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Selecting the right health insurance plan is essential for retirees as well as caregivers who are helping their loved ones.  However, Medicare, the default government program that provides health insurance for Americans over 65 is notoriously complex to navigate.

Aside from the alphabet soup of coverage options, you’re faced with having to understand, what makes Medicare confusing is that, unlike typical healthcare coverage, Medicare is not one single plan but is divided into a variety of public and private options.  You have to select the right combination to get the best coverage for your needs.

The average Medicare beneficiary has over 60 options to choose from, so it’s important to get help from an expert. 

Luckily, I’ve founded a company called CoverRight that delivers a simple and seamless service that handles the red tape for you, so you can get the right coverage without any of the hassle.

“There is no one size fits all Medicare plan,” says Richard Chan, Founder & CEO of CoverRight.  “Everyone’s situation is different and a plan that works for your friend or neighbor may not work for you.  CoverRight is here to help make things simple – we’ve built a unique online platform and team of friendly advisors dedicated to helping you find the right plan.”

Medicare Basics

The default coverage for Medicare is called “Original Medicare” and consists of two parts:

  • Part A is Hospital Insurance and covers inpatient care at hospitals, plus hospice. If you’ve paid enough Medicare taxes while you worked, you’re eligible to get Part A coverage for free (this is the case for most people). If you ever visit the hospital, you pay a deductible of around $1,500 which covers the first 60 days of stay.
  • Part B is Medical Insurance and covers doctor visits, outpatient care, and preventative services. Part B will pay for 80% of your costs meaning you have 20% out-of-pocket.  The premium for Part B is around $170 per month and can be higher depending on your income. 

 Neither Part A nor Part B has prescription drug (or ‘Part D’) coverage.  In addition, Original Medicare Part A and B do not cover all your costs. This is why 9 in 10 Medicare beneficiaries have some form or private or supplemental coverage.  The three main types are:

  • Medicare Supplement (also known as ‘Medigap’ plans): These are private plans that provide ‘gap’ coverage for costs that Original Medicare doesn’t cover such as the ~$1,500 hospital deductible and 20% out-of-pocket costs mentioned above. 
  • Medicare Advantage (also known as ‘Part C’ plans): These are all-in-one bundled private plans that typically combine the coverage of Part A, Part B, and Part D into a single plan.  Medicare Advantage plans are an ‘alternate’ to Original Medicare.  When you choose Medicare Advantage, you’re choosing to receive your coverage through a private company contracted with the government to deliver you Medicare, rather than directly from the government under Original Medicare.
  • Prescription Drug Plans (also known as ‘Part D’ plans): Are offered by private insurance companies and you buy this separately unless you’re in a Medicare Advantage plan which bundles Part D coverage.  The monthly premium can vary by plan but importantly the cost of drugs can differ significantly depending on the plan.

Medicare Advantage vs. Medicare Supplement

The main decision most beneficiaries will have to make is whether they should enroll in Medicare Advantage or stay in Original Medicare and purchase gap coverage (i.e., a Medicare Supplement or ‘Medigap’) plan when it comes to their hospital and medical costs.

There are two advantages and two disadvantages of Medicare Advantage plans, compared to Medicare Supplement plans. 

Advantages

  • The first advantage of Medicare Advantage is premium costsMedicare Advantage plans typically have much lower premiums than Medicare Supplement plan – in fact, 54% of Medicare Advantage plans have $0 premium, while the most popular Medicare Supplement plans can cost from $90 to over $200 per month.  Whether you choose Medicare Advantage or Medicare Supplement, you’ll still have to pay your underlying monthly Part B premium of $170.
  • The second advantage is bundled benefitsMedicare Advantage plans bundle benefits such as prescription drug coverage (Part D), as well as other extra benefits such as dental, hearing, and vision that Original Medicare will not cover, into a single plan - typically at no additional cost.

Disadvantages

  •  The first disadvantage of Medicare Advantage plans is network restrictions:   Medicare Advantage plans are private plans that typically have a network of doctors you are required to use.  If your plan does allow you to see out-of-network doctors, this will cost more than seeing in-network doctors.  In contrast, Medicare Supplement plans work alongside Original Medicare and therefore you can see any doctor that accepts Medicare across the country and there are no network restrictions.
  • The second disadvantage is out-of-pocket costs:  Medicare Advantage plans charge copays when you receive medical services.  While copays for doctors’ visits are affordable, the costs of hospital visits and other services you may use in a year are not capped until you hit a maximum out-of-pocket limit which can range from $3,000 to up to $11,000, depending on your location and plan.  With Medicare Supplement plans, you typically have limited to zero out-of-pocket costs no matter how many times you use healthcare services because these costs (or ‘gaps’) are covered through the extra $90-$200+ monthly premium.

Getting help from an expert

CoverRight is a free service that combines technology with friendly advisors to make what can be a difficult, confusing, and frustrating process a lot easier.  The company’s mission is to make Medicare more transparent and accessible, and its aim is to provide you with personalized suggestions so you can enroll in the right bundle of Medicare plans.

The company helps both retirees and their caregivers.  “Caregivers’ lives are busy.  Our goal is to help them navigate the Medicare system so they can focus on what’s important.”

You can start the process online with their clear and concise 20-minute Medicare 101 course which walks through various enrollments periods and how to avoid Medicare late enrollment penalties.  You can also complete an online quiz which will give you an initial recommendation on what combination of plans suits your situation best.

The company gives you a dedicated agent that is with you from beginning to end.  Importantly, CoverRight doesn’t favor any particular insurance company, the company lists a large variety of plans and prices, allowing consumers to get an instant and transparent picture of options available.

 

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