Is Original Medicare the Best Health Insurance Plan for You?
Just before you reach age 65, you’ll be getting information from the government that provides information about a variety of Medicare Health Insurance plans.
Within a relatively short period of time, you’ll have to make some important decisions with regards to coverage, so it is important that you understand some of the basics.
If you try to navigate your way through all of the papers and books you’ll receive, the information will look like gobblydegook to you because of the terminology that is used and the guidelines that are provided.
For this reason, I’m going to provide you with a simple overview that will help you to understand what you are reading.
First, don’t confuse Original Medicare with Medicare Advantage. They are two entirely different health insurance plans.
- Original Medicare is administered by the U.S. Government.
- Medicare Advantage is overseen by but not run by the government.
If you want to learn about MA plans, read What You Need to Know about Medicare Advantage Plans.
Original Medicare is meant to help you pay some, but not all, of the costs you incur for hospital and medical care.
You pay a monthly amount called a premium, plus deductibles and copayments.
- A deductible is money you pay before the plan will pay anything.
- A copayment is money you pay to cover your part of the actual expenses you incur.
For example, if you see a doctor, you’ll have to pay his entire fee until you meet your deductible. After that, you’ll only have to pay a portion for each office visit.
Parts A and B
Original Medicare is composed of two parts: Plan A and Plan B.
Part A pays a portion of your hospital expenses, and Part B covers things like doctor visits, lab tests and in office injections.
Plan A is hospital coverage, is free to have and will be given to you automatically when your reach the age of 65.
Even though there is no premium for this coverage, you’ll still have to pay a deductible plus 20% of your hospital bills.
Part A deductibles are paid as needed and on a quarterly basis. For 2018 they are $1340 per benefit period (every 3 months).
What this means is that if you enter the hospital at the end of a quarter and are still there for the next one (which can be as little as one day), you’ll pay two premiums.
In addition, you’ll be financially responsible for paying 20% of all hospital expenses.
So, if you have an operation that costs $150,000 and are only in the hospital for one benefit period, you’ll pay $1340 plus another $30,000 for the care you have received.
Part B is for medical coverage and is optional, but buying it will save you quite a bit of money.
The premium for 2018 can cost you upwards of $134 per month depending on your financial situation and geographic location. In addition, you’ll have to pay a $183 deductible plus 20% of all Part B charges which include but are not limited to
- visits with your doctor,
- physical and occupational therapy costs,
- laboratory tests and
- durable medical equipment.
To give you an idea about savings, note that in 2017 I visited my family doctor 11 times, had lab work done 6 times, saw specialists 24 times.
Had I paid out of pocket, these things easily would have cost me $8,000. Instead I only paid $2580 including premiums, deductibles and copayments. Thus, buying Part B saved me $5420!
Those with good health, of course, will incur fewer charges, but it’s still a good deal because you never know when you’re going to need health insurance and doing without can be very financially risky.
I know a woman who opted to avoid Part B. She got hit by a car and ran up bills into the millions of dollars.
Her Part A coverage helped significantly, but she’ll be paying medical bills for the rest of her life. This certainly is a lesson worth remembering!
Original Medicare Does Not Cover Everything
It is commonly believed that Medicare covers everything, but this is not true.
For example, if someone feels they need an ambulance to take them from their home to the nearest hospital, they might be shocked when the bill for hundreds of dollars shows up in their mailbox!
Medicare has very strict rules about patient use of ambulances. For the most part, they will only pay if they feel the person being transported is in a life and death situation.
- I know of one instance where a woman with back problems developed excruciatingly painful spasms. She lived alone in a two story condo, and was on the second floor when the pain hit.
- She could not possibly have driven herself to a hospital, let alone make it down the steps and into a car to have someone else take her.
- She was shocked to receive a bill for$750!
Original Medicare also does not cover standard vision, hearing or dental services.
It also does not cover prescription medications.
Those who want their prescriptions covered must sign up for Part D. To learn more about this option, you can read How to Choose the Best Medicare Part D Plan.
This is a stand alone plan that is separate from Original Medicare but is very important to have, especially since the prices for medications have been rising so fast.
Both Medicare and Medicare Advantage Plans have their limitations, but those who are willing to pay more to give themselves better financial protection quickly learn that adding a supplemental policy to Original Medicare is the way to work around many of the caveats mentioned here.
With addition of a good Medigap policy, which can cost an extra $250 or so per month, individuals who choose Original Medicare will have no co-payments, no deductibles and no Part A or B expenses.
This is because supplements pay all of the costs that Medicare does not pay, as long as services have been previously approved by Medicare.
There is no limit to the number of physicians they can see or hospital stays they can have and, if they follow the guidelines carefully, they can also avoid having to pay most of the costs for services from laboratories, physical therapy groups and others.
With or without a supplement, patients can see any doctor who takes Medicare without having to get a referral, and their policy is good anywhere in the US.
Now that you know the basics, it will be up to you to decide whether Original Medicare by itself or with a supplement will be your best choice for health insurance coverage.
Did this article give you a better understanding of Original Medicare?
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© 2018 Sondra Rochelle