Original Medicare vs Part C
You’re probably familiar with Original Medicare. You may know that when you turn 65 you’ll get certain health care benefits from the government. This article is “Original Medicare vs Part C“, to understand the difference between them, we must first understand them individually.
What is Original Medicare?
Original Medicare is a fee-for-service health plan that has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). Original Medicare is coverage is managed by the federal government.
Who qualifies for Orginal Medicare?
Medicare is available for people age 65 or older, younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or transplant).
You must also be either a U.S. citizen or an alien who has been lawfully admitted for permanent residence and has been residing in the United States for 5 continuous years prior to the month of filing an application for Medicare.
What does Part A cover?
In general, Part A covers:
- Inpatient care in a hospital
- Skilled nursing facility care
- Nursing home care (inpatient care in a skilled nursing facility that’s not custodial or long-term care)
- Hospice care
- Home health care
What does Part B cover?
Part B covers 2 types of services:
- Medically necessary services: Services or supplies that are needed to diagnose or treat your medical condition.
- Preventive services: Health care to prevent illness (like the flu) or detect it at an early stage, when treatment is most likely to work best.
- You pay nothing for most preventive services if you get the services from a health care provider who accepts assignment.
In general, Part B covers:
- Clinical research
- Ambulance services
- Durable medical equipment (DME)
- Mental health
- Limited outpatient prescription drugs
How much does Original Medicare Cost?
Most people don’t pay a monthly premium for Part A (sometimes called “premium-free Part A”). You are eligible for premium-free Part A if you are age 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years. This is based on Social Security worker’s credits, you get 4 credits for every year that you have worked and paid taxes. You need 40 credits to get premium-free part A, so if you worked for 10+ years you will have earned 40 credits.
If you paid Medicare taxes for less than 30 credits, the standard Part A premium is $499 per month in 2022. If you paid Medicare taxes for 30-39 credits, the premium is $274 per month in 2022.
Part A also has a deductible and coinsurance you have to pay.
- $1,556 (2022) deductible for each benefit period.
- Days 1-60: $0 coinsurance for each benefit period.
- Days 61-90: $389 (2022) coinsurance per day of each benefit period.
- Days 91 and beyond is $778 (2022) coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
- Beyond lifetime reserve days you pay 100% of all costs
The standard Part B premium amount is $170.10 2022 per month (or higher depending on your income).
Part B also has a deductible and coinsurance. In 2022, you have to pay a $233 deductible. After your deductible is met, you typically pay 20% of the Medicare-Approved Amount for most doctor services (including most doctor services while you’re a hospital inpatient), outpatient therapy, and durable medical equipment.
What does Original Medicare NOT cover?
Original Medicare does NOT cover…
- Long-Term Care
- Prescription Drugs
- Most Dental Care
- Eye Exams
- Cosmetic Surgery
- Hearing Aids or Exams
- Routine Foot Care
You will have to pay out of pocket for these services or buy additional insurance to help you pay for them.
Don’t get confused by all these numbers, If you have questions about anything relating to this article or any general questions about Medicare, don’t hesitate to call me directly on my cell phone. My name is Daniel and my number is 727-777-3661. You can also visit us online at www.LocalMedicareServices.com to schedule an appointment.
What do most people do?
Over 60% of people who enroll in Original Medicare, keep it. The reason they do that is because when you have Original Medicare, you can go to any doctor or facility in the whole United States who accepts medicare. Over 95% of doctors and medical facilities accept medicare. You don’t have to ask anyone for permission to somewhere. It’s the ultimate healthcare freedom you can have.
Medicare alone is not enough, if you keep Original Medicare the way it is, you are exposing yourself to the potential of a financial disaster if your health goes south. It can bankrupt you and take away all your savings which you have worked hard for.
Most people just buy a Medicare Supplement plan or also known as Medigap. For an additional monthly payment, you can buy a Medigap plan that will cover all the fees mentioned before.
What is Medicare Part C?
A Medicare Advantage Plan is another way to get your Medicare Part A and Part B coverage. Medicare Advantage Plans, sometimes called “Part C” are offered by Medicare-approved private companies that must follow rules set by Medicare.
Most Medicare Advantage Plans include drug coverage (Part D). There are several types of Medicare Advantage Plans. Each of these Medicare Advantage Plan types has special rules about how you get your Medicare-covered Part A and B services and your plan’s supplemental benefits.
If you join a Medicare Advantage Plan, you’ll still have Medicare but you’ll get most of your Part A and Part B coverage from your Medicare Advantage Plan, not Original Medicare. You must use the card from your Medicare Advantage Plan to get your Medicare-covered services. Keep your red, white, and blue Medicare card in a safe place because you’ll need it if you ever switch back to Original Medicare.
How do Medicare Advantage Plans work?
When you join a Medicare Advantage Plan, Medicare pays a fixed amount for your coverage each month to the company offering your Medicare Advantage Plan.
Companies that offer Medicare Advantage plans must follow rules set by Medicare. However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to doctors, facilities, or suppliers that belong to the plan’s network for non emergency or non-urgent care). These rules can change each year. The plan must notify you about any changes before the start of the next enrollment year.
Who can join a Medicare Advantage Plan?
To join a Medicare Advantage Plan you must:
- Have Part A and Part B.
- Live in the plan’s service area.
What do Medicare Advantage Plans cover?
Most Medicare Advantage Plans offer coverage, for some things Original Medicare doesn’t cover, like some vision, hearing, dental, and fitness programs (like gym memberships or discounts). Plans also have a yearly limit on your out-of-pocket costs for all Part A and Part B medical services. Once you reach this limit, you’ll pay nothing for services Part A and Part B cover.
Most Medicare Advantage Plans include Medicare drug coverage (Part D). In certain types of plans that don’t include Medicare drug coverage (like Medical Savings Account Plans and some Private-Fee-for-Service Plans), you can join a separate Medicare drug plan.
There are different types of Medicare Advantage Plans:
- Health Maintenance Organization (HMO)
- Preferred Provider Organization (PPO)
- Private Fee-for-Service (PFFS)
- Special Needs Plans (SNPs)
- Medical Savings Account (MSA)
The area where you live might have all, some, or none of these types available. In addition, there might be multiple plans available in your area within the same type, if private companies choose to offer them.
Why would someone join an Advantage plan?
Most people who join Advantage plan like the fact that some plans have a $0 per month premium. In some of the most popular HMO plans, you only pay $0-$5 offices visits to see your primary doctor and $5-$20 to see a specialist. They also have very strong drug benefits and you have a maximum out of pocket every year. For example, your maximum might be $2500, and once you have paid that much in copays and coinsurance the plan pays 100% for the rest of the year.
Most solid HMOs also offer vision, dental, gym memberships and other perks which Original Medicare does not.
What do most people forget about Advantage plans?
HMOs are the most popular choice when it comes to Advantage plans. BUT most of these plans have networks, which means you have to use providers in the network. You first have to pick a primary doctor who is going to be managing your care. You can not just go to a specialist, you have to get a referral from your primary doctor. Everything is done with your primary doctor. Your network might only be one or two surrounding counties around where you live. If you want to go and see a doctor or facility that is not in your network, you will have to pay 100% of the bill yourself.
Who should have what?
The easiest way to budget for your health is to keep Original Medicare and buy a Medigap Policy. For the average person, this is what your cost will look like.
- Part A – $0
- Part B – $170.10
- Part D – $30
- Medigap Plan G – $175
So if you break it down, the average person who wants the enjoy all the healthcare freedoms you can get will be around $400 per month. You might have to pay more based on what drugs you are taking and you will have a $230 (2022) yearly Part B deductible.
If you can’t afford that or you just don’t want to pay that, you can join a good HMO in your area. You will have the restriction mentioned above but there is always a trade-off. Your costs will look something like this:
- Part A – $0
- Part B – $170.10
- HMO – $0
- Part D – (included in HMO)
- Copayment & Coinsurance – varies by plan and service provided
Every plan has its advantages and disadvantages. One month with an HMO you might spend nothing and the next month $700. You have to weigh all the risks and rewards offered by each plan for your personal situation. The plan your neighbor has might work great for them but not for you.