Medicare Supplement

Medicare is health coverage sponsored by the federal government.  Medicare truly works the way it is set up. It is available for those who qualify or are of Medicare age 65.

Basic Medicare has two parts.  Medicare Part A covers hospitalization and doesn’t cost you a dime. Medicare Part A is automatic coverage when you turn 65.  Medicare Part B is optional.  Medicare Part B covers physicians and outpatient coverage.  It does cost the Medicare Part B participant a monthly fee.  This fee is determined by the government on an annual basis depending on your contribution to the Medicare program throughout your working life.

Right now, the typical cost for Medicare Part B coverage for 2024 is projected to be approximately $180 a month.  Medicare Parts C & D are additional programs that are part of Medicare coverage.  Medicare Part C programs address the various programs that work with Medicare.  These plans are typically called Medicare Advantage plans (MAPD Plans).  Medicare Part D plans (PDP Plans) cover prescription drugs.

Medicare Supplement insurance plans (Gap Plans) are the same regardless of insurance carrier. The Medicare program specifies the coverage available on any supplement plan such as the A, B, C, D, F, HDF, G and N plans.  Your supplement plan coverage is identical from every provider but prices, although similar, may vary between carriers.

Medicare supplement plans provide the member with choice. Members of a supplement plan can visit any doctor of their choice who participates in the Medicare system.  The purpose of the supplement is to pay for excess portion of the members Original Medicare cost share.  If you only have basic Medicare, you could be liable for up to 20 percent of your health-care costs. This expense is not capped.  It is unlimited, unlike traditional health insurance coverage.  So, if you’re hospitalized and end up with a $100,000 bill, you would be liable for $20,000, after your deductible, if you only have basic Medicare. Supplements limit a member’s excess Medicare exposure.

Medicare Supplement insurance plans and Part C MAPD plans.

Medicare supplements address the co-pay and deductible amounts so you don’t have to pay that amount.  The supplement makes Medicare insurance work very similar to commercial insurance by capping your maximum out-of-pocket expense so you don’t have to worry about depleting your assets to cover health insurance costs.

The other Part C Medicare product is a Medicare Advantage Plan or MAPD. The government set up advantage plans so that an insurance carrier can create a plan that will do everything Medicare does and possibly more.  The advantage plan through the insurance carrier essentially becomes your Medicare system.  You can pick any insurance carrier you want in your geographic area.  Humana is probably the most recognized national carrier.  However, once you sign up for an advantage plan you must stay within the network. Typically, an advantage plan doesn’t cost you anything in premiums and some of them even cover your Part B premium. You don’t pay a premium, but you do pay for services, as you need them. You pay a co-pay or coinsurance for the physician, hospitalization, outpatient surgery etc. If you become sick, the costs do add up, but even advantage plans have a cap for the maximum out-of-pocket expense.

Medicare supplement allows you to go to any doctor and any hospital that accepts Medicare.

The major difference between supplement and advantage plans is that the supplement allows you to go to any doctor and any hospital that accepts Medicare anywhere in the U.S. If you are in an advantage plan, you are tied to the network; and the only reason you would be treated out of the network would be in the case of an emergency.  However, if you contracted a rare form of cancer, and you found the best hospital and physician to treat you was in Houston, Texas, at MD Anderson, with the advantage plan you wouldn’t be covered; with a supplement plan, you would.

This is not to say an advantage plan is bad. In most cases, they are extremely good, extremely effective and work just like any other hospital plan commercially available for people under age 65.  There are limitations under the Medicare Advantage Plan, but there are not under the Medicare supplement plan.

The last part of the Medicare alphabet is the Medicare Part D plan (for prescriptions) that gives you coverage for the pharmaceutical products you need. It is required coverage and premiums vary by provider.  Medicare members are penalized, if they are not members of a Part D plan.  There are many carriers to choose from for Part D coverage.