Entering Medicare can be a great opportunity to enhance your health insurance benefits at an affordable price. Unfortunately, many people experience stress as they consider starting their Medicare benefits. It doesn't have to be that way, though. By spending a little time learning how Medicare works, how much it costs, and what your options are for lowering your costs, you can make a plan that brings peace of mind. In this article, we’ll review the costs of basic Medicare, and also help you understand how Medicare Supplement Plans in Texas work.
Original Medicare, which is split into Parts A (hospital coverage) and B (basic medical benefits), provides excellent coverage in terms of services and procedures. Medicare covers all the medical procedures you’re likely to need. What Medicare doesn’t cover, though, is 100% of the cost associated with your care.
Medicare was designed with the requirement for you to share in the cost for all of the services and procedures you’ll use. These costs include:
One or more of these costs will be present every time you seek medical care, with the exception of certain preventative services, which are free under the terms of Medicare.
You’ll pay the Part A deductible when you need to stay in the hospital. Once you meet the deductible ($1,600 for 2023), Medicare covers you for 60 days in the hospital and 20 days in a skilled nursing facility (if needed). If you require more days, you will then start paying the daily co-insurance amounts.
You’ll also have to meet the Part B deductible ($226 for 2023) before Medicare starts paying for the cost of your Part B (routine non-hospital) services. After you’ve paid that amount, Medicare pays 80% of the cost, and you’re responsible for the remaining 20%.
Unfortunately, there are no caps on your spending. You will keep paying these costs all year long, no matter how much you’ve spent. To lower the amounts that you’ll spend, you should consider adding Medicare Supplement Insurance.
Medicare Supplement Insurance is a coverage offered by private insurance companies. This coverage is also called Medigap. It has this nickname because it is said to close the gaps (the costs you have to pay) in Medicare. Medigap plans work with your Medicare benefits. You add Medigap to your basic Part A and B benefits.
As mentioned earlier, this coverage works with Medicare; it supplements those benefits. One way to think of it is that Medigap Plans pay what Medicare doesn’t. Since these coverages work together, you will use them both when you pay providers or facilities for your medical care. Your provider will bill both. Medicare will pay first, according to the basic benefits, and your Medigap plan will pay the remaining (smaller) amount, assuming that you’ve met the deductible for the year. How much your Plan pays depends on which specific Medigap Plan you enroll in.
Medigap Plans are standardized in 47 states, and Texas is one of these. In these states, there are ten basic plans and two high deductible options, making a total of 12 standardized plans. These plans are labeled by letter: A, B, C, D, F, G, K, L, M, and N. Every one of the 12 plan options offers a unique coverage combination. For example, some of these plans cover the Part A deductible, and some don’t. Some cover Part B excess charges while others do not. Since each standard plan has its own coverage level, you’re able to choose a plan that best meets your individual needs.
The plans are the same in all of the standardized states, so the benefits provided by any of the basic Plans are identical; i.e. Plan G in Texas has the same benefits as Plan G in Nebraska. This feature allows you to easily shop for coverage and compare your options on price.
There are two major differences between these two coverages. For one thing, the way that you pay for coverage, and how much you pay for services, is very different. With Medicare Supplement Insurance, you pay a premium each month (generally between $90 and $160, depending on your age and coverage level). In exchange for this, your out of pocket costs for medical care are extremely limited. You might pay only a few hundred dollars per year, no matter how much care you receive.
Medicare Advantage plans tend to have much lower premiums (very often $0 per month), but in exchange, you’ll pay co-payments and co-insurance throughout the year for all the services you use. You are likely to pay more out of pocket on services with Medicare Advantage coverage.
The other major difference is that Medicare Advantage Plans are purely private health insurance coverage. While they are legally required to cover every service and procedure that Part A and B cover, these plans are actually an alternative to Medicare. You’re no longer in the government program. This means that you usually have to use a network of doctors and providers because most Medicare Advantage plans are either HMOs or PPOs.
With Medicare Supplement Insurance, you have complete freedom to see any doctor or facility, anywhere in the nation that takes Medicare patients.
You can enroll in a Medigap plan as long as you are enrolled in both Part A and Part B. If you enter Parts A and B when you turn 65, or later, if you chose to delay your benefits because you were still working, you can easily enroll in a Medigap plan.
However, it can be difficult to find affordable Medicare Supplement Plans in Texas if you enter Medicare before you turn 65. Federal law doesn’t require Medigap Plans to cover people under 65; each state sets its own rules about this. Texas does require Medigap Plans to cover people under 65, but the premiums are significantly higher than for people aged 65 and older.
Your federal Medigap OEP begins when you are age 65 and also enrolled in Part B. It lasts for six months. In Texas, you also have a six month OEP when you first enter Part B, even if you’re younger than 65.
Yes, but if you apply after your open enrollment period has ended, you will have to go through medical underwriting. This means that your health will be considered as part of your application; you could potentially be declined for coverage.
Yes. This can be done during the Medicare Annual Election Period from October 15 to December 7 of each year.
No. You must get drug coverage from a standalone Part D drug plan.
Some of them do. If you want international coverage, you’ll have to choose between Plans C, D, F, G, M, and N.
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