What is Medicare?
In 1965 President Johnson signed Medicare and Medicaid into law as part of the Social Security Act Amendments. This established Medicare as the health insurance program for Americans over 65, and Medicaid as the health insurance program for low-income Americans. President and Mrs. Harry Truman were the first two Medicare beneficiaries.
Is Medicare for all? Sure, if
- You’re a legal U.S. citizen or resident aged 65, or
- You’ve been on Social Security Disability for more than 24 months, or
- You have amyotrophic lateral sclerosis (ALS), or
- You have end-stage renal disease (ESRD).
Is Medicare Free?
No, but Part A can be prepaid. If you have worked for 10 years or 40 quarters and saw a little deduction that says “Medicare” on your paystub, or you were self-employed and paid income taxes, then you’ve completely paid forever and ever, amen for your Medicare Part A, or hospital premium. Congratulations!
All that’s left to pay for is your monthly Part B premium . . . and your Medicare Supplement and prescription drug plan premiums, if you choose Original Medicare.
HUH? Back up, back up! How does Medicare work? Okay, I’ll explain.
Original Medicare has two Parts:
A – Hospital coverage
B – Doctor visits
If a person works for 10 years or 40 quarters and has had a Medicare contribution deducted from her paycheck, then at age 65 he or she has completely prepaid all the Part A premiums. People usually enroll in Part B at the same time; Part B has a monthly premium, in 2024 it’s $174.80. This is called Original Medicare and the premiums entitle you to 80% coverage. But there are deductibles and copayments for each part, going up every year.
The 2024 Part A deductible is $1,632 for each time you use a hospital or skilled nursing facility, besides the following copayments:
- Hospital days 61-90: $408 coinsurance per day of each benefit period
- Hospital days 91 and beyond: $816 coinsurance per each lifetime reserve day for each benefit period
- Skilled nursing days 21-100: $204 coinsurance per day of each benefit period.
- Days 101 +: You pay all costs. (This is long-term care territory)
The Part B premium in 2024 is $174.70 per month for most people, depending on income. Plus, you pay a $240 deductible in 2024 before Medicare pays your doctors.
If a person does not take Part B when he is first eligible to take it (at least within the first 12 months), he will be fined 10% for each 12 months that he could have had it but didn’t. So someone going 24 months without Part B and without “creditable coverage” (meaning employer/spouse employer coverage) would pay a permanent 20% fine on top of the base, which this year is $174.70. (Doing the math, this would be $174.70 + 34.94 = $209.64 for 2024, whew!)
But what’s missing? Yes, the drugs!
Part D is for Drugs
Part D covers drugs and the deductible in 2024 is $545. If you don’t sign up for a drug plan when you first can, then there is a permanent 1% per month fine for all the time you could have had a drug plan and didn’t. So someone missing Part D for two years would pay 24% times the National Average Premium, which for 2024 is $34.70; this would be a penalty of $8.33, rounding up to $8.40 a month in 2023!
Part D is a rather intense subject; for a deep dive into Part D, please click here.
There is no Maximum Out Of Pocket (“MooP”) with Original Medicare; every time one goes into the hospital within a certain time period, the Part A deductible is triggered again, plus those hospital stay copayments. This could be potentially bankrupting! To answer this need, in 1966 the Aetna Life Insurance Company came up with Medicare Supplement insurance plans.
Medicare Supplements, aka Medigap Plans
Medicare Supplement (or Medigap) plans have alphabet names, like F, G, N, etc. (This is where so much of the confusion comes in – thanks Aetna, lol!) People reaching age 65 in 2024 can no longer purchase a Plan F, which covers ALL the deductibles and copayments for Part A and B; now G is the hot plan. Plan G covers everything except the Part B deductible. The Plan G premiums are actually more cost-effective than those of Plan F. Plan N is another Medicare Supplement plan that covers a bit less and so it’s usually less expensive. (Check with me first, that’s not always the case!)
So what people who like Original Medicare do normally is to pay their Part B, pay for a Medicare Supplement, and also pay a monthly prescription drug plan premium (some are pretty inexpensive). But this can still be hundreds of dollars a month, and every different cost goes up every year.
(Want to learn more about Medicare Supplement Plans? Click here!)
Why do people choose Original Medicare?
Many people prefer Original Medicare because they don’t have to pick a primary care physician (or ”gatekeeper”) and can go anywhere Medicare is accepted in the United States! (This option is especially good for people who have many different doctors in various networks or even states, or have had a serious health condition and need follow-up, because it offers the most freedom and no authorizations are needed. For example, if you want to see an orthopedist, just go see one – no referrals necessary.)
Part C, or Medicare Advantage
Congress passed the Medicare Prescription Drug Improvement and Modernization Act of 2003, approving private companies to operate what became known as Medicare Advantage plans. In 2006 the Act was amended to include optional prescription drug benefit, Part D. Medicare Advantage plans cover the Part A and Part B annual deductibles and in most states all A and B copayments, and usually include a Part D prescription drug plan, many for just the price of the Part B premium.
Also, most offer additional benefits that Original Medicare doesn’t provide, like dental coverage, vision, hearing aids, fitness membership, transportation, an over-the-catalog catalog, personal emergency response systems, and worldwide health coverage. Some companies even provide pest control, dog walking, wigs, or groceries! Many plans charge $0 for doctor and specialist visits, some charge $0 for hospital stays, depending on your ZIP code. There are even companies that offer a partial rebate of your Part B premium to your Social Security check.
The vast majority of Medicare Part C/Medicare Advantage plans are HMO plans, with a few PPOs and SNPs (Special Needs Plans) depending on where you live. Some companies you may have heard of include SCAN, United HealthCare, Blue Shield, Anthem, and Aetna – there are literally DOZENS of Medicare Advantage plans right here in Southern California. They’re all very competitive, trying to outdo the other companies in terms of benefits or lowered maximum out of pocket or a stronger drug formulary.
Many people choose Medicare Advantage plans because they have all of their doctors in one group, their prescription drug deductible is usually $0, and they enjoy all the extra benefits – all for just the price of their Medicare Part B premium or less!
What About PPOs?
PPOs are a Medicare Advantage product; they generally come with drug coverage included and in 2024 Southern California has a choice of some great Medicare PPOs, some with no premium! You do have a network, but can go out of network for a higher cost share. Doctors like them, but they can end up being costly if you’re a “frequent flyer.”
If you’re in Nevada, Arizona, Texas, Missouri, or Nebraska, there are lots of zero-premium PPOs! If you’re in one of those states and like to travel the 50 States, go ahead – your PPO will go with you.
Many Advantage Plans Now Cover Viagra!
But wait, I have Medi-Cal!
Can you help me? Of course! There are many wonderful Medicare Advantage plans for those on Medi-Cal who’d like to enjoy extra benefits if you have no share of cost. Even with a share of cost, I can find you a great plan.
Medicare vs. Other Insurance
If you have great employer group coverage, the price is right, and you like it, you don’t have to have Medicare Part B just yet. BUT I HIGHLY recommend that you apply for Part A if you’ve already prepaid it. It won’t cost you anything and you can choose your own future time to apply for Part B. Please click here for the Disenrollment from Part B form. (You’ll have to download it from the site.)
Helena, where do I start?
I have good news – I can find you the very Best Medicare for your wallet and your health needs! Please get together a full list of your doctors and a complete list of your medications. I will chat with you to find out what you want from your new health insurance so you can get the coverage you deserve at a price you’ll like. And if I find that you already happen to be in a great plan that is the best for you at this time, I will tell you so, no obligation. Please email me your list at Helena@GetGreatPlans.com or call me directly at (714) 657-6355 and I will personally return your call.
Why should I call Helena and not go directly to XYZ Medicare Company?
There is no cost to use an agent or broker, as the insurance companies pay us agents. I am an independent agent, and by going direct to XYZ Medicare a captive agent will enroll you, because they can only enroll people into their own company’s product. As your agent, in many cases I can order you a new insurance card, inform your insurance company if you’ve moved, and I can help expedite situations for you with your medical group if you happen to have one. I also check in with my clients yearly to see if their needs have changed so we’re sure they’re still on the best plan available. You are welcome to call me at any time (well, not during the night, I have to sleep sometime) with any questions or concerns, and as your agent, I help you. I am captive to you!
Required Disclaimer: “We do not offer every plan available in your area. Currently we represent 0 to 28 organizations that offer 0 to 28 or more products in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.” So there.