Here's how it works: You pay a monthly premium for your Medicare supplement plan. In return, the plan pays most of your out-of-pocket expenses. How much the plan pays, depends upon the
plan type you select. For example, if you go to see a physician, Medicare will only pay 80% of the bill. You are responsible for paying the remaining 20%. However, you are covered
by a Medicare supplement plan, the supplement plan would pay the 20%. You would owe nothing.
There are 10 standardized plans available – labeled A, B, C, D, F, G, K, L, M and N – that cover anywhere from four to nine of these benefits:
- Medicare Part A coinsurance for hospital costs (up to an additional 365 days after Medicare benefits are used).
- Medicare Part B coinsurance, copayment.
- First three pints of blood for a medical procedure.
- Part A hospice care coinsurance or copayment.
- Skilled nursing facility care coinsurance.
- Part A deductible.
- Part B deductible.
- Part B excess charges.
- Foreign travel emergencies.
Keep in mind, all 10 Medicare supplement plans cover the coinsurance and 100 percent of hospital costs for Medicare Part A, but after that, plans differ in what they cover.
With Original Medicare, you are free to see any doctor who accepts Medicare patients, with no referrals required.
Good to know: When it comes to medical services, shop around for a better deals. Patients often think that medical fees are set, but just like any other business, costs for goods and services can vary widely. Shop the cost of exams, tests, procedures, medications, nursing facilities, and imaging centers before non-emergency events. The price of an MRI on one side of Main Street can be $500, and $2,500 on the other. Healthcare pricing, as a rule, is arbitrary. Even the pharmacy you choose can be the difference in hundred of dollars annually.
How Medicare Advantage plans work
Medicare Advantage plans (also known as Medicare Part C) combine doctor, hospital and often drug coverage into one plan. Some may cover routine dental, vision and hearing needs, and may offer other services.
Most Advantage plans offer prescription drug coverage.
Medicare Advantage plans are offered by private health insurance companies. These insurance companies provide consumers with Advantage plan coverage. In turn, rather than Medicare
paying a physician or hospital for services provided, Medicare pays an ongoing, predetermined amount to the insurance company for providing the Advantage plan coverage.
Medicare Advantage plans usually have copays and deductibles, but many limit the total amount you will have to pay for medical expenses out of pocket each year.
Medicare Advantage plans work like the managed care plans you may have had during your working years. You will have to receive your care from doctors, hospitals, and other providers within the plan's network.
Plans can be health maintenance organization (HMO), or preferred provider organization (PPO). If you have an HMO, you can only visit doctors and hospitals in those networks. PPO plans have out-of-network benefits as well.
Visits to a specialist often require referrals, and some types of care may require advance approval.
Whichever option you choose, it is an important choice. Be sure to speak directly with a Medicare insurance professional before you make your decision.
Other articles: Is Short-Term Health Insurance Right For You?
Finding Short-Term Health Insurance.
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