Welcome to Medicare School Daily, where we help you understand Medicare, save money,
avoid mistakes, and above all else, get the most out of your Medicare benefits.
Now, when you decide to enroll into Medicare, you will enroll into what we call original Medicare
A and B. Now beyond A and B, you will get some additional insurance also.
Almost all people do.
Now, there's only two options for additional insurance beyond A and B. One of those options
is to get a supplemental plan.
The other one is to get an advantage plan.
Advantage plans are called replacement plans.
Now, I'm not going to talk about advantage plans today.
We have plenty of instruction on MedicareSchool.com about those plans.
My focus today is on Medicare supplemental plants.
And the question is which supplemental plan is the best?
And so to understand supplemental plans and to make the decision for which is best for you,
you have to understand that Medicare pays very well. A and B does pay well, but it does
not pay all the expenses.
They leave you with some financial liabilities;
we call those gaps in your coverage.
So Medicare pays,
but you have some liability and you may want to get a supplemental plan to cover those liabilities.
And so let's review real quickly that liabilities that you have an original Medicare.
And remember, Medicare is broken up into two parts, A and B. On A, you have three liabilities.
On B, you have three liabilities.
So we have three gaps in both A and B.
So let's review them quickly.
On the A of Medicare,
it just means you've been put in the hospital.
That's what starts Medicare A benefits.
You have a deductible this year of $1,408.
So you're hospitalized;
It costs you out of your pocket $1,408.
And this is all you actually have to pay for up to a 60-day stay in the hospital, which
is going to cover probably ninety-nine percent of every situation.
But if you're ever in the hospital longer than that, now you have a second liability.
Month three, you have a daily copay of $352.
That's $10,500 if you're in the whole month. Month 4 and month 5,
they double a copay now at $704 every day.
And that's $21,000 month 4; $21,00 for month 5.
Now these hospital co-pays are rare.
In other words, extended stays are not real common.
But when they occur, folks, you can see they're very expensive and you're liable for those
expenses.
And then the last gap on A is called skilled nursing facility.
Now, a skilled nursing facility is for someone that's had a stroke or maybe a hip replacement,
and they needed some fairly intensive rehab.
Medicare says as long as you're in the hospital a minimum of three days, then the doctor can
put you in skilled nursing and they will cover all the expenses for the first 20 days.
Doesn't cost you a penny.
But if you're in skilled nursing beyond 20 days, you have now 80 more days of eligible
coverage, but you're responsible for a daily copay of $176.
So these are your liabilities on the A of Medicare, the inpatient side.
Now, let's talk about the outpatient side, which is called Medicare Part B.
We start off with a deductible of $198.
Now, this is a calendar year deductible.
So if you start Medicare, let's say July one, this is your deductible until 12/31.
Then that number will reset every January. Last year, that read $185;
it reset for this year at $198.
Two years ago that read $183.
So when it reset it only went up two dollars went from $183 to $185;
This year $185 to $198.
So every year this resets. Sometimes they never raise it, and sometimes they raise it a little bit.
Historically, it's been very
low, but that is the B deductible.
So this means the first $198 of anything that would be outpatient related
services is going to end up as a bill in your mailbox.
Now, that could be probably a couple of doctor visits, maybe with some lab work.
Let's say the first service you have for the whole year is an MRI.
That first $198 is going to come out of your pocket at that MRI.
Let's say you have cataract surgery for the first time for the year.
That first $198 of cataract surgery expense is going to come out of your pocket.
But once a year you meet the B deductible,
and then after that, Medicare then is an 80/20 plan.
Medicare pays 80 percent.
You pay 20 percent.
We call that coinsurance.
Now, the problem with your 20 percent is it is totally unlimited.
So Medicare keeps paying their 80 percent, but you have to keep paying your 20 percent,
called coinsurance.
And folks, this is actually your biggest liability today.
Your biggest gap will be that 20 percent because it never stops.
And then lastly, we have the possibility of going to a doctor that will add to the Medicare
bill.
We call that Medicare approved amounts.
And there are some doctors that will do that.
Now, the most they can add is 15 percent.
But when they add that 15 percent, you're responsible to pay for it.
So those are our gaps on the B of Medicare.
So all of these gaps are your responsibility, your liability for original Medicare.
So majority people will see the risk and say not real comfortable with that amount of risk.
And they want to transfer that risk away to an insurance company.
And when they do that, they're buying a supplemental plan.
Now, folks, there's actually 10 different plans available.
A, B, C, D, F, G, K, L, M, N.
Now, I'm not going to bore you with all 10 of those.
I'm going to tell you about the top three plans.
In fact, I'd venture to say probably 90 to 95 percent of the Medicare population buys
one of these 3 plans.
So let's look at the differences so you can decide what's best for you.
Now, if you buy an F plan, the F plan is truly a full coverage plan.
So obviously the highest cost plan as well.
But the way the F plan works is as long as Medicare pays first, F follows and picks up all the expenses,
fills in all the gaps.
We tell our folks with F plans
if you get a bill,
Don't pay it because you should never really get a bill.
Medicare pays; that F's going to follow 100 percent expense.
Now, there's an issue, though, with the F plan.
Anyone that is born before January 1st, 1955, can still buy F plans. But anyone born after
January 1st, 1955, you cannot purchase an F plan.
OK, all the group here was grandfathered in,
And you can buy F plans if you're born before that.
If not, you cannot.
All right?
So that takes us to our second plan.
If you're born after January 1st, 55, you may want to look at a G plan.
Now, G plan is very similar to the F plan
but in one area. You'll notice we have full coverage on the hospital side, all the gaps
covered. On the B side,
Two of the three gaps are covered.
But the one gap that you're now responsible for will be that $198
deductible.
So once a year, whatever the B deductible is, you're responsible to
pay for that. F paid it, G does not.
And that's the only difference other than the premium.
And there'll be a lower premium course for the G plan.
I'll show you that just a minute.
So that's the only difference in
coverage is the B deductible.
So whenever that resets every January, then you'd have to pay the first whatever that
amount is out of your own pocket after that full coverage.
And then lastly, the N plan.
Very popular today.
Again, the same coverage on the A of Medicare.
All the gaps are covered as far as hospital and a skilled nursing facility is concerned.
But now we have actually two of the three gaps that are not covered by the N plan.
Again, we have the B deductible
you're responsible for the first $198,
but notice we have an asterisk because once we've met the $198, we're not done over
here on the B side for outpatient services.
Because now what we have is we have a couple of co-pays.
So you go to a doctor, go to a specialist, your primary care doctor, you're going to
have a 20 dollar copay that you would owe.
So we meet our $198,
and then each time you go to the doctor, we pay that 20 dollar copay or if we go to the emergency
room,
now we have a 50 dollar copay.
Again, that's cheap.
But the point is, we have a couple of co-pays added to that.
And of course, your premiums are going to be different.
So with the G one liability; with the N
we have two liabilities plus the possibility of co-pays.
So those are the difference in coverages.
Now, let's talk about the differences in cost.
Obviously, if we have an F plan, that's going to be a full-coverage plan.
So you're just going to simply pay full costs for those.
Not really a very good value in today's market,
and so that's why the majority of people are doing G plans, which we're going to save
about 40 dollars a month.
So if you take 40 dollars a month times twelve,
We just saved $408.
What do we have to spend of that $480?
We save $480,
And all we had to do is pay our $198.
So we really netted ahead on that.
The savings alone and premium was enough to cover our B deductible.
All right?
So it's a very good value.
Now, when it comes to the N plan, as we compare it to the G plan, we're going to save about
20 dollars a month, sometimes twenty-five dollars a month, so we are going to save somewhere
between 240-300 dollars a year.
And what do we take on?
We took on some co-pays to the doctor, to the emergency room.
And we also have to pay the excess if and when that occurs.
So if we have a doctor that adds 15 percent to the bill on the N plan, that's going
to be fully out of your pocket
and there's no limit to that.
And some of you decide you're comfortable with that liability of excess charges and
some co-pays.
And this extra 240-300 a year in savings is worth it.
Others of you say Nah, not real comfortable with that, I think a G plan is a better value.
But regardless, there is no right or wrong.
There is no better than another plan.
It's totally up to you, depending upon what kind of risk you're comfortable with and how much
premium you want to budget for your health care expenses.
So those are the differences between these particular three plans.
And you have to decide what's best for you.