Hello again Medicare scholars! Today, we’re going to explore the significant differences between Original Medicare (specifically Medicare Parts A and B) and Medicare Advantage Plans. We’ll take a close look into the financial implications of each, hoping to provide some helpful insight on which plan could save you more money.
Understanding Original Medicare A and B
First, let’s clarify a couple of things. Medicare Part A takes care of inpatient hospital services, skilled nursing facilities, hospice and certain home health care services. On the other hand, Medicare Part B helps cover medically necessary doctor’s services, outpatient care, medical supplies, and preventive services.
Costs and Deductibles for Part A
- A $1,736 deductible that serves as your entire out-of-pocket expense for up to a 60-day hospital stay
- There is a possibility of paying your deductible multiple times a year depending on when your hospital stays occur
- A daily copay of $434 for days 61 to 90 in a hospital
- A daily copay of $868 for days 91 to 150 in a hospital
Therefore, the maximum amount you may have to pay out of pocket with Medicare Part A depends on the length of your hospital stay and the number of times you are hospitalized in a year.
Costs and Deductibles for Part B
- An annual calendar year deductible of $283
- Once the deductible is met, 80% of the bills on the B side are covered by Medicare, and you pay the remaining 20%
- There is no cap on the amount you could be billed in a calendar year for the 20% coinsurance payment on all Part B services.
- Additionally, about 1 in 10 doctors may charge an extra 15% above the Medicare-approved amount for services
In total, you are liable to encounter up to six gaps in Original Medicare A and B.
“In Original Medicare, you’re looking at potential out-of-pocket expenses including a recurring deductible, daily copays, and unlimited coinsurance which, unfortunately, never stops.”
Understanding Requirements and Costs of Advantage Plans
Medicare Advantage Plans, also known as Part C plans, are an alternative to Original Medicare, provided by private insurance companies approved by Medicare.
To be eligible for an Advantage plan, you have to:
- Be enrolled in Medicare Parts A and B
- Pay the Medicare Part B premium, currently at $202.90 monthly
- Live in the plan’s service area
Some costs associated with these plans include:
- The Part B premium, which still necessary to keep your Medicare active
-
Copayments for services until you hit the plan’s annual max out-of-pocket limit.
Wrapping Up
Ultimately, the decision should align with your health care needs, budget, and personal preferences. Assessing your medical history, preferred providers, and financial considerations will help guide you toward the Medicare option that strikes the right balance between cost-saving and healthcare freedom. Remember, the goal is to find the plan that suits your unique situation and provides you with peace of mind for your health and financial well-being.
We would encourage you to speak with a licensed agent who can help you assess these options.