Q&A: Medicare is complicated. Here’s how it works

Dear Liz: My husband and I are in our 50s and have widowed moms in their 80s. We always understood that when you begin taking Medicare, you are required to choose a plan such as SCAN or Blue Shield and to follow that plan’s benefits and limits. However, my friend who works in a hospital told me that you can elect to have straight Medicare and have no plan limits. Can you explain this?

Answer: What you’re asking about is known as traditional or original Medicare, which consists of two parts. Part A is usually premium-free and covers hospitalization. Part B covers doctor visits and has a standard monthly premium of $148.50.

Traditional Medicare is administered by the federal government and is accepted by the vast majority of medical providers but doesn’t cover everything. For example, beneficiaries must pay deductibles, 20% of Part B services and a portion of hospital stays. For that reason, many people with traditional Medicare also buy supplemental or “Medigap” policies from private insurers to cover these costs. Most Medigap plans, like traditional Medicare itself, don’t have out-of-pocket limits.

By contract, Medicare Advantage plans, also known as Medicare Part C, do have out-of-pocket limits. Medicare Advantage plans are “all in one” coverage provided by a private insurer rather than the government. These plans provide everything covered by Parts A and B of traditional Medicare, and may cover other costs such as vision, hearing and dental that traditional Medicare doesn’t. The plans typically have networks of doctors and other medical providers. If you get care outside that network, you would pay more and sometimes all of the cost.

The final part of Medicare is Part D, prescription drug coverage. That’s purchased from private insurers and may be included in Medicare Advantage plans.

Obviously, Medicare can be complicated, but you can educate yourself at Medicare.gov and download or request the handbook “Medicare & You.”

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Comments

  1. Diane Ohaniannn says

    Dear Liz, I’ve read your most recent columns about Medicare Advantage and believe that more should be said before people decide to go that route. You also mentioned that switching from Medicare Advantage to Medicare itself can be problematic. As someone who has had both plans and now have Medicare with a Medigap plan, I want to say that the best (and by the way easiest) switch my husband and I made was to go back to Medicare. People should understand that Medicare Advantage plans become their primary insurance, severely limiting their ability to go to whatever doctor or hospital that is most convenient ~ when traveling they are limited to the hospital and doctor they chose with their Advantage plan, the one near home! My husband could not go to a doctor I had because we were signed up at different local hospitals. So, I phoned Medicare in 2009 and a young man was so helpful, and in no time we were back on Medicare. He said to go to the Medicare web site, choose from the many medigap options offered (8 at that time, but only 6 now) that suited our needs, and we did. It was that easy. We opted for no co-pays, skilled nursing care, and much more. Granted, our monthly premiums are more than they would have been before, but since that date we have not laid out one cent for medical care including doctor visits, my husband’s open heart surgery (at a hospital of our choosing), emergency room and surgery for my broken ankle, and annual EKGs to monitor his heart. Surprisingly, we also have coverage for foreign medical treatments and took advantage of that in 2018 for minor surgery needed. The Medigap insurance covered 80% of that when our travel insurer refused to pay. Our Medigap policy also allows us to go to any doctor or hospital without a referral. And, of course, Medicare is accepted throughout the US, which Advantage plans are not. The tens of thousands of dollars we have saved in the last 11 years make it worth paying more each month, and we have peace of mind.

  2. Diane Ohanian says

    Please spell my name correctly!