So I’ve heard that there are insurance carriers that will cover the 20% of your healthcare costs that original Medicare doesn’t cover. Is this true?
Yes. Medicare will pay insurance companies upwards of $1,000 a month for managing your Medicare. This means that the insurance carrier will replace, or takeover, your Medicare Part A and Part B and will add additional benefits to entice you to join their plan. This is called a Medicare Advantage plan or Medicare Part C. Some of these plans do not have a monthly premium and many of them are an HMO type plan where you have a primary care doctor who refers you to specialists as needed. The most alluring element of this type of plan is that it usually has a $0 monthly premium. Free.
I’ve also heard that there is something called a Medicare supplement insurance policy. What is that?
Medicare supplement insurance will actually cover the 20% that original Medicare (parts A and B) doesn’t cover. So when you go to the doctor, for example, you show your Medicare card and your supplemental insurance card. Instead of the insurance carrier taking over your original Medicare and filling in the gaps, the supplement will leave your Medicare as is and add additional insurance. The benefit of this plan is that it allows you to see any doctor that takes Medicare as opposed to the Advantage plan that usually requires you to be in a network. The drawback of this plan is that it can be quite expensive and isn’t affordable for a lot of folks.
Well which one is better: A Medicare supplement or Medicare Advantage?
There are many insurance carriers and types of plans out there and there is no absolute best. There is only what’s best for you, and that depends on a few factors such as your prescription medications, your doctor, how often you travel etc.
As you well know, this is a complicated subject for a lot of folks but I’ll continue to try and keep it simple and shed light on any upcoming changes in Medicare.