Medicare Made Simple

What is Medicare?

Medicare is insurance offered to people that are 65 or older and to people that have certain disabilities. There are two parts to Medicare, Part A and Part B. Part A is what you use when you enter the hospital or a Skilled Nursing Facility. Part B is what you will use for your medical and Doctor bills.

How much does Medicare cost per month?

Most people will only have to pay a monthly premium for Part B. The current Part B Premium for most people is $134.00 per month.

What will I have to pay when I use Medicare?

  • Medicare Part A: When you go to the hospital you will have to pay the first $1,1316 for each benefit period. When you enter a Skilled Nursing Facility, you will have to pay $161.00 per day starting day 61.
  • Medicare Part B: You will have to pay the first $183.00 per year for medical and Doctor bills, then Medicare will step in and pay 80% of your bills. Please note, that there is no max out of pocket for the 20% that you have to pay.

What are my coverage options for Medicare?

It may feel like you have a hundred different coverage options. However, you really only have 2. All of those options fit into 1 of 2 types of coverage.

    1. Medicare Advantage Plan
    2. Medicare Supplement Plan (Also called a “Medigap Plan”)

Every option that you are reviewing online, or getting plan information fits into one of the above, it is either an Advantage Plan or a Supplement Plan.

Understanding which type of coverage you want is the first step and it will make choosing your actual Medicare Plan much easier. 

What is a Medicare Advantage Plan?

An Advantage Plan is not a Supplement Plan, it is a private alternative to Medicare. Advantage Plans will not pay the bills that Medicare would normally pay. Instead, it will charge you a different deductible, different copays and different co-insurance compared to Medicare.

    • Advantage Plan Summary:
      • Low monthly premium. (Sometimes advertised as $0.00 per month)
      • You will usually have to pay a fee every time you use the plan. ($15.00 copay for PCP visit, $300.00 per day each day you are in the hospital, etc…)
      • You have to go to certain Doctors, Hospitals and Providers. (HMO or PPO Network)
      • You will have to get prior authorizations for some procedures.
      • You will have to get referrals to go see a specialist.

What is a Medicare Supplement Plan?

A Supplement Plan will be the best coverage you have ever had in your life. If you go to the hospital, your Supplement Plan will pay the $1,316.00 that Medicare does not pay. When you go to the Doctor, get lab work or even a surgery – Medicare will pay 80% and your supplement plan will pay the other 20%.

With a supplement plan, you will pay more per month but you are paying for:

  1. Flexibility – You can go to any Doctor that accepts Medicare and you do not have to get prior authorizations for procedures.
  2. Predictability – You know that as long as you pay your monthly premium, you will rarely have a bill that you have to pay. (My favorite supplement plan is G. With Plan G, all you pay is the Part B Deductible)

So which type of coverage is best for you? 

Ask yourself this question: “If I chose a supplement plan, and I pay $120.00 per month, and I have a good year with my health, let’s say I didn’t really use the supplement plan that much. Would I consider that $120.00 per month a waste of money or because I am 65 or older, and I am more likely to use my health insurance in the next 5 years compared to the last 5 years, the $120.00 per month is a cost of living?”

Waste of money – If you chose a “waste of money“, and you do not mind being told what Doctors you can go too, then you are a “Medicare Advantage Plan person“.  

Click here for a guide on how to choose the right Advantage Plan.

Cost of living – If you chose “cost of living” then you are a “Medicare Supplement Plan person“.

Click here to learn more about supplement plans. (Also called, “Medigap Plans”)

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