Medicare Zero Premium Plan – Zero Premium Supplement – Medicare Myths
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There is no such thing as a “zero premium” Medicare Supplement plan. If you see any plans advertised as being “zero premium” those are not Medicare Supplements but Medicare Advantage plans, and they are not “zero premium”. How they should be advertised is “no additional premium” plan. The way a Medicare Advantage plan works is the premium you would pay to your Medicare Part B, is now paid to a private insurance carrier instead of Medicare. You are still paying for those plans. It is important when choosing between these two plans that you know the differences.
Here is how the Medicare Advantage Plans work, the Plans that are advertised as $0.00 premium are actually the same price as Medicare, so you will still pay the $135 for your Part B Premium. The reason that some Medicare Advantage Plans are the same prices as Medicare is because these plans to not actually pay the bills that Medicare charges, instead the Plan replaces what Medicare Part A and B would charge, with the Plan’s own set of bills.
Summary of a Medicare Advantage Plan:
- A Private Company provides a health plan that you will use instead of using your traditional Medicare.
- Low monthly premium
- Requires you to pay some bills when you use the Plan. You will have copays, co-insurance and sometimes a deductible.
- You have to go to certain Doctors, Hospitals and other Providers. (HMO / PPO)
- Has a max out of pocket for your protection. Once you have paid a certain amount, the plan will pay the rest of your healthcare cost. For 2019, most HMO’s are around $4,000.00 and the PPO Plans are around $6,700.00.
In most counties, the Medicare Advantage Plans have been losing funding over the past few years. This has had 2 major negative consequences:
- The Medicare Advantage Plans have cut benefits and/or increased the out of pocket requirements.
- Less Doctors, Hospitals and Providers are accepting the Plans.
Even with these consequences, a Medicare Advantage Plan offers coverage that is usually as good as most group plans when people were working.
Summary of a Medicare Supplement Plan:
- Medicare (A and B) are your primary insurance and the Supplement Plan pays the bills that Medicare would normally make you pay.
- You can go to any Doctor, Hospital, or Provider in the Country that accepts Medicare.
- You will very rarely have a healthcare cost other than your monthly premium. (My favorite Supplement Plan is the Plan G, once you pay the first $185.00 of your medical bills, you are done for the rest of the year)
- Does have a higher monthly premium than a Medicare Advantage Plan. A Supplement is usually between $80.00 and $120.00 per month.
Here are some examples:
When you go the hospital, Medicare will require you to pay the first $1364 (Part A Deductible). Well, a Medicare Advantage Plan does not pay this $1364 for you, instead the Plan will just charge you a different amount, like $300 per day each day you are in the hospital.
If you get a surgery, the Medicare Advantage Plan will not pay the 20%, instead you will have a copay or you still might have to pay the 20%.
The only type of coverage that actually pays the bills that Medicare A and B would charge you, is a true Medicare Supplement Plan. All Medicare Supplement Plans have a premium, and in return you will not have any surprise bills. You can choose a Medicare Supplement Plan that pays all of the approved Services bills. With this Supplement Plan when you go to the hospital, your Supplement Plan actually pays the $1364 that Medicare would normally charge you. If you get a Surgery, the Supplement Plan actually pays the 20% for you.
It is important to understand that the only time in your life that you are automatically approved for a Medicare Supplement Plan is when you first join Medicare. So, if you choose a Medicare Advantage Plan and later want to upgrade to a Medicare Supplement Plan, you will have to medically qualify.
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