MEDICARE PARTS AND PLANS
“Parts and plans put pressure on patients to pick perfect provisions.”
Whew! It’s easy to trip over all those p’s! Lots of people trip over Medicare’s p’s too, as it has both parts and plans. It can be difficult to remember which p word is which. Learning the difference is your first spoonful of Medicare’s alphabet soup.
Parts refers to Medicare’s areas of coverage. Plans pertains to extra insurance you can buy to supplement or replace basic Medicare.
So Medicare is divided into four parts, and you can purchase plans to enhance the benefits and reduce out-of-pocket costs for some of them.
The least complicated aspect of Medicare is that it has 4 parts, simply labeled A, B, C, and D:
· Part A is hospital insurance
· Part B covers physician and outpatient services
· Part C includes Medicare Advantage (MA) and Cost plans
· Part D covers prescription drugs
Parts A and B are mandatory. Parts C and D are optional but may provide increased coverage and/or reduce costs. An analogy that may help you picture this is grocery shopping. Buying food for your family is mandatory. But you can choose the option to have your groceries delivered or shop at a discount store, which may save you time and/or money.
Plans are offered by insurers to bundle with or supplement Original Medicare. These include Medicare Advantage (MA) and Medicare Supplement (SUPP) plans. MA plans provide expanded services at low cost. SUPPs, also called Medigap insurance, pay for gaps in coverage when you use services or facilities. Basically, they reduce or eliminate copays and coinsurance. In Colorado, eight MA carriers and nine different SUPPs will be offered for 2021
This is an area of confusion—many people call us with questions about a SUPP, and we eventually learn that they mean MA or Part C coverage, not a Supplement.
Specific terminology is used in both parts and plans. You’ll need to know these to choose and later, to use your healthcare coverage. These are the most common:
Premium: The amount you pay (usually monthly) for health insurance. Payroll deductions already paid for Medicare Part A, so you are not billed an additional premium for this. Your Part B premium is paid to Medicare. You may also pay premiums to other vendors for optional coverage such as MA, SUPP, or Part D drug plans.
Deductible: A fixed amount you pay out of pocket for services before either Medicare or your Medicare plan, or both, start paying.
Copay: A fixed amount you pay at the time of service. Example: You pay a $40 copay when you see a specialist.
Coinsurance: The percentage you pay when receiving a covered service. Example: An MRI may require 20% coinsurance. Medicare or your Medicare plan pays 80% and you pay 20% of the charge.
Maximum Out-of-Pocket (MAX OOP): The cap on the amount you must pay for services in a plan year. This doesn’t include premiums but does include deductibles, copays, and coinsurance. After you meet the maximum out of pocket, your health plan pays 100% for the rest of the year.
Hope this helps clear up some of the confusion that seems to permeate Medicare.
For additional help call: 858-689-7445