Medicare premiums continue to increase since President Obama signed the Medicare Access and CHIP Re-Authorization Act in 2015. For those over age 65, this means planning ahead could save you thousands of dollars in out-of-pocket medical payments.
High-income earners are likely to face even higher increases in Medicare costs for 2019. The predicted increase will catch many participants off guard. Medicare officials estimate as much as a 22% increase in 2019 Medicare Part B cost for wealthier beneficiaries.
The rates you will pay for Medicare coverage are predetermined before open enrollment each year. But this is only part of your potential total costs as Medicare has its limitations. Where Medicare stops, plans called Medigap or Medicare Supplemental Insurance Plans begins.
Important Note: 2019 Medigap Plans or 2019 Medicare Supplemental Insurance Plans can be purchased at any time, not just during the Medicare Open Enrollment Period.
Together, participants can create a plan where potential out-of-pocket expenses are known and capped. Our goal is to help you through the process of choosing the 2019 Medigap Insurance Plan which is best for you. The first step is learning the basics of Medicare.
Disclosure: “We are not connected with or endorsed by the U.S. Government or the federal Medicare program. Medicare has neither reviewed nor endorsed the information contained on this website.
Medicare is a national health insurance program which began in 1966 by the Social Security Administration. Now part of the Centers for Medicaid and Medicare Services, the program is supported by a combination of payroll taxes, premiums, and surtaxes paid in by participants, formally known as beneficiaries.
Important Note: Although they sound similar, Medicare and Medicaid are two different programs, with the most significant difference being Medicaid is operated by the individual states.
Health insurance is provided to over 46 million people age 65 and older. The program also provides coverage for 9 million younger Americans. On average, Medicare pays approximately half or the health care costs for participants.
The coverage afforded under Medicare is provided under four sections named “parts.” In general, each part offers the following coverage:
When choosing Medicare Part C, your coverage will be provided through a private insurer, instead of directly through original Medicare.
Important Note: Medicare will only cover 80% of any specific medical cost, the remaining 20% is the responsibility of the beneficiary.
Where Medicare stops at 80%, individuals become responsible. Participants can pay the difference out of their own pocket or purchase a Medicare Supplemental Insurance Plan.
The amount you pay for Medicare Part A will likely be $0. This is because only 1% of the population didn’t pay enough in taxes to effectively pre-pay their coverage. For the remainder of us who have paid Medicare taxes in at least forty quarters of your working life, Medicare Part A is provided to you at no cost after enrolling. Even if you did not pay enough into the system, you may still purchase Part A coverage with a maximum monthly premium of $413.
Important Note: The premiums paid for Medicare do not include deductibles or coinsurance, which you, as the beneficiary, will be responsible for.
This leaves Medicare Part B which covers outpatient services. The amount you will pay for Medicare Part B will be automatically deducted from your social security check, railroad retirement benefits, or office of personnel management benefits.
The monthly premiums you pay will be dependent on your tax return filed in 2017. If you are in one of the following income categories, this is what you will pay in 2019:
For those who file a joint tax return, double the income ranges to determine which category and premium you will be responsible per month.
Fortunately, the qualification requirements for Medicare coverage are fairly straightforward. In general, anyone age 65 or older qualifies for Medicare so long as they have been a United States resident for at least five years.
Medicare also extends to individuals of any age who have kidney failure or long-term kidney disease. Those who are permanently disabled and cannot work also qualify for Medicare, regardless of their age.
In some instances, an individual may qualify for both Medicare and Medicaid. These individuals are called “dual-eligible.” Sometimes Medicaid can be used to assist in paying for Medicare premiums.
While the two terms sound similar, Medicaid is a government-subsidized health insurance program administered by individual states for low-income individuals.
Medicare coverage begins each year on January 1st. However, to participate, you must enroll in Medicare during the open enrollment period for 2019 which is October 15th to December 7th 2018.
The first time you enroll in Medicare is called your Initial Enrollment Period. The Initial Enrollment Period begins usually:
Missing enrollment when you are first eligible may result in a late enrollment penalty. Additionally, you may end up with a gap in coverage if you decide on purchasing Medicare Part B coverage later.
Enrollment in Medicare happens through the Social Security office. You can enroll in one of three ways:
If you wish to have a family or friend contact Medicare on your behalf, you can obtain an authorization form from www.medicare.gov when you enroll. Those who worked at a railroad will enroll by reaching out the Railroad Retirement Board at 1-877-772-5772.
For most individuals, enrolling in Medicare Part A is automatic. However, you will need to enroll in Medicare Part B during your Initial Enrollment Period.
Medicare recommends you make an initial preventative medical visit. This visit, which is free of charge, will help establish your medical baseline. The free visit is only offered during the first 12 months after enrolling.
Second, sign up for MyMedicare.gov where you can access personal Medicare information 24 hours a day. Your login provides access to your health care claims, Medicare summary notes, deductible status, and other important information. The website also serves as a convenient location to store all your Medicare information. Here you can also find what Medicare covers and enroll in Medicare’s paperless program.
After reviewing what Medicare covers, you will learn there are limits to how much will be paid if you have a claim. This is where Medigap, or Medical Supplemental Insurance, coverage plays a role.
Medigap coverage is an additional health insurance product purchased through private insurance companies. Medigap plans pay for health care costs which are not covered by basic Medicare including:
Medigap plans are operated by private insurance companies. Each plan is standardized and must follow specific state and Federal laws. Because each plan is identical between insurance companies, it is easy to compare prices between each insurer.
There is a monthly premium for Medigap insurance policies. When you use health services not covered by Medicare, a Medigap insurance policy may save you money even after the insurance premiums are accounted for.
Important Note: Neither Medicare or Medigap will pay for nursing home stays, dental or vision care, hearing aids, eyeglasses or contacts.
Since there is a premium associated with Medigap plans, you will need to determine if the premium costs are enough to overcome the potential out-of-pocket expenses you will incur without a Medigap plan.
With a Medigap insurance policy, you may visit any physician or other healthcare providers. The only caveat is your medical provider be located in the United States and accept Medicare.
When you have health coverage in addition to Medicare, certain rules will apply to determine which plan pays what expenses. Medicare, and any other health insurance plan you have, are called “payers.” The rules which determine which plan will pay is called “coordination of benefits.”
In general, Medicare is the primary payer. This means medical costs, which may fall under Medicare and another health insurance plan will be paid by Medicare first. When Medicare reaches a maximum limit, then your Medigap or other secondary plan begins to contribute. In some instances, there may even be a third payer who would assist in covering any remaining costs left over after Medicare and a private plan.
Medigap policies are designed to bridge the gap between the benefits covered under Medicare and your pocketbook. Your personal medical needs will help determine which Medigap plan is right for you. Before choosing a plan, understand the Medicare benefits available and which ones you may need while enrolled in Medicare.
Medicare Part A Coinsurance – Under Medicare Part A, inpatient hospital stays are covered for up to 60 days with the exception of a deductible. After 60 days and after meeting the deductible, patients are required to begin paying about $340 in coinsurance per day. After the 90th day, the coinsurance jumps to about $675 after that.
Medicare Part A Deductible – Patients admitted to a hospital for three days or more will be required to pay a deductible close to $1,400.
Medicare Part B Coinsurance – For most outpatient visits, Medicare will pay 80% of the cost leaving the remaining 20% to be picked up by the patient or Medigap policy.
Medicare Part B Deductible – Before receiving any outpatient services, patients must meet the yearly deductible of about $190.
Medicare Part B Excess Charges – Health care providers are allowed to charge a higher amount than what they will receive from Medicare. The difference between your final bill and what Medicare will pay is called excess charges. Excess charges are the responsibility of the patient and may be picked up under some Medigap plans.
Blood – All Medigap plans will pay for the first three pints of blood. Medicare will pay for any amount required after three pints.
Part A Hospice Care – All Medigap plans will pay for some or all of the copayment and coinsurance required by Medicare. After the copayment or coinsurance has been met, Medicare will pay for the remainder.
Skilled Nursing Facility Coinsurance – Patients in a rehabilitation facility will receive skilled nursing care. Medicare will pay for the first 20 days of care given and only partially between the 20th and 100th of about $165. After 100 days, Medicare no longer pays for skilled nursing services.
Foreign Travel – If you have a medically necessary service or treatment provided outside the United States, Medicare will not provide any coverage. However, some coverage is available through select Medigap plans.
Although no one will know for certain what their future medical needs will be, understanding your current health requirements and the benefits available, is an essential step in choosing the appropriate Medigap plan.
The standardized Medigap plans are named A through N. Each offers different levels of coverage. Premiums for each Medigap plan will vary between the companies who provide them. However, the benefits of each plan regardless of the insurance carrier must be the same. This is why it is important to shop for the most competitive Medigap premium.
Important Note: Medigap plans E, H, I and J are no longer available.
Every year Medicare releases a publication comparing all available Medigap plans. If a private insurance company is offering a Medigap plan, they must provide the coverage specified by Medicare. However, except for Plan A, not all plans must be offered by private insurers. In general, each plan provides the following benefits:
The above standardized Medicare supplemental plans are available in most states. If you live in Massachusetts, Minnesota, or Wisconsin, note that there are differences in the standardized requirements of plans offered to residents of each state.
While each plan is standardized and available in most states, there are some key points to understand before purchasing a Medicare supplemental, or a Medigap plan. These are a few other key facts to know about Medigap policies:
Take your time learning all the facts about Medigap coverage. In the beginning, it may be difficult to keep everything straight. But, once enrolled and as your usage of Medigap plans begins, you will find the coverage afforded remains relatively consistent year after year unless you make a change.
Medicare Part D offers beneficiaries prescription drug coverage. Various plans, such as AARP Part D Coverage, are available both regionally and nationally. Premiums for Medicare Part D average about $137 per month. Overall Medicare Part D will pay for all your prescription drugs costs except for certain specified medications if you are in the coverage gap (donut hole), or in catastrophic coverage.
It is our mission to make the process of selecting the right 2019 Medicare Insurance Plan easy and hassle-free. Licensed insurance agents representing only the top and most reputable insurance companies are ready to assist you in finding the right Medicare supplemental plan. Our services are free and available with no obligation to purchase. Whether you are just beginning your enrollment journey or shopping Medigap plans at any time of the year, the next step is to contact one of our expert agents today!