Also check the cost of any premiums, copays, and other out-of-pocket expenses, and whether there are any limits in their coverage. If extra benefits are included, such as help with hearing aids and dental bills, be sure to find out how much of these expenses will actually be covered. Compare these costs to those of purchasing Medigap and stand-alone Medicare Part D prescription drug policies. Calculate the premiums, as well as the amount of any out-of-pocket expenses deductibles, copays, coinsurance the policies may require.
Yes, these can be complex calculations, but an insurance broker can help by doing the math for you and making cost-saving recommendations. Original Medicare allows you to use any U. Most Medicare Advantage plans restrict you to using physicians in their network and may cover less, or none, of the expenses of using out-of-network and out-of-town providers.
A plus of Medicare Advantage managed care plans is that care is coordinated and your primary care doctor will be in the loop about the findings of specialists. Often this is best done by developing a relationship with a primary care physician and letting them refer you to specialists.
Are the doctors accepting new patients? Will you have to travel far to see a provider or be treated in an emergency room? Advice from local professionals, neighbors, and licensed insurance brokers can help you find Medicare Advantage plans that do business in your area. Compare plans to find one that may suit your needs. Frequent travel, dual residences, and currently having physicians whom you would like to keep are some of the factors that may make regular Medicare a good choice.
Ask your current physicians if they participate in any Medicare Advantage plans or accept regular Medicare. For frequent fliers, choosing regular Medicare plus a Medigap insurance policy that covers emergency care in foreign countries may be a good bet.
Similarly, people who spend part of the year in a different geographical area may find it difficult to stay in-network for medical care and might be better off with regular Medicare and a Medigap insurance policy. People with chronic diseases and those who develop a serious health condition should look deeper into the choices available.
A Medicare Advantage plan may be a better choice if it has an out-of-pocket maximum that protects you from huge bills. Regular Medicare plus a Medigap insurance plan generally allows you more choice in where you receive your care.
Check whether any expensive drugs or equipment such as supplies for people with diabetes will be covered by your Medicare prescription drug plan, whether it's a stand-alone one or part of a Medicare Advantage plan. Medicare Advantage plans are in the throes of change as the government allows insurers to add coverage for items that are not included in regular Medicare.
These include such things as supplying food for service animals; paying for ramps for wheelchairs, hold bars, and indoor air quality monitors; adult day care; and residential and in-home respite care. Many of these benefits are just being initiated, so it pays to reconsider your choice of regular Medicare vs. In fact, switching between the two forms of Medicare or between Medicare Advantage plans is an option for everyone during the open enrollment period.
If you switch back to regular Medicare Part A and Part B , you may not be able to sign up for a Medigap insurance policy. When you first sign up for Medicare Part A and Part B, Medigap insurance companies are generally obligated to sell you a policy, regardless of your medical condition. But in subsequent years they may have the right to charge you extra due to your age and preexisting conditions, or not to sell you a policy at all if you have serious medical problems.
Some states have enacted laws to address this. In New York and Connecticut, for example, Medigap insurance plans are guaranteed-issue year-round, while California, Massachusetts, Maine, Missouri, and Oregon have all set aside annual periods in which switching is allowed. If you live in a state that doesn't have this protection, planning to switch between the systems depending on your health condition is a risky business.
Other populations with limited Medicaid coverage are also eligible for coverage under this state option.
Medigap is a private insurance option that is designed to work well with Medicare Part A and Part B plans. Consider your priorities, like budget, choice, travel, and health conditions. While Medicare Advantage can be more affordable for people with long term health issues, Medigap gives you flexibility and choice by expanding your network. Patients can customize their Medicare Advantage to cover specific needs like wheelchair ramps, adult day care, and respite care.
National Center for Biotechnology Information, U. National Library of Medicine. Accessed Oct. Center for Medicare and Medicaid Services. Centers for Medicare and Medicaid Services. National Committee for Quality Assurance. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.
These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification. Learn more about Medicare Advantage plans and the type of companies that offer them here. Typically, private insurance is a better option for people with dependents.
While Medicare plans offer coverage only to individuals, private insurers usually allow people to extend health coverage to dependents, including children and spouses. Age can also be a factor when deciding between enrolling in Medicare or a private insurance plan. To qualify for Medicare, an individual must be at least 65 years of age or have certain conditions that meet the eligibility criteria, such as end stage renal disease.
On the other hand, private insurance is available to anyone, regardless of age. A person can have both Medicare and private insurance at the same time. In these cases, Medicare establishes primary and secondary payers. The primary payer pays the claim first, while the secondary payer covers expenses that remain unfunded by the primary payer. Medicare has various rules for establishing the primary payer. For example, Medicare is the primary payer when a person has private insurance through an employer with fewer than 20 employees.
To determine their primary payer, a person should call their private insurer directly. Learn more about Medicare and Medicare Advantage here. Medicare may be preferable to private insurance for some people, possibly due to the cost. Typically, Medicare costs less than private insurance. People with dependents may prefer private insurance over Medicare.
Medicare only covers an individual, whereas private insurance can include dependents and other family members on a single plan. Many factors may determine whether Medicare or private insurance is better for a person, including their medical needs, location, and desired coverage. It may come down to personal preference. Health insurance can be costly, and insurers are firm about applying their often rigid policies.
There are many factors in choosing cover for you and…. People with Medicare have a red, white, and blue card to prove that they have coverage. If they lose it, they will have to request another. We explain…. Medicare can reduce the costs of treatments, but there are still out-of-pocket costs to consider.
Another study found that the proportion of the elderly using physician services jumped from 68 to 76 percent between and Andersen et al. Since that time, use of services under Medicare has continued to climb.
In , If coverage is truly universal, we should expect to see groups with high levels of need receiving high levels of services. The oldest old, those with chronic illnesses, and the disabled should be disproportionately served by the program. By , the very old, whose needs are greater, were receiving considerably more in benefits than younger enrollees. In other areas where income or discrimination might play a role in denying access, a successful universal program should reduce differences among beneficiaries when their varying characteristics do not reflect differences in the need for care.
That is, equal access should, over time, diminish differences by income, race, and geographic location, unless warranted by differences in health status. Although Medicare is not yet a fully uniform program by these standards, between and , differences between the percentage of white persons and persons of races other than white receiving services declined 4 Figure 7. Although the appropriate level should not necessarily be exactly the same, there certainly is no good reason for the large differences that existed in to be sustained.
These programs reduce the problems of affordability of health care posed by Medicare's premiums and copayments. Partly as a consequence, participation in the programs remains low.
Another of Medicare's goals was to ensure that beneficiaries receive mainstream medical care, that they have access to the best and latest treatments on equal footing with other health care consumers. Indeed, when Medicare was passed, efforts were made to make the program look as much like other private insurance as possible, so that doctors and hospitals would agree to participate in the program.
Although a national strike by physicians was threatened at the time of Medicare's passage, in practice, beneficiaries were almost immediately accepted and use of services and access to care occurred as planned. Beneficiaries have unlimited access to specialists, nearly all of whom participate in the program. As the health care system has changed, so has Medicare. Delivery of health care in the United States has increasingly shifted from inpatient to ambulatory settings.
Although Medicare's basic package of benefits has changed little since , delivery of care has changed with the times. In , inpatient hospital services constituted two-thirds of Medicare's total payments National Center for Health Statistics, In , that share was just under one-half Health Care Financing Administration, An additional way to track Medicare's ability to offer mainstream care is to look at the use of various types of new treatments and procedures to see whether older patients are able to obtain such services on an equal footing with younger patients.
Again, more careful analysis would be necessary to determine what the relationship should be in terms of levels of use, but the appropriate question to ask is this: Is the rate of diffusion comparable across the groups?
This should give some indication of general access to care. These high-technology procedures are generally delivered in inpatient settings, and these two figures track the growth rates of the procedures by age group.
In both cases, growth in the use of treatments expanded rapidly from through as they were being introduced and then slowed through on an adjusted-annual-rate-of-growth basis. In these two examples, growth for the population 65 years of age or over was much greater than for those years of age over both periods. At least in these cases, as well as others not shown here, Medicare beneficiaries do not appear to be disadvantaged in terms of their access to services.
They are benefiting from new technology and at a rate sometimes greater than that of younger persons. Another indicator of how our medical care system is changing rapidly is the movement toward managed care arrangements for the delivery of health care services. Although Medicare is behind the national average in this regard, the option of enrolling in an HMO is available for many beneficiaries.
Since , when enrollment reached a little more than 2 million, the number of beneficiaries signing up for HMOs has increased dramatically. By the end of , 3. Rapid expansion in the number of participating plans means that more and more beneficiaries will be able to choose these options should they wish to do so in the future.
New offerings, including point-of-service plans in which HMO enrollees can be reimbursed for out-of-network services , are also helping to keep Medicare closer to the mainstream of activity in the private sector.
In fact, Medicare may benefit by lagging a bit behind the times, adopting private plans only after they have proven themselves in the employer-based environment. And because beneficiaries can choose whether to go into managed care or remain in the traditional fee-for-service system, they have more choice than many younger families in the employer-based market.
Finally, although it is not easy to link overall health care spending with the health of the Nation, Medicare is ensuring that the most up-to-date care is available for older persons.
The longer lives of these senior citizens attest to this and other efforts to improve their quality of life. Since , the life expectancies of men and women 65 years of age or over have risen by 2.
This compares with increases in life expectancy of only 1. Medicare will face daunting challenges over the next 30 years, and it seems likely that major reforms will be legislated.
But to a considerable degree, pressures arise because of the successes of the program. Medicare will go from serving 1 in 10 Americans to caring for nearly 1 in 5, as baby boomers begin to retire. Because Medicare serves the most vulnerable members of our population with up-to-date care, it should not be surprising that costs of the program are high. Each older beneficiary can also expect to draw more years of coverage from the system as a result of increased life expectancy.
All of these factors have contributed to the costs of the program, but they are not indicators of failure.
Future reforms should build on Medicare's strengths as well as learn from its weaknesses, recognizing the crucial role the program has played in the lives of older Americans. The author would like to acknowledge the help of Crystal Kuntz in developing the figures used in this article.
The author would also like to thank the Commonwealth Fund for its sponsorship of related research. For , expenditures by the elderly out of pocket and on various insurance premiums claimed 21 percent of the average elderly person's income Moon and Mulvey, Reprint Requests: Marilyn Moon, Ph. National Center for Biotechnology Information , U.
Health Care Financ Rev. Marilyn Moon , Ph.
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