Finances at Four: Medicare Open Enrollment

Medicare, Medicaid and open enrollment can all be a big financial headache.

Financial Advisor Carl Kielbasa, with Carroll Retirement Plans & Investments, is helping break it all down into understandable portions.

It’s open enrollment season for Medicare until Dec. 7, and if you are near 65, you’re going to be bombarded with all kinds of information that might be really confusing.

Kielbasa has some help for anyone on information overload.

‘Original’ Medicare

“What’s called ‘original’ Medicare is part A and part B,” Kielbasa says. “Part A covers hospital stays, so if you need to go to the hospital, that’s what part A is going to help with. Part B covers other things like doctor visits, labs, x-rays. Those two combined make up original Medicare, which pays 80 percent of those costs.”

The question becomes what about that other 20 percent, which can be a significant amount of money.

There are two options to choose from to help cover that 20 percent or replace it all as a whole.

Medicare Supplemental Plans and Medigap

Medicare Supplement and Medigap are two names for the same thing. There are 10 standardized plans across the country that are sold by private insurance companies.

However, costs for plans can vary.

“Costs can be different, prices can be different per private insurance company for each level of plan,” Kielbasa says. “Meaning two people may have plan F, and they may be paying two different costs for that plan.”

In broad, generalized terms, Medicare supplemental insurance has higher premiums, but costs less when you need service.

“When you have something wrong, you go to the doctor, you’re paying less,” Kielbasa says. “But you pay more each month with the supplemental plan.”

Supplemental plans also, generally, do not include prescription, dental or hearing. Those have to be bought separately.

Medicare Advantage Plans

Medicare Advantage plans are a little newer to the market compared to supplemental plans, Kielbsasa says.

This plan generally takes all of the insurance, part A, B, and D, which is prescription, and combines them into one policy.

They also offer the dental vision and hearing if you want those.

“With Medicare Advantage plans, same way, they are offered through private insurance companies, they’ll have things like co-pays and deductibles similar to the insurance you and I have now,” Kielbasa says. “The big difference there is that Medicare Advantage plans very generally speaking are cheaper each month, but you may have higher costs when you need services done. But one nice thing about Medicare Advantage plans like insurance you and I have now, is they have what are called out of pocket maximums. Meaning this is the most you can ever spend out outside of your premiums, per year even if you have a catastrophic event happen.”

The best way to know what plan works for you is to consult an insurance agent or financial advisor.

For more financial advise and information, you can contact Carroll Retirement Plans & Investments.

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