Understanding Medicare 2018
Part A Hospitalization
- No Cost for most Americans
- Worked 7-10 years pay $232 per month
- Worked less than 7 years pay $422 per month
Part B Outpatient
- $110.00 for most Americans
- $134.00 Month for anyone new to Medicare in 2018; anyone on Medicare but not social security and anyone who pays an income related surcharge on Parts B & D
Part D Prescriptions
- Price varies, based on plan chosen
Part C 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 $1,340.00 for 2018. Hospital stays day 1-90 $335.00 per day. Lifetime reserve $670.00 per day. The Part B Deductible for 2018 is $183.00
Original Medicare requires Parts A & B and a separate drug plan.
Part C is run by private insurance companies and is referred to as an MAPD (Medicare Advantage Prescription Drug plan)
2 Types of Plans in Nevada
- Must have a primary care physician.
- Referrals are required to see a specialist.
- If you go out of network, you pay the entire bill.
No referrals required, see any physician as long as they accept the plan. In Nevada monthly premiums range from $46-$140 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. Some plans 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. These plans typically have no premium.
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 letter so the plans range from plan A through plan N.
Medicare controls the plan benefits so all like plan benefits are the same regardless of insurance carrier. The monthly premiums will vary depending upon carrier.
Plan F appears to be the most popular plan (Plan 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 Plan F or C after January of 2020.
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 $75 but has a deductible in 2018 of $2240. You pay the $2240 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 2018 is $183.00 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. It is anticipated that once Plans C & 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 $183; then Doctor Visits are $20. (Remember that the Doctor has 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 issue while others are not.
Since Medicare Supplements do not cover prescription medications, you will need a separate drug plan.
When you age into Medicare or take Medicare Part B after retiring; you are in an open enrollment or guarantee 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.
Understanding Medicare Part D
Stand-alone prescription plans are provided so recipients can get price breaks on their medications. All plans follow the Medicare guidelines including the doughnut hole or gap phases.
The Doughnut Hole or Gap For 2018
Phase 1: Maximum is $3750. Some plans have an annual deductible of $405.
The $3750 is the total cost of the medication; that you and your insurance company pays. After you spend the $3750, you then move to Phase 2 or the doughnut hole or gap.
Phase 2: Maximum is $5000.
The way you get to the $5000 is a bit complicated. When you buy generic medications you pay 44% 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 doughnut hole or gap you pay $8.80 or 44% of the $20.
Brands are treated differently, during the doughnut hole or gap you pay 35% and the insurance company and drug company pay 65%, but you count the 85% towards the $5000. The 15% the plan pays does not count towards the maximum out of pocket. If the drug costs $300 per month, you pay $105. The insurance company and Drug Company pay the difference and you count 85% of the $300 towards the maximum out of pocket, or $255.
Your costs are $3.35 for generic medication or 5% whichever is greater. For brands you pay $8.35 or 5%, whichever is greater. When January 1st comes around it starts all over again.
Doughnut Hole or Gap Example:
Your generic drug costs you $4.00 per month. The insurance company pays $16.00. During the doughnut hole or gap you pay 44% of the cost or $8.80.
For brand named drugs you pay 35% of the cost. The drug costs $300, you pay $105.00 and the insurance company and Drug Company pays the rest. You count the 85% of the $300 (or $255) towards the $5000.
As an Insurance Broker I do not work for the insurance companies; I work for you.
Ask me about how I can help you.