Your Options for Medicare
Previously we discussed the structure of Medicare, and that there were options available to you for choosing your additional coverage. Original Medicare consists of Part A (hospital) and Part B (medical) and is government sponsored. If you were to keep just Original Medicare, your exposure is summarized below. Exposure is referred to as the non-covered portion that you pay out-of-pocket:
Part A: If you are hospitalized or need skilled nursing:
- Part A deductible per admission ($1,676). You may pay this more than once in a year if hospitalized more than once.
- Hospital Per Days Copays: 1-60: $0. Days 61–90: $419 per day. After Day 90: $838 per day for up to 60 lifetime reserve days.
- After Lifetime Reserve Days: You pay all costs.
- Skilled nursing facility care is covered in full for the first 20 days (after a qualifying hospital stay). Daily copays apply for days 21–100 ($209.50). You are responsible for all costs after day 100.
Part B: Medicare pays 80% of approved charges, and you are responsible for the remaining 20%–as well as an annual deductible ($257 for 2025). There is no out-of-pocket maximum—so your potential for exposure is unlimited.
Avoiding Original Medicare Financial Exposure
Since Original Medicare does not cover 100% of your medical expenses, you can purchase insurance through private companies. Your options are: Medicare Advantage plan, also referred to as Part C, or a Medicare Supplement Plan, also referred to as Medigap. Either type will help you manage the exposure left from Original Medicare—but in two very different ways.
Medicare Advantage MA/MAPD/Part C: These plans vary greatly from one plan to the next but there are a few things that they all have in common—networks.
The network consists of doctors, hospitals, and other healthcare providers who have agreed to provide services at a reduced cost to plan members. In general, there are two main types: Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO). It is important to understand the difference between these two types if choosing a MA/MAPD.
If you choose this option for your coverage, your health insurance will be managed in total by the insurance company that sponsors your plan. They will sit in primary position as first payor and manage pre-authorizations, networks and drug formularies (Original Medicare does not engage while you are under a MA/MAPD—although you still pay your Part B premium).
These plans must cover all hospital and medical services included under Original Medicare, however, they may also choose to cover additional services and offer extra benefits that Original Medicare does not. Many of these plans also include Part D prescription drug coverage, often at no extra premium. Premiums are paid monthly if the plan you choose has one.
These plans have the typical structure requiring copays and coinsurance paid by the beneficiary, up to a maximum out of pocket (MOOP) which resets every Jan 1.
Medicare Supplement/MEDIGAP: These plans adhere strictly to a state-mandated structure, offering lettered plans such as Plan F, G, N, High-Deductible F and G to name a few. Although every insurance company offering Medicare Supplement plans must offer the exact same coverage—meaning a G is a G no matter which carrier you purchase it from—they do set their own premiums for that coverage. Premium rates are determined by age and county and vary greatly across state lines, but also across carriers. Premiums are paid monthly.
If you choose this option, your health insurance will be managed by Original Medicare, as primary payor. This plan pays second to fill in the gaps of Original Medicare by paying your Part B coinsurance, Part A hospital deductible etc.
These plans do not have networks associated with them, so you can see any provider that will take Medicare. These plans do not have a MOOP because there are no copays or coinsurance paid by the beneficiary.
These plans do not include the typical extras of dental, vision and hearing, nor do they include your Part D coverage. Stand-alone plans are typically written for the Medicare beneficiary, to cover medications such as a Prescription Drug Plan (PDP), and dental and vision as desired.
Nanette Makrauer is an independent insurance broker and Certified Medicare Advisor residing in Bluffton. nanette@health-wealth-insurance.com (www.health-wealth-insurance.com)