Medicare Coverage and Enhancement Options

Medicare Coverage and Enhancement Options 

MONTHLY PREMIUM/COST OF OPTIONS 

  1. Original Medicare: $134.00 plus possible income related increase.
  2. Medicare Advantage HMO: Approximately $45.00 to 60.00.
  3. Medicare Advantage PPO: Approximately $93.00 to $195.00.                                 
  4. Standard Plan F Medicare Supplement:  (female) $125.00 (male) $140.00 less 7% household discount.
  5. Standard Plan G Medicare Supplement: (female) $98.17 (male) $109.95 less 7% household discount.
  6. Standard Plan N Medicare Supplement: (female) $84.17 (male) $96.25.
  7. Standard Plan K Medicare Supplement:  $46.72 less 5% household discount.
  8. High Deductible Plan F Medicare Supplement:  (female) $27.95 (male) $30.33.

OUT OF POCKET EXPOSURE/RISK 

1. Original Medicare: With original Medicare only, there is no cap on your annual out of pocket exposure. For example, if you had an extended hospital stay of 150 days, you would owe $49,266.00. If you were in the hospital for a year, you could owe more than $1.7 million. It is strongly recommended that you select an option (2 through 8) other than original Medicare only.

2. Medicare Advantage HMO (approximate amounts only): The stated annual out of pocket limit/cap is approximately $6,700.00. The out of pocket costs include items such as hospitalizations ($226.00 per day for days 1-6), skilled nursing care ($160.00 per day for days 21-100), primary care physician visit ($5.00) and specialist doctor visit ($45.00). This type of plan is best suited for healthy budget-minded individuals who do not have chronic or recurring illnesses or a family history of illness. Note: there are limited medical plans that you can add for about $25.00 per month extra to help cover some of this out of pocket risk.

3. Medicare Advantage PPO (approximate amounts only): The stated annual out of pocket limit/cap is approximately $6,700.00. The out of pocket costs per year include items such as hospitalizations ($290.00 per day for days 1-6), skilled nursing care ($155.00 per day for days 21-100), primary care physician visit ($10.00) and specialist doctor visit ($45.00). This type of plan is best suited for healthy budget-minded individuals who do not have chronic or recurring illnesses or a family history of illness.

4. Standard Plan F Medicare Supplement: Your annual out of pocket exposure is zero. With this plan, you would owe nothing toward deductibles or coinsurance. Your only cost is the monthly premium. This type of plan is more expensive to purchase but with it you have peace of mind knowing exactly what you will be paying each month regardless of health issues you might develop. This plan is especially well suited for anyone with chronic health conditions.

5. Standard Plan G Medicare Supplement: Your annual out of pocket exposure is limited to the Medicare Part B deductible of just $183.00. With this plan, you would owe no other amounts for deductibles or coinsurance. This type of plan if very similar to the Standard Plan F but is a little less expensive.

6. Standard Plan N Medicare Supplement: There is no stated annual out of pocket limit. However, the out of pocket costs are limited to all of the Medicare Part B deductible ($183.00), all Part B excess charges (15% of the Medicare allowed amount) and a $20.00 copay for each doctor visit. This type of plan is best suited for healthy budget-minded individuals who do not have chronic or recurring illnesses or a family history of illness but still prefer the flexibility of a Medicare supplement plan.

7. Standard Plan K Medicare Supplement: Your annual out of pocket exposure is limited to $5120.00 plus all Medicare Part B excess charges (15% of the Medicare allowed amount). The out of pocket costs that cannot cumulatively exceed $5,120.00 per year include all of the Medicare Part B deductible and 50% of 1) Medicare Part B coinsurance, 2) blood, 3) Part A hospice care, 4) skilled nursing and 5) the Medicare Part A deductible. This type of plan is best suited for healthy budget-minded individuals who do not have chronic or recurring illnesses or a family history of illness but still prefer the flexibility of a Medicare supplement plan.

8. High Deductible Plan F Medicare Supplement: Your annual out of pocket exposure is limited to $2,140.00. The out of pocket costs that cannot cumulatively exceed $2,140.00 per year include 1) the Medicare Part B deductible, 2) Medicare Part B excess charges and 3) foreign emergency travel. The costs also include 100% of 1) Medicare Part B coinsurance, 2) blood, 3) Part A hospice care, 4) skilled nursing and the Medicare Part A deductible. This type of plan is best suited for wealthy and healthy budget-minded individuals who do not have chronic or recurring illnesses or a family history of illness. This plan also works well for individuals who have other additional coverage such as through the Veterans Affairs.

OPTION SPECIFIC ISSUES 

1. Original Medicare: There is no good reason to have original Medicare only. The out of pocket exposure/risk is too great. This is especially true in light of the fact that a high deductible Plan F Medicare supplement costs just $30.00 per month and there are Medicare Advantage plans that can cap your out of pocket exposure/risk at roughly $6,700.00 per year and cost $45.00 per month to buy. In addition to out of pocket exposure/risk is the issue of doctor and hospital availability. Some doctors and hospitals such as the Mayo Clinic do not accept Medicare assignment. You can still use these doctors and hospitals, but be prepared to pay up front out of your pocket and then seek reimbursement for a portion of the charges from Medicare.   See Original Medicare Out Of Pocket Expenses.

2. Medicare Advantage HMO Plans: There are several issues with Medicare Advantage HMO plans in general. First, please understand that Medicare Advantage plans are not Medicare supplement or Medigap plans. One of the biggest issues you will have with a Medicare Advantage plan that you will not have with a Medicare supplement plan is doctor and hospital availability, both locally and when traveling. Many doctors and some hospitals such as the Mayo Clinic might not accept a Medicare Advantage plan. The second issue with Medicare Advantage plans is that the Medicare Advantage Plan company can change the plan design, change the premium or withdraw from the market at the end of each calendar year. The third issue is budgeting. Because you do not know how much, if any, of the $6,700.00 in annual out of pocket expenses you might incur in a given year, it is not as easy to budget as it would be with a Standard Plan F Medicare supplement where the out of pocket expenses are always $0.00. With a Standard Plan F Medicare supplement, you know exactly what your monthly cost will be.

3. Medicare Advantage PPO Plans: Same as option 2 above except the plan costs more to buy (for example $95.00 per month versus $45.00).

4. Standard Plan F Medicare Supplement: There are no issues with this plan with the exception that it costs the most. As with anything, you get what you pay for. If you want flexibility and peace of mind, this is the right plan.

5. Standard Plan G Medicare Supplement: Same as option 4 except the out of pocket risk is $183.00 per year. However, the premium savings more than offset this minimal out of pocket risk, making this plan actually better than Standard Plan F.

6. Standard Plan N Medicare Supplement: Same as option 5 except there is the additional out of pocket risk of 1) all Medicare Part B excess charges which is 15% of the Medicare allowed amount and 2) a $20.00 copay for each doctor visit. As to the Medicare Part B excess charges, there is really no way of predicting how high this figure could be. With that said, if you remain healthy and have no out of pocket costs, you would save $492.00 per year with the lower monthly premium. On the other hand, you could easily end up spending much more with the out of pocket risk not having a stated limit. You would still have access to most providers, including the likes of the Mayo Clinic.

7. Standard Plan K Medicare Supplement: There are two issues with this plan, including the out of pocket risk of $5120.00 per year plus all Medicare Part B excess charges which is 15% of the Medicare allowed amount. As to the Medicare Part B excess charges, there is really no way of predicting how high this figure could be. With that said, if you remain healthy and have no out of pocket costs, you could save almost $1,000.00 per year with the lower monthly premium. On the other hand, you could easily end up spending much more with the out of pocket risk of $5,120.00. You would still have access to most providers, including the likes of the Mayo clinic.

8. High Deductible Plan F Medicare Supplement: There are no issues with this plan with the exception of the out of pocket risk of $2,140.00 per year. If you remain healthy and have no out of pocket costs, you could save over $1,000.00 per year with the lower monthly premium. On the other hand, you could easily end up spending much more with out of pocket risk of $2,140.00. Please also note that unlike Plan K (option 7 above) your cost sharing for everything is 100% until you reach the out of pocket limit. You would still have access to most providers, including the likes of the Mayo Clinic.

Plan Comparison Summary

Medicare Coverage and Enhancement Options Plan Comparison Summary

For a more detailed analysis of your Medicare Out Of Pocket Expenses please see the following:

Detail of Out of Pocket Expenses

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