Each day, approximately 10,000 U.S. adults turn 65, which means they are eligible for health insurance coverage through the federally managed Medicare program. Additionally, some individuals younger than 65 may be eligible for Medicare – including those with a long-term disability or certain diseases. There are many Medicare coverage options individuals should understand before picking the right plan for them. Medicare Advantage programs offer unique benefits.
The ABC’s of Medicare
There are two main distinctions between Medicare plans: Original Medicare and Medicare Advantage. Original Medicare plans are run by the federal government and Medicare Advantage plans are run by private health insurance companies that contract with the government. The four main types of Medicare coverage include:
- Part A (Original Medicare): These plans act as hospital insurance by covering hospital care, skilled nursing facility care, hospice and home health care.
- Part B (Original Medicare): These plans provide medical insurance by covering doctor visits, mental health care, outpatient surgery, lab tests and medical equipment like wheelchairs and walkers.
- Part C (Medicare Advantage): These plans cover everything that Part A and Part B plans cover. Many plans also include Part D, or prescription drug coverage, in addition to extra benefits that Original Medicare doesn’t cover like dental care, routine vision and hearing visits and more.
- Part D (Prescription): These standalone plans only cover prescription drugs and can be paired with Original Medicare, Medicare Supplement or a Medicare plan that doesn't include prescription drug coverage. Medicare drug plans include a coverage gap, which means after a member reaches the annual coverage limit, they are responsible for 25% of the cost for prescription drugs until the total out-of-pocket limit is reached, then members enter the catastrophic coverage phase and will typically pay 5% coinsurance until the end of the plan year.
- Medicare supplement insurance plans are also available to bridge the gap between what Original Medicare plans cover, and the total cost of Medicare services.
Benefits of a Medicare Advantage Plan
Compared to Original Medicare, Medicare Advantage plans offer unique benefits to members who enroll. Here are some of them:
- Fixed costs: Medicare Advantage plans use copays for office visits and outpatient surgery, which means members know what the fixed costs will be for those services. Original Medicare plans require individuals to pay 20% of the cost (also known as 20% coinsurance) for office visits and outpatient surgery – variable costs that are harder to plan for.
- Cost caps: Medicare Advantage plans have an out-of-pocket maximum each year, and plans cover 100% of the cost after individuals reach a certain dollar amount. Original Medicare plans have no cap on what individuals pay out-of-pocket for care. Some Medicare Advantage plans feature $0 monthly premiums, $0 deductibles and no copays for primary care visits.
- Extra benefits: Most Medicare Advantage plans include Parts A, B and D benefits, and provide extra benefits not covered by Original Medicare like dental, routine vision and hearing services, fitness benefits, over-the-counter medication allowances and transportation coverage.
There are several opportunities for individuals to enroll, adjust or switch their Medicare coverage:
- Three months before their 65th birthday, during their birthday month, and three months after their 65th birthday: This is the initial enrollment period and allows individuals to sign up for Original Medicare, as well as Medicare Advantage, supplemental plans or Part D coverage if desired.
- Oct. 15, 2021, to Dec. 7, 2021: This annual election period allows individuals who are already enrolled in a Medicare plan to adjust their coverage to add Medicare Advantage or Part D coverage, or to change plans during this time. The changes will take effect Jan. 1, 2022.
- Jan. 1, 2022, to March 31, 2022: Individuals enrolled in a Medicare Advantage plan also can switch to a different Medicare Advantage plan, or disenroll from a Medicare Advantage plan and enroll in an Original Medicare plan, once during this time.
- Dec. 8, 2021, to Nov. 30, 2022: Once during this period, individuals can switch from their current Medicare plan to a Medicare Advantage plan with a five-star quality rating.
Special enrollment periods also allow individuals to make changes to their coverage as a result of certain life events, like moving or losing health insurance provided by an employer. To learn more about Medicare, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227). Krischa Winright is an executive vice president at Senior Health Services, Emergent Holdings. Emergent Holdings is a separate entity contracted by Blue Cross Blue Shield of Michigan to perform administrative services for Blue Cross’ Medicare Advantage program. For more information about Medicare and Medicare Advantage plans offered by Blue Cross, visit goconfidently.com. More from MIBluesPerspectives: