In our previous post on Medicare Parts A and B, we outlined some of the basic features of Traditional Medicare, which provides hospital and medical coverage to those enrolled. While Traditional Medicare will cover many of your basic medical needs, some people choose to explore other types of healthcare plans because of various costs and different types of coverage available.
In this piece, we’ll explore Medicare supplemental insurance plans as available through Medicare Advantage and Medicare Part D. Both are offered through private insurers, and most plans require premiums, co-payments and deductibles.
Medicare Part C (Medicare Advantage): Costs and Benefits
Medicare Part C is an alternative to Medicare Parts A and B, and it must by law provide coverage “equivalent” to Parts A and B.1 If you purchase a Medicare Part C plan it will replace your coverage through Medicare Parts A and B. With a Medicare Part C plan, you don't have to pay Medicare Part A and Part B deductibles and co-payments, because Medicare Part C plans have their own deductibles and co-pays. You would, however, still have to pay Part B premiums.2
Three Important Considerations when Purchasing Medicare Part C
Examine how the benefits of Medicare Part C are different than coverage offered through Traditional Medicare. For instance, does the Medicare Part C plan provide drug coverage, and are there different rules for how you get services (like whether you need a referral to see a specialist, or whether you can only visit doctors, facilities, or suppliers that belong to the plan for non-emergency or non-urgent care)?3
Figure out if the plan includes your regular doctors as part of the plan's network. If not, and you want to stay with your doctors, you may want to explore other plans.4
Carefully compare the costs associated with each plan you evaluate.
Medicare Part C can potentially fill additional medical needs by providing coverage not covered by Medicare Parts A and B such as vision and dental. However, Part C plans are not all equal as the coverage, costs, and co-payments can vary across plans and from state to state.2
Shopping around is critical in determining the benefits and the costs associated with Plan C, and whether the plan could make sense for you.
Medicare Part D: Costs and Benefits
Part D provides drug coverage, and is separate from Plan C. You pay a monthly premium, and some policies also require an annual deductible. After the deductible, you will be covered up to $2,510 in total annual costs. At this point, however, there is a gap in coverage. You will be responsible for all drug costs that fall between $2,510 and $4,050. After your annual costs go beyond $4,050, you are covered again.
To note, if your Medicare Advantage Plan (Part C) includes drug coverage and you purchase Part D, your Part C will automatically be cancelled and you’ll have Parts A, B and D.5
What Supplemental Insurance Plan Makes Sense for You?
Navigating the various options within Medicare is an integral process for anyone entering retirement, and there are a wide variety of choices to make. Knowing all of your options, the costs, and coverage is crucial. Will Medicare Parts A and B meet your healthcare needs? Should you purchase additional coverage through Medicare Advantage (Part C)? Or do you buy Part D and forego Part C altogether?
Remember, though, your healthcare is only one piece of your overall financial plan, and it is important to consider other factors like your cash flow needs, portfolio strategy, and estate planning. Our Wealth Managers can help you build a comprehensive plan that considers all of your needs and goals.
Call us today at 1-800-541-7774 to get started.