Medicare and Health Insurance

Medicare and Health Insurance

Medicare is a program offered by the United States that provides health insurance primarily for people over 65. While Medicare enrollment is automatic, many people wonder how this system works and what their best options are if they already have private insurance. Here, we will take a look at how Medicare works with private insurance and what to consider when deciding which plan to enroll in.

How Does Medicare Work?
Payroll taxes are the primary source of Medicare funding. Those eligible to receive social security benefits at age 65 become automatically enrolled in Medicare Part A and Medicare Part B. While Medicare Part A covers hospital costs, Part B covers your doctor visits. However, there are additional parts of the Medicare program that you may enroll in that can supplement your private insurance. While Part D covers prescription medications, Part C is called Medicare Advantage and can cover various healthcare costs that your private insurance may not cover.

Private Health Insurance: How It Works With Medicare?
Many people have both private health insurance and Medicare simultaneously. This practice is called “dual coverage” and can provide additional coverage, possibly lowering your out-of-pocket cost. Although there are several benefits to having both, it can be a confusing process when managing benefits and claims. Understanding how these types of health insurance can work together and carefully reviewing your coverage can help you ensure you’re getting the best possible coverage that meets your healthcare needs.

Private Health Insurance and Medicare Plan Coverage Options
Some private insurance companies’ contract with Medicare, making supplemental insurance possible. These are called Medicare Advantage plans and are an option for those wanting to receive Medicare Part A and B benefits through their private insurance companies. However, you must make sure they are Medicare-approved. When you use Medicare Advantage, your benefits come through this plan, which features its own deductibles, premiums, and copayment amounts.

The Benefits of Medicare Advantage
Medicare Advantage plans will often include prescription drug coverage, saving you money. Some have additional benefits, such as gym memberships and routine dental, hearing or vision care. While you’ll still pay the premium for Medicare Part B, some Medicare Advantage plans have $0 monthly premiums, making them a good option for those sticking with a budget. In addition to usually having $0 monthly premiums, you can apply up to three months before turning 65.

The Drawbacks of Medicare Advantage
While most Medicare Advantage plans come with a $0 monthly premium, they may also come with out-of-pocket expenses that add up over time. So, you need to make an informed decision on your individual circumstances and evaluate the coverage in terms of your anticipated total healthcare expenses. You may also have network restrictions that can change annually. If you’re considering Medicare Advantage, you must see in-network doctors, so keep this in mind if you do not want to switch your current provider. Referrals to see a specialist are also usually required. Only emergency services are available outside your coverage area, which is something to consider if you plan on traveling frequently once you retire.

The Bottom Line
While Medicare Advantage plans are popular, it’s wise to consider every factor prior to enrolling. With Medicare Advantage, your private healthcare insurance company takes over your original benefits, and with this comes the potential for non-medical plan administrators to be placed in charge of healthcare decisions, including denials for claims and procedures. However, if you are looking for a Medicare option with low monthly premiums that may offer additional coverage and protections and do not mind receiving care from network doctors, then Medicare Advantage may be a perfect fit for your healthcare needs.

Have more questions?

We at K&B Financial would be happy to answer any questions that you have about your healthcare options. Contact us today!

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