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Understanding Medicare: Part 2

Medicare | Sep 14, 2015

In the first part of this series, you learned about the four distinct parts of Medicare. Unfortunately, costs are not always covered by Parts A, B, C and D. As a result, those plans fall under two different plans, which are explained further below.

What is Medigap?
According to the official website for Medicare, a Medigap policy is sold by private insurance companies to help you with the costs not covered by Original Medicare. These costs may include copays and deductibles. To qualify for this policy, you must be signed up for Part A and Part B. Further, Medigap only covers one person at a time, meaning a couple will each need to obtain individual policies.

If you are leaning toward a Medigap policy, there are also some financial obligations. First, you cannot have a Medigap policy and a Medicare Advantage plan. Before you sign up for this policy, make sure to find a provider in your area because Medigap is meant to supplement your existing Original Medicare benefits.

Once you enroll in a Medigap policy, you will pay two monthly premiums. One payment is for Medigap and the other for your Part B monthly premium to Medicare. However, supplemental plans typically do not cover other areas such as dental and vision.

Financially, costs for an Advantage plan will vary, and in some instances, seniors may have higher monthly premiums and costs not associated with a Medigap plan. Likewise, there may be some out of pocket expenses when seniors use their Medicare Advantage plan instead of a Medigap policy.

What is Medicare Advantage?
Medicare Advantage is also classified as Part C. Essentially, this enables you to enroll in private, Medicare-approved insurance plans. You may choose this option if you're enrolled in an Original Medicare plan.

For instance, out-of-pocket costs may fluctuate, so take into account whether the Advantage plans charge a monthly premium, provide the type of coverage you need and how often you require those services. Costs will also be dependent upon what type of plan options you choose. As part of Medicare Advantage, you have the option of choosing Health Maintenance Organization (HMO), or Preferred Provider Organization (PPO) options. This flexibility is ideal if you wish to customize your health insurance options.

However, you should be aware of some requirements when joining Medicare Advantage. Other than living in the service area and having Original Medicare coverage, you can't have an end-of stage renal disease, according to the official Medicare website. Some exceptions do exist.

As you can see, Medicare contains many details that determine the type of health insurance coverage you will receive. It's important for you to set aside enough time to go over your options so you can receive the best health care when the time comes.