Elder Law and special needs attorney Jim Koewler joins Suzanne to explain the differences between Medicare Advantage and a Medicare Supplement.
Basic Medicare pays 80% of healthcare costs. In addition, Medicare caps what it pays to providers. A Medicare Supplement will cover the 20% that Medicare doesn’t cover, no questions asked, with no copays and an annual deductible of about $180. Most people have Medicare Parts A and B. Doctor visits, therapy, and similar items are covered under Part B, while hospitalization and rehab center stays are covered under Part A. Neither covers prescription drug costs.
A Medicare Advantage plan is a form of “managed care” that substitutes for Medicare, so if you enroll in it, then you’re out of the Medicare system, but now in the Advantage system. These plans can have deductibles, copays, and can limit coverages to particular locales, but you may get low-cost coverage in exchange.
Learn more at http://www.protectingseniors.com or email Jim at jkoewler-afe@protectingseniors.com.
Suzanne: And welcome back everyone to Answers for Elders Radio Network. And we are here with elder law and special needs attorney Jim Koewler. And I’m gonna spell that for our listeners. It’s K O E W L E R, and for those of you that are in the state of Ohio, you can certainly look up Jim online. You can also find him on Answers for Elders. And we’re so excited to have Jim here this hour, talking about Medicare. It’s a very, very confusing time for so many of us because laws change different things happen all the time and they don’t make it easy to explain things. So, brokers are great to sometimes educate you, but also have Jim you taking the time with us. This hour is really important.
Now, we talked in the beginning of this hour, you mentioned something. It’s now open enrollment and a lot of people that are signing up for Medicare, they don’t know that they have a choice between Medicare Advantage and a Medicare Supplement. Would you kind of explain a little bit to our listeners? What is the difference?
Jim Koewler: Ok. A Medicare supplement. Well, let’s let’s start with basic Medicare. Medicare for, for people who are covered by Medicare, Medicare will pay 80% of their health care costs. And then the person is responsible for the other 20. In addition, like you see with younger persons, health insurance, Medicare puts a limitation on what it pays to the providers. So you have price controls built into the system and then an 80 20 split. Ok, a Medicare Supplement will cover the 20% that Medicare does not cover, right? There is a once a year uh deductible in the ballpark of $180. So, and I don’t mean to be flippant for someone who feels a financial squeeze, but in the health care world $180 is chump change. So that, that supple that deductible is really no reason to scoff at a supplement, right? And yes, there are some people who have supplements without a deductible because they’ve been on a supplement for a while, but that supplement ended a couple of years ago. New enrollees cannot get it. So now they have to take the deductible.
So now this is not prescription drugs on this 80 20 thing. OK. Prescriptions drugs or not.
Suzanne: But isn’t Medicare basic, Medicare part A and which is hospitalization. I know it does cover other types of services, but it’s mainly your type part A. Is that correct?
Jim Koewler: I’m not sure I’d call it mainly. The original Medicare was just hospitalization and stuff. As more and more services were provided outside of the hospital setting, Medicare part B came into existence, and that now that has a monthly premium to do it. And for most people who are in the social security system, it’s simply taken out of the social security. The premium is roughly $145 I think this year.
Suzanne: I think $149 is what I pay.
Jim Koewler: $149, yeah, I knew you were in the ballpark, and that covers outpatient stuff. Again, not drugs. So most people have A and B, because if you don’t get B when you can first get Medicare at age 65, or you don’t get an advantage plan, then there’s a penalty that applies when you sign up for B later. It sticks to your premium for the rest of your life. I would say the main part of Medicare, to use your word, is A and B, inpatient and outpatient. So doctor visits, therapy, et cetera, fall under part B. If you are driving to the therapy, going to a rehab center, rehab a board that goes with that at least for a time by part a assuming you were made inpatient, but the inpatient versus observation status is not something we’re gonna cover today because today’s show is not long enough to cover that by itself. Whole different can of worms, but there’s stronger languages I’d like to use there.
So the Supplement covers the 20% that Medicare doesn’t cover, no questions asked. Medicare covers supplement pays period other than the deductible, you’re done. No copays, no deductible. Other than that, one time a year that applies to all of your services for that year. The Medicare pays 20% 80% supplement pays the rest except for that deductible. You’re done.
Ok. Advantage plan is a form of managed care, and I realize I’m not on camera. You can’t see me furiously making air quotes around managed care. Managed care is in Jim Koewler’s not so quiet opinion a euphemism for cost control. And there are some managed care plans, both in the Medicare world and in the not yet old enough for Medicare world, that are willing to cut services in order to cut costs.
If you have an Advantage plan, you technically don’t have Medicare, the Advantage plan has substituted itself — you have substituted that Advantage Plan for your Medicare. You still have a Medicare card, but that’s not important anymore. It’s your Advantage Plan card and the money…
Remember, Medicare is an insurance program. So the federal government sets aside a certain amount of money each year as your contribution into the pool of Medicare funds, and you don’t have to pay for part A. You don’t have to pay the that insurance. That money they’re paying into the pool. If you get an Advantage plan, that money that would have been paid into the pool for Medicare covered people gets paid to the Advantage plan. That’s how Advantage plans are able to offer zero premium. You’re already getting money from the federal government because the feds don’t have to cover you. So the money they would have paid to cover to set aside to cover you. They paid Advantage plan. So you are out of the Medicare system. You’re in the Medicare Advantage system. It is regulated but it is not part technically of the Medicare insurance program.
An Advantage plan can have deductibles. An Advantage plan can have copays, an Advantage plan can say we will cover hospitalization only at this hospital in east middle of nowhere, Georgia. It can say, yeah, we know the drug that you take for your arthritis really works, but we aren’t paying that one. So you lose a lot of control, but you may get low cost premiums in exchange.
Suzanne: And Jim, you and I are gonna talk a little bit more about how you help seniors and what we do, what we need to call you for. And I’m looking forward to spending the rest of this hour with you and Jim and I will be right back right after this.
