Understanding Medicare 2019
Part A Hospitalization
No Cost for most Americans
Worked 30-39 quarters you pay $232 per month
Worked less than 30 quarters you pay $437 per month
Part B Outpatient
$135.50 Month for anyone new to Medicare in 2019; anyone on Medicare but not on social security plus a related surcharge on Parts B & D
Part D Prescriptions
Price varies, based on plan chosen
Part C Offered from Private Insurance & Includes Parts A, B & D
Original Medicare is a fee for service program where the recipient pays 20% and Medicare pays 80%. There is no maximum out of pocket under Original Medicare. If you have a claim for $100,000, you owe $20,000. You can see any Doctor, in any hospital, as long as they take Medicare. With Original Medicare, you also have to contend with Medicare Assignment of Benefits. It means the Doctor or facility bills Medicare directly. If they don’t they can bill you the excess charges that Medicare disallows. (Usually around 15%) Part A Deductible is $1,364 for 2019. Hospital stays day 61-90 $341 per day. Lifetime reserve $682 per day. The Part B deductible for 2018 is $185.
Original Medicare requires Parts A & B and a separate drug plan.
If you are working beyond age 65 and your employer has more than 20 employees, you can keep your group health plan and take Medicare Part A only. This is because your group health plan will pay first and Medicare will pay second. If your employer has less than 20 employees, you must take Medicare Part A & B because then Medicare pays first.
Part C is run by private insurance companies and is referred to as a MAPD (Medicare Advantage Prescription Drug plan)
2 Types of Plans in Nevada
HMO Must have a primary care physician. Referrals are required to see a specialist. If you go out of network, you pay the entire bill. These plans typically have no premium.
PPO No referrals required, see any physician as long as they take the plan. In Nevada monthly premiums range from $0-130 per month depending upon the carrier.
If you go out of network, the cost sharing is greater than staying in network. Some plans have a deductible and additional maximum out of pocket for seeing non-network providers. These plans also have nationwide networks.
Medicare Advantage plans are run by insurance companies and the plans are based on the county where you live. If you move out of the home county, you must change your plan.
There are a combined 18 different MAPD plans offered in Nevada. They include HMO’s, PPO’s and SNP (Special Needs Plans). This SNP are offered for medical conditions such as Diabetes, Heart Conditions, COPD or other breathing problems and for End-Stage Renal Disease or Kidney Dialysis.
Understanding Medicare Supplements
Medicare Supplements are plans that work with Original Medicare and pay part or all of what Original Medicare doesn’t cover.
Medicare Supplement plans are designated by a letter; the plans range from plan A through plan N. The government decides what each plan’s benefits are and the insurance carriers decide what rate to charge. Therefore, rates can vary as much as $100 per month for the same plan.
Plan F appears to be the most popular plan (Plan F, High Deductible F & C are being grandfathered in 2020 and will no longer be available. Anyone on those plans may keep them.)
If you are Medicare eligible prior to 2020 you can buy a Plan F, High Deductible F or C after January 2020, otherwise, you cannot buy any of these plans.
With Plan F, when you visit a provider you need your Original Medicare card and your Medicare Supplement card. All Medicare-approved services are covered without any payments from you. Also, all excess charges are covered in Plan F.
There is also a high deductible Plan F. It is priced well under $50 but has a deductible in 2018 of $2300. You pay the first $2300 and the plan pays everything else for the calendar year.
Some carriers offer a G Plan. The G Plan has the Part B deductible which for 2019 is $185 annually. Once that deductible is satisfied, there are no other charges. The difference in premium between Plan F & G is around $30-45 per month, depending upon the carrier. It is anticipated that once Plans C & F & High Deductible F exit the market that Plan G will become the plan of choice.
Plan N has 3 charges. The 1st is the annual Part B deductible of $185; then Doctor Visits are $20. (Remember that the Doctor will have to take Medicare Assignment of benefits or the Doctor can bill you what Medicare doesn’t pay.) Lastly, emergency room services are $50 and waived if you are admitted. All other services are covered at 100%. The cost difference between Plan F and Plan N are about $50-$70 per month. Some Plan N’s in Nevada are guaranteed issued while others are not.
When you age into Medicare or take Medicare Part B after retiring; you are in an open enrollment or guaranteed issue period where there are no medical questions asked to obtain coverage.
Choosing the right plan for you is critical to your financial future. Make sure you have the right information before making a decision. Unlike Medicare Advantage, you are required to prove insurability if not in the guaranteed issue period.
Since Medicare Supplements do not cover prescription medications, you will need a separate drug plan.
Understanding Medicare Part D
Stand-alone prescription plans are provided so recipients can get price breaks on their medications. All plans follow the Medicare guideline including the donut hole or gap phases. There are 3 phases in all Medicare drug plans. There are 3 different types of drug plans; the saver plan; the preferred plan and the enhanced plan. The saver plans usually have deductibles while the preferred and enhanced plans don’t have deductibles.
The maximum is $3820. Some plans have an annual deductible of up to $415. The $3820 is the total cost of the medication; that you and your insurance company pays. After you spend the $3820, you then move to Phase 2 or the donut hole or gap.
The maximum is $5100. The way you get to the $5100 is a bit complicated. When you buy generic medications you pay 37% of the cost the insurance company pays for the medication. Example: During Phase 1 you pay $4 & your insurance pays $16 when you move to Phase 2 or the donut hole or gap you pay $7.40 or 37% of the $20.
Brands are treated differently, during the donut hole or gap you pay 25% and the insurance company and drug company pay 75% but you count only 95% towards the $5100. If the drug costs $300 per month, you pay $75 and the insurance company and Drug Company pay the difference and you count 95% of the $300 towards the maximum out of pocket, or $285.
Your costs are $3.50 for generic medication or 5% whichever is greater. For brands, you pay $8.50 or 5%, whichever is greater. When January 1st comes around it starts all over again.
Donut Hole or Gap Example:
Your generic drug costs you $4.00 per month. The insurance company pays $16.00. During the donut hole or gap, you pay 44% of the cost or $8.80. For brand name drugs you pay 35% of the cost. The drug costs $300 you pay $105 and the insurance company and Drug Company pays the rest. You count the 85% of the $300 (or $285) towards the $5000.