Important Medicare Parts
Medicare typically has 4 parts that every senior should understand so when they are making a choice, they do it with their eyes open.
Part A is hospital coverage and has a deductible which changes each year. For 2024 that deductible is $1632.00. This means, if you have Original Medicare (Parts A & B without any other coverage) you are responsible for that deductible when being admitted into the hospital. You can go in and out as many times as necessary during the first 60 days without paying another deductible. However, if you are discharged on day 60 and a couple of days later you are readmitted, that deductible starts over again.
Part B is everything outpatient, doctor, lab, X-ray, and any other service done outside of the hospital. There is also a Part B annual deductible of $240. Once paid then you pay 20% of all remaining bills.
Remember, Medicare is the only insurance that does not have a maximum out-of-pocket, meaning you are responsible for 20% of all bills during each year. Many seniors are not aware that Original Medicare has no maximum out of pocket and end up with very large medical bills. Medical bankruptcy is the largest form of bankruptcy in the US accounting for about 61.2% of all bankruptcies.
The other issue with Original Medicare is called the assignment of benefits. This term simply means if a doctor, hospital, or any other medical facility takes assignment of benefits, you pay the 20% that Medicare doesn’t pay, and that facility must write off the remaining balance. If they do not take the assignment of benefits, then they can bill you part that Medicare disallowed. That means your cost for services could go as high as 35% of that bill. In other words, the 20% Medicare doesn’t pay and the 15% that Medicare disallowed can be your responsibility if that facility does not accept the assignment of benefits. Almost all hospitals many doctors and other medical facilities accept the assignment of benefits. I am mentioning it because there are facilities that do not take the assignment of benefits and if you only have Original Medicare and a drug plan, those additional costs can be charged to you. So, ask the question about the assignment of benefits before you use that facility and save yourself the aggravation later.
The best part of Original Medicare is that you can see any doctor or be admitted into any hospital anywhere in the country if they are Medicare providers. If the provider or hospital does not take Medicare, then the entire bill is on you except in an urgent or emergency.
Part D is drug coverage and can be purchased either as a standalone product or included in a MAPD (Medicare Advantage plan)
The options to add another insurance plan to Original Medicare are multiple. They include a Medicare Supplement and standalone drug plan and or a Medicare Advantage plan which includes drugs.
It is not for me to say which is better as each Medicare recipient has their medical issues and that and the cost usually determines which option is better for them.
Medicare Supplements are private insurance plans that have a monthly premium that you pay and depending upon the plan and insurance carrier used that price can differ even for the same plan. These plans are designed to pick up what Medicare doesn’t and there are many different plans available. The most popular ones are Plan F (no longer available after 1/1/20) and Plan G. Plan G has a small annual deductible for outpatient services of $240.00. All other charges are paid for between Medicare and plan G. Please note that the monthly premiums increase with age so not everyone can afford them.
Medicare Advantage Plans are funded by the government so private insurance can take over instead of Original Medicare. These plans differ by location and can be an HMO, PPO, or Medical Savings Account. They replace Original Medicare, and all services are through your plan. Typically, these plans have no monthly premium but have fixed copays for services. Many of these plans have very little cost for the Medicare recipient and are very popular. The maximum out of pocket ranges from $1000 to $4400. In Clark County, these plans have over 150,000 participants. The government does an actuarial calculation in each county in the country and determines what they spend on an Original Medicare recipient and usually reduces the amount they pay the insurance company by about $200. So, in Clark County, it is estimated that the cost per Original Medicare recipient is around $1100 per month so they give the insurance company $900 per month saving $200 per person times the number of recipients. Multiply that savings by 6000 counties in the US and you can see the savings the government enjoys. The insurance companies are allowed to make 15% of the money they receive so all parties come out ahead. It’s a win for all parties concerned.
Now that all the parts are explained perhaps it’s time to discuss how do you decide which plan is best for you. While that is the job of an insurance broker the Medicare recipient should also understand what their choices are and participate in choosing the best plan for them. The simplest way to determine which is the best option for you is to discuss your medical conditions and how much money you can afford to pay for insurance now that you are retired. Also, consider your family’s medical history and that gives you some idea of what to expect in the future.
As you can see there are many different choices for Medicare and speaking to a knowledgeable Medicare broker is paramount to you getting the best overall plan for yourself. Since the brokers are compensated by the Medicare plan and all commissions are standard the broker should be impartial so they can assist you in finding the best plan for you now. All MAPD and drug plans can be changed annually during the Annual Election Period from October 15th through December 7th. You also have between January 1st and March 31st to change your MAPD plan. The standalone drug plans can only be changed during the October through December timeframe.
The Medicare Supplements are a different issue being private insurance and out under government control so the timeframes for change are different. Thanks to yours truly, I was able to get the then Governor Sisolak to sign a Nevada Medicare Supplement birthday rule which allows you to change your Medicare Supplement to another insurance carrier for a plan equal or less than what you have currently. I used this rule last month and changed my plan F from one company to another and saved $100 per month. That’s a nice savings and my plan F is still my plan F but with a different company. You can do this annually and I recommend you consider exploring your options around your birthday so if you fins a similar plan for less month you can make that move. We are one of only 6 states that have that rule and I believe every state should avail themselves of the rule which gives the Medicare recipient options and choices to make changes as they arise. When you are a senior and living on a fixed income as many are, being able to save money on a major item like your Medicare supplement is helpful and the right thing to do. Most seniors are unaware of this option and part of this blog is to help them understand they have options and should use them.
This blog was meant to inform seniors about the various types of plans available in Nevada but was not meant to steer you in any one direction. I am a firm believer that you need to be in control of your medical and choosing the right plan is paramount to your overall health so speak with a knowledgeable Medicare broker who is familiar with all the plans in Nevada and can guide you to make the best decision for your medical needs.
The bottom line is sometimes we lose sight of what the real issues are, getting insurance you can use.
I hope this information is useful and if anyone has questions, please contact me via phone or email and I will respond quickly.
Also, if you need Medicare information, take a look at Medicare 2024 Information.
The Barend Agency Inc.
Len Barend, Broker
Cell:702-250-2200
Email: len@insurance4unevada.com