accept the terms of the plan. Instead of flipping through a book to see if your doctor is in the network, instead you will need to call your doctor and ask them if they accept your specific health plan. This plan allows for much more freedom and flexibility when choosing your doctor or set of doctors.
So, here it is at a glance.
| HMO | PPO | PFFS |
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Original Medicare vs. Medicare Advantage
It should be obvious that having an advantage plan is generally a better bet than just using Original Medicare. All advantage plans must offer at the minimum the same benefits of Original Medicare. I'll show you a basic Medicare Advantage PFFS Plan versus plain Medicare. This plan would cost you about $30 per month.
Sample Medicare Advantage Plan Costs vs. Medicare
Additionally, these Advantage Plans often include drug coverage, so there is no need to worry about enrolling in a separate Part D drug plan.
The costs vary greatly from $0 to over $100 a month depending on the type of plan and amount of coverage you want. Medicare pays the health insurance company directly so your Social Security check will have an additional amount taken out of it each month. So, you will not only lose $96.40 every month you will also lose the additional cost of the Advantage Plan.
MSA and Special Needs Plans
There are two other types of plans you can purchase but they are not as popular. An MSA plan has very high deductibles; but, once those deductibles are met, all of your medical expenses are covered. Many companies do not offer this type of plan.
A Special Needs Plan focuses on people with very specific illnesses such as diabetes, HIV and congestive heart failure or people who are eligible for both Medicare and Medicaid. “They tailor their benefits, choose their providers, and create their list of covered drugs to best meet the specific needs of the groups they serve. They always include Part D prescription drug coverage.”* In many areas special needs plans are not offered, and multiple sclerosis is almost never one of the specific illnesses covered.
* from http://www.medicare.com/advantage-plans/medicare-advantage-plans.html
Back to the topMedicare Supplemental or Gap Coverage
Instead of replacing Medicare coverage like an Advantage Plan does, a Supplemental Plan fills in the gaps Medicare leaves open. According to federal law, each company is only allowed to sell you a standardized supplemental plan identified by letters A-K. The benefits listed in the chart below are benefits that each health insurance company has to offer by law. Usually the only difference between supplemental plans offered by different companies is premium cost.
Medicare Supplemental Plans A-L
Medicare plus Sample Supplement vs. Medicare Only
Having a supplemental can be a significant help in paying for healthcare cost. The cost of these plans varies widely from region to region but, in general, tend to be more expensive than Advantage Plans.
Additionally, as of January 2006 Medigap plans no longer offer drug coverage. If you decide to purchase a Medigap plan you will also need to purchase a Medicare Part D prescription drug plan as well.
Because of the added expense of a Supplement Plan, most of you will probably choose to go to the Advantage Plan route.
Back to the topPart D
Medicare Part D is quite confusing for some people. It is Medicare's prescription drug coverage. When you become eligible for Part B coverage, you are not automatically enrolled in a prescription drug plan. You need to decide several things before picking a prescription drug plan.
If you're going to enroll in a Supplement Plan or an Advantage Plan, you need to decide to get one with or without drug coverage.
- If the Advantage/Supplement Plan does have drug coverage, is it better than what you can get through Medicare?
- If the Advantage/Supplement Plan does not have drug coverage, are you willing to pay an additional monthly fee for a prescription drug plan through Medicare?
Here are your choices:
- Medicare Advantage Plan with drug coverage
- Medicare Advantage Plan without drug coverage + Medicare Part D stand-alone drug plan
- Medicare Supplement Plan + Medicare Part D stand-alone drug plan
- Medicare Part B basic insurance + Medicare Part D stand-alone drug plan
Of course, if you are healthy as an ox and don't want drug coverage, you don't have to worry about purchasing a plan with drug coverage and you don't have to worry about enrolling in a Medicare Part D plan. I'm guessing, though, if you are reading an MS website, you probably need drug coverage.
Each plan has different levels of coverage, different formularies ("master" list of drugs covered) and different copays. The Medicare website has a good tool which lists all of the drug plans in your area, what is covered and how much you pay for generic/brand-name drugs, etc.
When choosing a Medicare drug plan you should be concerned with these things:
- Monthly premium
- If the drugs you take are in that plan's formulary (list of covered drugs)
- What are the copayments for each of your drugs specifically?
- Do they provide coverage in the gap? (see below)
Coverage Gap
Be aware that most companies offering drug coverage have what they call a temporary gap where they won't cover you for a while. After your total yearly drug costs reach a certain amount (usually $2,700) you pay 100% until your yearly out-of-pocket drug costs reach $4,350. After that, if there are any copays they are minimal and you won’t pay much for drug coverage. There may be some companies that offer coverage in the gap, but it's unlikely you will find many of them.
Cost
Part D plans vary widely in cost, very similar to Part B plans. If you enroll in one Medicare will automatically deduct the cost of the plan from your Social Security check and pay the health insurance company directly.
Back to the topCost Breakdown
Phew! That was a mouthful. When all is said and done, many of you really just want to know bottom line numbers. I can't really give you those. What I can do is tell you who you're going to be paying for each of your choices.
Cost breakdown chart for each Medicare option
| Original Medicare | $96.40 | |
| Medicare Advantage with Drug Coverage | $96.40 + the cost of the plan | Plans range from $0 to >$100 |
| Medicare Advantage w/o Drug Coverage | $96.40 + plan cost + Part D cost |
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| Medicare + Supplemental Plan | $96.40 + plan cost + Part D cost |
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