Original Medicare, Parts A&B and a Supplement is usually a Medicare beneficiary’s best option available once you turn 65 when you are faced with the decision of which Medicare Plan to choose. As long as the cost for the monthly premium is affordable then purchasing a Medicare Supplement policy to supplement your Original Medicare will be your best option. Here’s why: Choosing Original Medicare and a Supplement will give you access to the entire Medicare system nationwide, whereas Medicare Advantage plans have specific networks and you must stay within those networks. Also with this option you do not require referrals to see a Specialist. Once again, If you choose Original Medicare at age 65 you will want to purchase a Medicare Supplement policy. The reason why is because Original Medicare only covers you at 80%. A Medicare Supplement policy would cover the 20% gap that Medicare does not cover which is why it is sometimes referred to as a “Medigap” policy. The main reason one would want to select a Medicare Supplement along with their Original Medicare at 65 is because once you turn 65 you would be guaranteed a Medicare Supplement policy. In other words, there is no medical underwriting. If you decide to sign up for a Medicare Advantage plan when you turn 65 and let’s say a few years down the road you realize that Original Medicare and a Supplement was the better option, you could switch during the Annual Election Period, however, you would be subject to medical underwriting at that time and you could be turned down based on your Medical history. My personal observation is once folks realize that they should have taken Original Medicare and a Supplement policy it’s usually too late. It’s usually due to a recent change in the applicant’s medical condition that is usually the motivation to switch and it is that same Medical condition that usually disqualifies them from getting a Medicare Supplement policy. In short, the best time to apply for a Medicare Supplement policy is when turning 65. Also you may be over 65 but you are coming off a group plan. This would also give you a guaranteed issue on the new Supplement plan because you are coming from creditable Medical and Drug coverage.
Medicare Supplement plans, as mentioned previously, do not require referrals because you have access to every Primary Doctor, Specialist, Urgent Care Center, and Hospital as long as they accept Medicare and regardless of which state they happen to be in. You would have access to any one of these Medicare providers and facilities with Original Medicare and a Supplement and you would have access to Medical providers in every state in the US. Now, if you choose Original Medicare and a Supplement you will want to purchase a “Stand-Alone” Medicare Part D plan. This would cover your prescription medications. Let’s talk more about Medicare Part D and the Donut Hole.
So, I mentioned Medicare Part D. Remember, if you decide on Original Medicare and a Supplement you would need a Stand-Alone Medicare Part D plan. One of the more common questions about Part D is about the “Donut Hole”. Here is basically how Part D and the Donut Hole work: There are 4 drug coverage phases: Deductible phase, Initial Coverage Phase, Coverage Gap (Donut Hole), and finally the Catastrophic coverage phase. In the deductible phase you would pay until your deductible is reached. The deductible for 2021 is $445 and that is increasing in 2022 to $480. Most Tier 1 & 2 Meds are not subject to the deductible and only a zero or a small copayment at the pharmacy. Many of the more expensive Meds like the Tier 3, 4, & 5 are subject to the annual deductible and then a copayment at the Pharmacy. In the Initial Coverage Phase, once you and your plan have spent $4,130 between copayments and/or coinsurance you then enter the Coverage Gap otherwise known as the Donut Hole. During this Coverage Gap you will pay 25% for generic and brand name drugs. Once you have spent $6350 in out-of-pocket costs you will exit the Donut Hole and go into the last phase which is the Catastrophic Coverage Phase where you will pay only 5% of the drug price. Just a side note: We were told that the Donut Hole would be eliminated.
The 25% that you would pay during the Donut Hole phase used to be about 37% and they did reduce that to 25%, so they did lower the cost, however, I think more work needs to be done by big Pharma to bring drug prices down. If you are interested in Dental and/or Vision coverage, you could purchase those policies but they would be separate from Original Medicare, the supplement, and the Part D Plans. Feel free to call me with any questions or to discuss your personal situation.
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