One way to cover your Medical expenses when you turn age 65 is to go with a Medicare Advantage Policy. These differ from Medicare Supplements (a.k.a. Medigap) in several ways. Whereas a Medigap policy covers the gaps in coverage that Medicare fails to cover, a Medicare Advantage Policy (a.k.a. MA) supplants Medicare’s co-payments, co-insurances, and deductibles with its own set of (usually) smaller fees. For example, if you discovered that you had Glaucoma and needed outpatient eye surgery, Medicare would cover 80% leaving you with 20% to pay for yourself. If the doctor did not accept Medicare assigned rates you would have an additional 15% on top of the 20%! However, if you had a MA Policy, you could find that for $200 you could entirely cover your expenses. Quite an improvement! In addition, MA plans are run by private companies based on their guarantee to the Fed’s that people will have access to medical care that is at least as good if not better then Medicare
Most but not every single co-payment and deductible is lower on a MA policy then on Medicare so it pays to read the fine print. Another benefit to a MA policy is that it usually also covers drugs in the same policy. Then it is called an MAPD. Medigap policies, on the other hand, do not cover drugs. Also, an MAPD usually, but not always, has no drug deductible. Compare this to a $445 deductible standard in many stand-alone drug plans. Just like a Medigap, You have to maintain the cost of your Medicare coverage to get an MA or MAPD. The good news is that certain MAPD’s are zero cost policies! How can that be? The Federal Government is subsidizing the MAPD policies with a portion of that money that they are charging you for Medicare.
One disadvantage of an MAPD is that it typically limits you with a specific network of doctors and hospitals with whom the Insurance Company has contracted. It is for that reason that often times MAPDs or MA plans are not available in more rural areas where an Insurance Company network has few doctors. The recent passing of the Affordable Care Act affected MAPD plans in one way. It pulled back Federal subsidies from those plans that promised a level of medical service that they were not delivering. A number of plans were unaffected. However, many plans lost subsidies & started charging lots more money. But that is not necessarily bad for the client! When a plan goes through a very significant change, such as a rate hike, by law they have to give their clients an opportunity to leave the policy and choose any MAPD Policy or Medigap policy without regards to their state of health. That’s why some people who don’t qualify for a Medigap policy sign up for a MAPD which is easier to get into, and then wait for their “guaranteed” exit when the Plan makes a major course correction!
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