by Ashley Thurow
Medicare—something we often don’t think about, learn about, or even review until we either turn age 65, or find ourselves in a situation where we are helping a loved one navigate their medical care. Sooner or later, you are likely to interact with the Medicare system, and it’s not as intuitive as one might think. I’ve partnered up with Joseph Barrows— a licensed insurance agent at the Medicare Resource Center in Grand Junction—to help you better understand Medicare options before open enrollment season begins October 15th.
But wait—why explore options? Isn’t Medicare free? The short answer is no. Medicare is not free, and even though you may see some of your medical expenses go down once you are on Medicare, they definitely will not disappear. Medicare actually works a lot like traditional insurance, with co-pays, deductibles, monthly premiums, and non-covered services that patients must navigate. Let’s start with a little background on the program.
Original Medicare—the benefit passed into law in 1965 and provided by the federal government—consists of Part A and Part B. Part A typically covers expenses such as hospital stays, inpatient care, hip replacements, skilled nursing, rehab and hospice. It’s easiest to think of Part A as hospital insurance because hospital expenses fall under this category. There is a Part A deductible for inpatient stays of $1,484.00 in 2021 for the first 60 days. Part B can be referred to as medical insurance because outpatient services such as doctor visits, outpatient surgery and diagnostics are covered in this category.
Part A is premium-free for most people, but Part B has a monthly premium that is based on your annual income. In 2021, most people will pay $148.50 per month. Original Medicare Part A and B covers 80 percent of medical bills, and the remaining 20 percent is covered by you, the patient. There are also many services that aren’t covered by Original Medicare at all. For example, hearing aids, dental cleanings, prescription drugs, and long-term care don’t qualify. These are examples of things that most seniors require, so it is important to consider how you will intend to handle those expenses. Fortunately, you have options. This is where Supplemental Medicare, Part D, and Medicare Advantage come into play.
To keep it simplistic, I’ll discuss two main options. Option 1 called is called Medicare Supplemental and can be added to supplement your Medicare Part A and B. You can also add or decline Part D in Option 1, which is prescription drug coverage.
Many people aren’t aware that Original Medicare won’t cover the prescription drugs that you pick up at your local pharmacy. This can be a devastating realization for seniors that require multiple ongoing medications. I remember my grandfather, who experienced sticker shock when, during the last months of his life, he required a heart medication that cost him over $1,000 per month. He had not budgeted for such an expense, and for a person on a tight fixed income, it was a difficult expenditure to take on. He did not have a Supplemental or Medicare Advantage plan, and since this occurred outside of open enrollment, he was left without any option but to pay out of pocket. As you explore your options, I would strongly encourage you to take a look at adding Part D to your coverage.
Option 2 is referred to as Part C or Medicare Advantage (MA). Unlike Original Medicare, Medicare Advantage is offered through private insurance companies. Statewide, almost 45% of our population is on an MA plan, but less than 25% of Mesa County’s population use MA plans. In Mesa County, there are multiple Medicare Advantage plans offered by four insurance providers: Rocky Mountain Health Plans; Anthem; Aetna; and Humana.
Medicare Advantage plans cover all services of Medicare Part A and B with richer benefits. For example, did you know that Medicare Advantage covers the cost of your health club membership under some plans? There are often additional benefits provided like routine physicals, dental, vision and hearing exams, hearing aids discounts, too. Over-the-counter purchase cards and meals after an in-hospital stay are part of most benefit packages on Medicare Advantage. Many MA plans will require you to pay a modest monthly premium, but some are ZERO! The nationwide average MA monthly premium is $25.
The main benefits of Medicare Advantage over Original Medicare include a maximum out-of-pocket patient expense, fixed co-pays for most procedures, and can include the Part D prescription drug plan. Having one carrier to deal with does add a convenience factor that helps keep things simple. But as a consumer, you should also be aware that there are exceptions including durable medical equipment like oxygen, wheelchairs, prosthetic devices and chemotherapy drugs. These remain under the 20% coinsurance, like Original Medicare.
As you research the right Medicare plan for you and your loved one, it’s important to make sure the plan you’re considering includes the providers you wish to see or the cost to you if you continue to see a provider out-of-network. If you sign up for a Medicare Supplemental or Medicare Advantage plan, it will function quite similarly to traditional insurance and some plans have a more restrictive network of hospitals and doctors than others. You should also make sure that the list of necessary prescriptions you take are covered and which Part D plan is best for you based on their costs and coverage.
Medicare.gov is a great place to start to learn more and compare plans. As you research your options, we recommend writing a list of questions (alongside your provider and prescription list) to take to a Medicare insurance agent. Agents are paid by the companies they work for, not their clients, which make them a great and safe place to go before you enroll. Agents are also independent of insurance companies, so they are able to truly work in your best interest to find a plan that suits your needs.
If not annually, we would encourage you to review your plan at least every couple of years. Like all insurance, Medicare plans may change from one year to the next.
Save the date—open enrollment to sign up or switch your Medicare plan is October 15 through December 7th!
Ashley Thurow is the Executive Director of Monument Health, a clinically integrated health network, that works with hospitals, providers and insurance to create innovative health solutions for its members. Monument Health offers Medicare plans in its network. Joseph Barrows, LUTCF, is a licensed insurance agent and Sales Director, at Medicare Resource Center of Grand Junction. Insurance agents are paid by the insurance companies and not by their clients.