Medicare: Let’s Make This a Whole Lot Less Confusing

Medicare: Let’s Make This a Whole Lot Less Confusing

Medicare has Parts A, B, C and D.Then there’s Original Medicare, Medicare Advantage, Medigap, drug plans, enrollment periods, premiums, deductibles, networks and enough mail arriving at your house to wallpaper the spare bedroom.No wonder people get confused.The good news is that Medicare makes much more sense once you stop trying to understand everything at once.So we're going to do something radical.We're going to start with the basics.

First, What Exactly Is Medicare?

Medicare is federal health insurance primarily for people age 65 and older, although some younger people with certain disabilities or medical conditions also qualify. (Medicare)And here's the first thing to understand:Medicare isn't one single insurance plan.It has different parts that cover different things.Think of them as pieces of your health-care coverage.

Part A — Think Hospital

Part A is Hospital Insurance.It helps cover things such as inpatient hospital care, skilled nursing facility care, hospice care and certain home health services. (Medicare)An easy way to remember it:A = Admitted to the hospital.It's not technically what the A stands for, but we're trying to remember Medicare here, not pass a government vocabulary test.

Part B — Think Doctors and Outpatient Care

Part B is Medical Insurance.It helps cover doctor and other health-care-provider services, outpatient care, durable medical equipment and many preventive services, including certain screenings and vaccines. (Medicare)So if Part A makes you think hospital, let Part B make you think:Doctors, appointments and medical care outside the hospital.Parts A and B together are what we call Original Medicare. (Medicare)Already, the alphabet is getting a little less scary.

Part C — Medicare Advantage

Here's where people sometimes get tripped up.Part C is another name for Medicare Advantage.Medicare Advantage plans are offered by private insurance companies approved by Medicare. They provide your Part A and Part B benefits, and most plans also include Part D prescription-drug coverage. Many offer additional benefits such as dental, vision or hearing coverage. (Medicare)That can sound wonderful—and for some people it is.But you need to look beyond the extras.Medicare Advantage plans may have provider networks, require referrals or prior authorization for certain services, and have their own rules and costs. (Medicare)So don't choose a plan because the television commercial promises a bunch of goodies.Choose based on your doctors, your prescriptions, your health needs, your budget and how you actually use health care.

Part D — Prescription Drugs

Part D helps cover prescription drugs.If you have Original Medicare, you can purchase a separate Medicare drug plan. Most Medicare Advantage plans already include Part D coverage. (Medicare)And here's something worth knowing even if you don't take many prescriptions today:Don't automatically assume you should skip drug coverage because you're healthy.Depending on your circumstances, going without qualifying drug coverage and enrolling later can result in a late-enrollment penalty.The same idea applies to Part B: delaying enrollment without qualifying for a Special Enrollment Period can lead to a penalty that may continue as long as you have Part B. (Medicare)So this is one of those times when “I'll worry about it later” can get expensive.

So What's Medigap?

Now Medicare throws another word at us.Medigap, also called Medicare Supplement Insurance, is private insurance designed to help pay some of the out-of-pocket costs left by Original Medicare, such as certain copayments, coinsurance and deductibles. (Medicare)Here's the important distinction:Medigap works with Original Medicare.It does not work as supplemental insurance for a Medicare Advantage plan. (Medicare)Your one-time federal Medigap Open Enrollment Period generally lasts six months beginning when you're 65 or older and enrolled in Part B. During that period, insurers can't deny you a Medigap policy because of pre-existing health problems. After that period, your ability to buy a policy may be more limited or it may cost more, depending on your circumstances and state protections. (Medicare)That's a deadline worth paying attention to.

The Big Decision: Original Medicare or Medicare Advantage?

Eventually, many people face this choice.With Original Medicare, you have Parts A and B and can use any doctor or hospital in the United States that accepts Medicare. You can add a separate Part D prescription-drug plan and may choose supplemental coverage such as Medigap. (Medicare)With Medicare Advantage, a Medicare-approved private company provides your Medicare coverage. Plans generally bundle Parts A and B and usually Part D. They may offer additional benefits, but networks, referrals, prior authorization requirements and out-of-pocket costs can differ by plan. (Medicare)Neither choice is automatically “the best.”The better question is:Which one works best for you?

Don't Choose Based Only on the Monthly Premium

A low—or even $0—plan premium can certainly get your attention.But your premium is only one piece of what health care may cost you.Look at things like:whether your doctors and hospitals participatewhether your prescriptions are covered and what they costdeductibles, copays and coinsurancemaximum out-of-pocket costspharmacy networksreferrals and prior authorization requirementscoverage when you're away from homeA plan that's inexpensive every month isn't necessarily inexpensive when you actually need medical care.

Check Your Doctors and Prescriptions Every Year

This deserves its own section because it's easy to overlook.Your needs can change.Plans can change.Drug formularies can change.Provider networks can change.So even if you've had the same Medicare coverage for years, don't assume it's still your best choice.Before making a plan decision, check your current doctors, specialists, hospitals, prescriptions and preferred pharmacies.Those details matter far more than the free tote bag at the Medicare seminar.

Be Careful Who You Take Advice From

Medicare decisions can involve a lot of money, which means plenty of companies want your business.That doesn't mean every insurance agent is untrustworthy.It does mean you should understand who is giving you advice and whether they're trying to sell you something.One excellent option is your local State Health Insurance Assistance Program (SHIP). SHIP provides free, unbiased Medicare counseling and isn't an insurance company.Find your local SHIP counselorAnd when you want information straight from the federal program, use:Official Medicare websiteThose are two resources worth bookmarking.

You Don't Have to Become a Medicare Expert

That's probably the most important thing in this entire article.You do not need to memorize Medicare.You need to understand enough to ask good questions.Start with four:What does my plan cover?Are my doctors in it?Are my medications covered?What could I realistically pay out of pocket?Then ask for help when you need it.Medicare is complicated because there are many choices, rules and individual circumstances—not because you're somehow supposed to magically understand a federal health-insurance system the minute you turn 65.Take it one piece at a time.A — Hospital.
B — Medical.
C — Medicare Advantage.
D — Prescription drugs.See?We're already doing better than alphabet soup.The World U — Helping people over 60 live smarter, safer, and more confidently.