Health insurance is an extremely important part of everyone’s life – or at least it should be. Many countries worldwide have free health insurance and it’s hard for them to even imagine not having one or choosing not to.
Unfortunately, in the States, we’re seeing more and more people choose not to pay for their health insurance due to high costs, with the excuse that they “don’t visit their doctor that often.” What that comes down to is saving money for the potential emergency situation which leaves you depleted, since the costs of medical procedures and medications are through the roof.
When you turn a certain age, whether you want it or not, you begin to see your healthcare provider more frequently, and having health insurance helps you save money long-term. Medicare is a federal health insurance program for those over 65 years of age as well as younger individuals receiving Social Security disability benefits. Different plans offer different health coverage and cover different medical costs, but none cover all expenses and long-term care.
Medicare Plans for Seniors
Medicare offers a variety of different health insurance plans so you can choose the one that best aligns with your needs and budget. Here are the advantages and disadvantages of each:
Original Medicare (Part A + Part B)
The original, basic medicare plan consists of Medicare part A (hospital insurance) and Medicare part B (medical insurance) and it covers the basic, most essential medical expenses. It’s the most budget-friendly option and it allows you to visit any health provider that accepts Medicare. It’s accepted nationwide so you can travel risk-free, and without having to pay a monthly premium for Part A, the only requirement is a monthly premium for part B, which starts at $170.10 in 2022.
Unfortunately, Part A and Part B do not include vision, dental, hearing, prescription drugs, or other services. The basic plan also does not have a yearly out-of-pocket maximum, which means you could end up paying a hefty sum over the course of the year.
Medicare Advantage (Part C, and often D)
Also called Part C, Medicare Advantage plans are generally offered by Medicare-approved private companies and they generally include Part D or prescription drug coverage. They have an out-of-pocket yearly maximum, but in most cases, you’ll have to choose a health provider within the Medicare network which is limiting for many people.
There are five different types of Medicare Advantage plans, but all of them offer coverage just within the state you’re enrolled in, increasing the risk for traveling and out-of-state medical expenses. These five plans are the following:
- Health Maintenance Organization (HMO) Plans
- Preferred Provider Organization (PPO) Plans
- Private Fee-for-Service (PFFS) Plans
- Special Needs Plans (SNPs)
- Medicare Medical Savings Account (MSA) Plans
Each and every one of the Medical Advantage plans has its own advantages and disadvantages, but they all cover many things that the Original Medicare does not. These include things like gym memberships as well as limited vision, dental, and other services. They also generally include prescription drug coverage or Medicare Part D, and some may even offer services like transportation to doctor visits or other health and wellness-related costs and programs.
The biggest disadvantage of Medical Advantage plans are additional costs that depending on the plan and a variety of different factors, include in-network, out-of-network, copays, deductibles, prescription drugs, and coinsurance.
Medicare Part D
Original Medicare has very limited prescription drug coverage and Medicare Part D expands it to basically all prescription drugs. Still, there are some restrictions and limitations, so make sure to be very thorough when choosing your plan that best fits your medical needs and covers those prescription drugs your health plan requires.
Other Health Plans
- Medicare Cost Plans -These plans are a type of health care that’s offered in limited parts of the US. You can join them even if you only have Part B coverage, you can get only Part D coverage, or you can basically mix and match with Original Medicare or another Medicare drug plan and get the best from both. There is a variety of different Medicare Cost Plans you can choose from and see which one best fits your goals and needs.
- Demonstrations/pilot programs or research studies – special projects that analyze different types of Medicare coverage, payments, and quality of care, specifically focusing on their improvement and progression
- Program of All-Inclusive Care for the Elderly (PACE) – a specialty Medicare/Medicaid program that helps people get health care help from health care professionals who work with their families or in their community instead of a nursing home
This is a Medicare supplement health insurance policy offered by private insurance companies to help cover everything that’s missing in the Original Medicare Plan. It can be added to your Original Medicare plan so both of them pay their share of covered health care costs. Medigap policy is also valid for out-of-country incurred medical expenses, so it’s a great option for those who like to travel outside of the US. Unfortunately, Medigap does not cover the costs of dental, hearing, vision, or prescription drugs.
How to Choose the Best Medicare Plan for You?
When choosing the best health insurance plan for you, there are some important factors to consider:
- Depending on your health status, what kind of coverage do you need?
- What’s your monthly allocated budget for health insurance?
- Are you already taking prescription drugs for a specific chronic condition?
- Are you currently covered through your spouse, an employer, or have any veteran benefits?
- Do you have a severe vision, hearing, or dental problem that needs continuous attention and treatment?
- Do you often travel out of state or out of the US?
After replying to all of these questions, check the Medicare.gov website and their plan tool- it’s going to help you find the best option to fit your needs, budget, and health goals.
How and When to Enroll in Medicare?
If you apply for retirement or Social Security disability benefits, you’re immediately applying for Medicare too. Also, if you’re already receiving social security benefits at least four months before you turn 65, you’ll immediately receive Part A coverage as well as Part B if you choose to pay the premium.
If you don’t fall under any of these two options, you simply apply for Part A and Part B coverage when you turn 65. Medicare offers zero penalties for anyone who applies within the three months before or after their 65th birthday.
In case you miss the seven-month enrollment period, you can sign up for Medicare during their four major enrollment periods:
- Open enrollment period (October 15 to December 7) – which gives you the chance to switch from one plan to another and join or drop your Medicare plan
- Special enrollment period – based on a special set of circumstances like an employer-based group health plan or you have a health savings account (HSA) with a high-deductible health plan
- General enrollment period (January 1 to March 31) – this period is for people who missed their initial enrollment period, but there are some penalties
- Adding Part D coverage (April 1 to June 30) – if you’re interested in adding Part D to your Medicare plan
Enrolling in Medicare for seniors is the best way to reduce the risk of any high medical expenses they might encounter. Even though the Original, basic Medicare plan does not offer very broad coverage, there’s always an option of enrolling in one of the Medicare Advantage programs and finding a plan that works best for you, your health situation, and overall health needs.