Health Insurance

Health insurance or Medical insurance covers your medical expenses when you get sick or need preventive care. There are private health insurance and government (Federal or State) assisted or sponsored programs for different options, so it could be confusing sometimes in deciding where to get the health coverage. Below are some general guideline for a starting point:

If you receive group health plans from your employer, it is likely the best option for you to go with your company’s health plan.
If you are senior (65 or above), check Medicare option first.
If you are low-income, check Medicaid option first. Note that some states have their own Medicaid program, for example, Medicaid is called MediCal in California.
Don’t assume your income is not qualified for Medicaid.
If you don’t work or are self-employed, check Medicaid option first.
If you are qualified for Medicare, you need to apply for Medicare prior to Medicaid.

Not clear your options? - Contact our agents to discuss the best option for you.

Basic Terms

Here are some basic terms for a health insurance plan.

Premium

The amount the policy-holder or their sponsor (e.g. an employer) pays to the health plan to purchase health coverage. A premium is calculated using 5 specific factors regarding the insured person - age, location, tobacco use, individual vs. family enrollment, and which plan category the insured chooses. Under the Affordable Care Act, the government pays a tax credit to cover part of the premium for persons who purchase private insurance through the Insurance Marketplace.

Deductible

The amount that the insured must pay out-of-pocket before the health insurer pays its share. For example, policy-holders might have to pay a $7500 deductible per year, before any of their health care is covered by the health insurer. It may take several doctor's visits or prescription refills before the insured person reaches the deductible and the insurance company starts to pay for care. Furthermore, most policies do not apply co-pays for doctor's visits or prescriptions against your deductible.

Co-payment

The amount that the insured person must pay out of pocket before the health insurer pays for a particular visit or service. For example, an insured person might pay a $45 co-payment for a doctor's visit, or to obtain a prescription. A co-payment must be paid each time a particular service is obtained.

Coinsurance

Instead of, or in addition to, paying a fixed amount up front (a co-payment), the co-insurance is a percentage of the total cost that an insured person may also pay. For example, the member might have to pay 20% of the cost of a surgery over and above a co-payment, while the insurance company pays the other 80%. If there is an upper limit on coinsurance, the policy-holder could end up owing very little, or a great deal, depending on the actual costs of the services they obtain.

Exclusions

Not all services are covered. Billed items like use-and-throw, taxes, etc. are excluded from admissible claim. The insured are generally expected to pay the full cost of non-covered services out of their own pockets.

Coverage limits

Some health insurance policies only pay for health care up to a certain dollar amount. The insured person may be expected to pay any charges in excess of the health plan's maximum payment for a specific service. In addition, some insurance company schemes have annual or lifetime coverage maxima. In these cases, the health plan will stop payment when they reach the benefit maximum, and the policy-holder must pay all remaining costs.

Out-of-pocket maximum

Similar to coverage limits, except that in this case, the insured person's payment obligation ends when they reach the out-of-pocket maximum, and health insurance pays all further covered costs. Out-of-pocket maximum can be limited to a specific benefit category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year.

Capitation

An amount paid by an insurer to a health care provider, for which the provider agrees to treat all members of the insurer.

In-Network Provider

A health care provider on a list of providers preselected by the insurer. The insurer will offer discounted coinsurance or co-payments, or additional benefits, to a plan member to see an in-network provider. Generally, providers in network are providers who have a contract with the insurer to accept rates further discounted from the "usual and customary" charges the insurer pays to out-of-network providers.

Out-of-Network Provider

A health care provider that has not contracted with the plan. If using an out-of-network provider, the patient may have to pay full cost of the benefits and services received from that provider. Even for emergency services, out-of-network providers may bill patients for some additional costs associated.

Prior Authorization

A certification or authorization that an insurer provides prior to medical service occurring. Obtaining an authorization means that the insurer is obligated to pay for the service, assuming it matches what was authorized. Many smaller, routine services do not require authorization.

Formulary

The list of drugs that an insurance plan agrees to cover.

Explanation of Benefits

A document that may be sent by an insurer to a patient explaining what was covered for a medical service, and how payment amount and patient responsibility amount were determined. In the case of emergency room billing, patients are notified within 30 days post service. Patients are rarely notified of the cost of emergency room services in-person due to patient conditions and other logistics until receipt of this letter.

Who are you shopping for?

The family plan

The family plans usually have a family deductible in addition to individual deductibles for each family member. Individual deductibles are lower than the family deductible. Once an individual hits their individual deductible, their health insurance plan kicks in just for them. But once the family deductible is met, health insurance kicks in for every member of the family, regardless of whether or not an individual has reached their deductible.

Students

You can stay on a parent’s health insurance plan until you’re 26 years old. You can also check your university for health insurance plans, which may be more affordable. This is an especially good option if you’re going to college out of state, as your parent’s plan’s network may not work in your state. If your parents have group insurance through their employer, then your coverage will typically end the month of your 26th birthdate. If your parents are covered by a marketplace health insurance policy, then your coverage will remain until the end of the calendar year. Note that ACA mandates the extension of dependent coverage at least to 26 years old, however there are some states law requires the cut-off age beyond 26, for example the cut-off age for New Jersey is 31.

Self-employed

If you just became self-employed after leaving a full-time W-2 job, you can use COBRA to continue your previous employer's coverage until you're able to find a new plan. If it's not open enrollment, you should also be able to qualify for a special enrollment period to shop on the HealthCare.gov marketplace or your state's equivalent. These plans are usually more affordable than COBRA plans. Your health insurance premiums may be tax-deductible.

Low-income people

People on a low income or tight budget should look into whether or not they qualify for Medicaid. If your income is between 100% and 400% of the federal poverty guidelines, you likely qualify for a subsidy from the health insurance marketplace. Some states also offer health coverage plans for people who earn too much to qualify for Medicaid but can't afford to purchase an individual plan.

Veterans

If you’re a veteran, you may qualify for health care through the U.S. Department of Veterans Affairs (VA). The Affordable Care Act does not change VA health benefits. If you have health insurance coverage through a private-sector employer, you can have and use both your group health insurance plan and your VA benefits at the same time.

If you are pregnant

All qualifying health insurance plans cover pregnancy and childbirth-related services. Maternity care and childbirth are one of the 10 essential benefits required on qualifying health plans under the ACA. These services are covered even if you became pregnant before your coverage starts. (For most health insurance plans, you can find the specific way your plan covers childbirth in your Summary of Benefits and Coverage document.)

Having a child counts as a qualifying event for a special enrollment period in which you can enroll in a new plan or switch plans. (In some states, becoming pregnant also qualifies you for a special enrollment period.)

Maternity care and childbirth are also covered by Medicaid and CHIP. If you qualify for Medicaid and CHIP (Children’s Health Insurance Program) and are pregnant, you can apply at any time during the year through your state agency or marketplace.

Senior citizens

If you’re above the age of 65, you qualify for Medicare, a federal program designed to help you cover health care costs into old age. You can also purchase supplemental insurance, called Medigap, that can help pay for your deductibles, copayments, and coinsurance. Medigap plans may or may not make sense for you. Permanent residents of the same age may be eligible for Medicare as well.

If you are in the military

If you’re an active duty service member, your health care (and your family’s health care) is covered by TRICARE (https://www.tricare.mil/). You do not need to purchase additional health insurance to comply with the ACA.

If you are married with no kids

If you're married but don't have kids, you may not need to buy health insurance as a family. You can buy individual plans from separate companies, if that makes sense for you and your spouse. You can also purchase a family plan from the marketplace. One of you can also be a dependent on the other's employer-provided health insurance plan, if that's available.

Types of Health Insurance

Generally, there are two types of health insurance: public health insurance (like Medicaid, Medicare, and CHIP) and private health insurance.

Public health insurance programs are funded and run by the government, but are not necessarily free, although the cost could be significantly reduced. Most people have some form of private health insurance, whether they purchase it through a marketplace or get it from an employer. State exchanges and the federal exchange can offer consumers both public health insurance and private health insurance. These health insurance plans can be further categorized as different plan type, like PPO, HMO, EPO or POS. These plans are considered ACA (Affordable Care Act) compliant.

Short-term health insurance plans do not provide full health benefits (non-ACA compliant) and are not considered a form of major medical insurance. These short-term health insurance plans are only a stopgap measure meant to cover a few, but not all, medical expenses. It can be useful for people who aren’t able to buy a health plan on the exchange because they don’t qualify for an enrollment period.

Supplemental health insurance provides coverage where your usual health insurance plan does not. Some examples include dental and vision coverage, but other supplement health plans cover specific medical conditions.

Common Medical Plans

Exclusive Provider Organization (EPO):

A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan’s network (except in an emergency).

Health Maintenance Organization (HMO):

A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.

Point of Service (POS):

A type of plan where you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans require you to get a referral from your primary care doctor in order to see a specialist.

Preferred Provider Organization (PPO):

A type of health plan where you pay less if you use providers in the plan’s network. You can use doctors, hospitals, and providers outside of the network without a referral for an additional cost.

Health Saving Account (HSA):

A health savings account (HSA) is a tax-advantaged savings account used in conjunction with an HSA-compatible high deductible health plan (HDHP) to pay for qualifying medical expenses. Though HSAs can be attached to group health insurance coverage, employers can contribute to the account whether they offer a group policy or not, and the account goes with the employee when they leave the company. However, you can only contribute to an HSA if you have an HDHP. HSA contributions may be made pre-tax, up to certain limits set annually by the IRS. Any unused funds in an HSA account roll over each year and accrue interest tax-free. Your workers may also withdraw funds for other non-medical expenses, but this will incur penalties and interest if you're under 65 years old.

Health Reimbursement Arrangement (HRA):

HRAs are IRS-approved, employer-funded health benefits that allow you to reimburse your employees for their qualifying medical expenses tax-free, including individual health insurance premiums and out-of-pocket costs. HRA is owned by the employer whereas HRA is owned by the employee.

With an HRA, the employers have complete budget control by setting allowance amounts for your employees, while employees enjoy the freedom of choosing the health services and the type of care that works best for them. Your employees can purchase their own coverage from the Health Insurance Marketplace and choose the health carrier that works for their location and needs instead of being forced into a one-size-fits-all group plan.

Fee-For-Service (FFS):

FFS Plans are also called Indemnity Plans, for which the insurance company pays a predetermined percentage of the reasonable and customary charges, or the average fee within a geographic area, for a given service, and the insured pays the rest.

With most of the indemnity plans (not all), there's no provider network, so patients can choose their own doctors and hospitals. The fees for services are defined by the providers and vary from physician to physician, leaving the insured on the hook for potentially large and possibly unexpected medical bills, depending on how much the provider charges for the service.

Medical Plans' Costs and Tiers

In general, monthly premiums for HMO plans tend to be lower, while PPO plans have higher premiums. But the deductibles and other out-of-pocket costs like copayments and coinsurance for a health plan will vary based on your insurer and how much care you seek. A high-deductible health plan (HDHP), which enables the insured person to open an HSA account, may be an HMO with one insurer, and an EPO with another. If you want to find affordable care, a better way to determine health care costs would be based on the health insurance metal tiers, which are a quick way to categorize plans based on rough cost split.

Bronze - 40% consumer / 60% insurer
Silver - 30% consumer / 70% insurer
Gold - 20% consumer / 80% insurer
Platinum - 10% consumer / 90% insurer

The idea is that same tier plan from different carriers should be comparable for coverage and copayment / coinsurance structure. In general, bronze plans have the lowest monthly premiums and platinum plans have the highest.
There's a fifth category of health insurance plans that you may see on the marketplace, called "catastrophic" plans. Catastrophic plans have very high deductibles — often, the deductible is the same as the out-of-pocket max — which means they're really only useful for preventing an accident or serious illness from causing you to go into severe debt. Catastrophic plans are only available for people under 30 or people with a hardship exemption.

Where to buy medical insurance?

On-exchange private health insurance

On-exchange private health insurance policies are plans that are sold on government-run exchanges, like a state exchange (e.g. coveredca.com) or HealthCare.gov, the federal exchange. On-exchange plans must cover the 10 essential benefits, plus any additional services that are mandated by your state government.

Additionally, any insurer that wants to participate in a government-run exchange must offer a plan at every metal tier (more details can be found in the MediCare and MediCaid section). On-exchange private plans are the only plans for which premium tax credits and cost-sharing reductions (i.e., government subsidies for qualifying applicants) are available.

Off-exchange private health insurance

Off-exchange private health insurance policies are plans that are sold either directly by the health insurance company, through a third-party broker, or a privately-run health insurance marketplace. Off-exchange plans must cover the 10 essential benefits and follow other rules dictated by the Affordable Care Act — meaning you don't have to worry about any loopholes or "gotchas" with off-exchange plans.

The caveat with off-exchange plans is that you typically can’t apply any subsidies (e.g., the premium tax credit or cost-sharing reductions) to these plans. (If you qualify for a subsidy, you might be redirected to your state exchange or HealthCare.gov.) Providing an off-exchange plan may allow an insurer more flexibility. For example, because they don't have to offer a plan at every metal tier, insurers can offer just one type of health insurance plan.

Ultimately, if you're shopping for private health insurance, and you're ineligible for a premium tax credit, looking at off-exchange plans gives you more options at potentially lower price points.

Employer-provided health insurance

Employer-provided health insurance is a form of group insurance plan, which is a type of medical insurance policy for employees or members of a company or organization. A group health insurance plan typically provides health insurance coverage to its members at a lower cost since the risk to health insurers is spread across the members of the group health plan. Employer-provided plans need to follow the same rules as other private insurance plans and cover the 10 essential benefits.

If you're eligible for an employer-provided plan, you mostly do not need to purchase additional coverage through the marketplace. If you are looking for additional coverage for Critical Illness, Accidental Insurance, etc., we can help explore the best option for you. If you are business owner looking for medical insurance plans for your employees, contact us to discuss different options - we provide full business benefit packages including medical insurance.

Open Enrollment

Open enrollment for 2023 runs from Nov. 1, 2023, to Jan. 15, 2024, for Obamacare plans that you buy on the federal exchange, although some states may have longer open enrollment periods. Note that don't be confused with Medicare Annual Election Period (AEP), which runs from Oct. 15, 2023 to Dec. 7, 2023.

For health insurance coverage starting Jan. 1, 2024, make sure to purchase a plan by Dec. 15, 2023.

For Group Medical Insurance, each employer can choose the dates and length of their open enrollment period, but their dates must fall between Nov. 15, 2023, and Jan. 15, 2024.

Most states use the federal marketplace (HealthCare.gov), but 17 states (see below) and Washington, D.C. do have their own state-based marketplaces where residents can buy coverage. States that run their own marketplaces may also offer extended open enrollment periods. For example, California's enrollment window is from Nov. 1, 2023 to Jan. 31, 2024.

States with state-based marketplace: California, Colorado, Connecticut, District of Columbia, Idaho, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Vermont, Washington

Who needs coverage?

Type of Health Insurance

Common Medical Plans

Where to buy

Medicare - Prescription Drugs Coverage

Medicare drug coverage (Part D) helps pay for prescription drugs you need. Even if you don’t take prescription drugs now, you should consider getting Medicare drug coverage. Medicare drug coverage is optional and is offered to everyone with Medicare. If you decide not to get it when you’re first eligible, and you don’t have other creditable prescription drug coverage (like drug coverage from an employer or union) or get Extra Help, you’ll likely pay a late enrollment penalty if you join a plan later. Generally, you’ll pay this penalty for as long as you have Medicare drug coverage.

There are 2 ways to receive Medicare drug coverage (Part D):

Medicare drug plans (Stand-alone PDP). These plans add Medicare drug coverage (Part D) to Original Medicare (with or without Medigap), some Medicare Cost Plans, some Private Fee-for-Service plans, and Medical Savings Account plans. You must have Part A and/or Part B to join a separate Medicare drug plan.
Medicare Advantage Plans (MA-PD) or other Medicare health plans with drug coverage. You get your Part A, Part B, and Medicare drug coverage (Part D) through these plans. Remember, you must have Part A and Part B to join a Medicare Advantage Plan, and not all of these plans offer drug coverage.

Plan	Drug Coverage
MA HMO	Usually
MA PPO	Usually
MA PFFS	Usually
MA SNP	Yes
MA MSA	No
Cost Plan	Plan specific
PACE Plan	Yes
Original Medicare	No
Medigap	No - but some legacy Medicap plans prior to 2006 included drug coverage
Medicare-Medicaid Plan	Yes

You may want to pay close attention to the following:

If you enroll in a MA MSA, you may only obtain Part D benefits through a standalone PDP.
If you enroll in a MA HMO or PPO, you may only obtain Part D benefits through their HMO or PPO plan. You can't enroll to a standalone PDP.
If you enrolled in a Cost plan or MA PFFS plan, you may obtain Part D benefits through their plan (if offered) or through a standalone PDP.

If you have employer or union coverage, call your benefits administrator before you make any changes, or sign up for any other coverage. If you sign up for other coverage, you could lose your employer or union health and drug coverage for you and your dependents. If this happens, you may not be able to get your employer or union coverage back.

If you are on COBRA, you can take Part B instead of, or in addition to, COBRA coverage. However, if you take COBRA and it includes creditable prescription drug coverage, you’ll have a Special Enrollment Period to get Medicare drug coverage (Part D) without paying a penalty when the COBRA coverage ends.

If you are on Medigap with Drug coverage, You may choose to join a separate Medicare drug plan because most Medigap drug coverage isn’t creditable, and you may pay more if you join a drug plan later. You are not allowed to have drug coverage in both Medigap and your Medicare drug plan. If you join a separate Medicare drug plan, inform your Medigap insurance company to remove the drug coverage and adjust your premiums.

Creditable Prescription Drug coverage - insurance listed below are all considered creditable prescription drug coverage. In most cases, it’s to your advantage to keep this coverage if you have it.

Federal Employee Health Benefits Program (FEHB)
Veterans’ benefits
CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs)
TRICARE (military health benefits)
Indian Health Service (IHS)

Enrollment - it is very similar to Medicare Advantage plan's enrollment timelines. You can join, switch, or drop a Medicare drug plan or a Medicare Advantage Plan with drug coverage during these times:

Initial Enrollment Period. When you first become eligible for Medicare, you can join a plan.
Open Enrollment Period. From October 15 – December 7 each year, you can join, switch, or drop a plan. Your coverage will begin on January 1 (as long as the plan gets your request by December 7).

Medicare Advantage Open Enrollment Period. From January 1 – March 31 each year, if you’re enrolled in a Medicare Advantage Plan, you can switch to a different Medicare Advantage Plan or switch to Original Medicare (and join a separate Medicare drug plan) once during this time.

General Enrollment Period. If you have to pay a premium for Part A and enroll in Part B for the first time during the General Enrollment Period (January 1 – March 31), you can also join a plan from April 1 – June 30. Your coverage will begin on July 1.

Special Enrollment Periods - Generally, you must stay enrolled in your plan for the entire year. But when certain events happen in your life, like if you move or lose other insurance coverage, you may qualify for a Special Enrollment Period. You may be able make changes to your plan mid-year if you qualify.

You can switch to a new Medicare drug plan or Medicare Advantage Plan with drug coverage simply by joining another plan during one of the times listed above. Your old drug coverage will end when your new drug coverage begins. You should get a letter from your new plan telling you when your coverage begins, so you don’t need to cancel your old plan.

Medicare drug coverage (Part D) late enrollment penalty - The late enrollment penalty is an amount that’s permanently added to your Medicare drug coverage (Part D) premium. You may owe a late enrollment penalty if at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don’t have Medicare drug coverage or other creditable prescription drug coverage. You’ll generally have to pay the penalty for as long as you have Medicare drug coverage. If you get Extra Help, you don’t pay a late enrollment penalty. 3 ways to avoid paying a penalty:

Enroll in Medicare drug coverage (Part D) when you’re first eligible.
Enroll in Medicare drug coverage (Part D) if you lose other creditable coverage.
Keep records showing when you had other creditable drug coverage, and tell your plan when they ask about it.

How much will you pay for a late enrollment penalty?

The cost of the late enrollment penalty depends on how long you didn’t have creditable prescription drug coverage. Currently, the late enrollment penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($32.74 in 2023) by the number of full, uncovered months that you were eligible but didn’t enroll in Medicare drug coverage (Part D) and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium. Since the “national base beneficiary premium” may increase each year, the penalty amount may also increase each year. After you enroll in Medicare drug coverage, the plan will tell you if you owe a penalty and what your premium will be.

Example:

Mrs. Martinez is currently eligible for Medicare, and her Initial Enrollment Period ended on May 31, 2019. She doesn’t have prescription drug coverage from any other source. She joined a PDP during the Open Enrollment Period that ends December 7, 2021. Her drug coverage was effective January 1, 2022. So there were total 31 months that Mrs. Martinez didn't have creditable prescription drug coverage. The monthly penalty is 31% x $32.74 = $10.2 for 2023, and for 2024, it will be same percentage (31%) times the new national base beneficiary premium in 2024.

Covered Drugs, Formulary, and Drug Tiering

All plans must cover a wide range of prescription drugs that people with Medicare take, including most drugs in certain “protected classes,” like drugs to treat cancer or HIV/AIDS. Formulary is a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. Each plan has its own formulary. Part D plan formularies must include:

At least two drugs in each therapeutic category.
Generic and brand-name drugs.

A Medicare drug plan can make some changes to its Formulary during the year as long as it follows guidelines set by Medicare. Your plan may change its formulary during the year because drug therapies change, new drugs are released, or new medical information becomes available. Your plan may raise the copayment or coinsurance you pay for a particular brand name drug or generic drug when the manufacturer raises the price, or when a plan starts to offer a generic form of a brand name drug, but you continue to take the brand name drug.

If your doctor needs to prescribe a drug that isn’t on your Medicare plan’s formulary and you don’t have any other health coverage that covers outpatient prescription drugs, you or your doctor can ask the plan for an exception.

Many Medicare drug plans and Medicare health plans with drug coverage place drugs into different cost-sharing levels called “tiers” on their formularies. Drugs in each tier have a different cost. For example, a drug in a lower tier will generally cost you less than a drug in a higher tier. Check with the plan to see if a drug is covered for your health condition. A plan may cover a drug for one condition but not another. Example of a drug plan’s tiers:

Tier 1–Most generic prescription drugs. Lowest copayment.
Tier 2–Preferred, brand-name prescription drugs. Medium copayment.
Tier 3–Non-preferred, brand-name prescription drugs. Higher copayment.
Specialty Tier–Very high cost prescription drugs. Highest copayment or coinsurance.

Drugs Covered by Part D

Prescription drugs
Biologics - are drugs made of natural sources (human, animal, or microorganism) that are not chemically synthesized, examples include allergy shots and gene therapies.
Insulin and Medical supplies associated with the injection of insulin (e.g., syringes, needles, alcohol swabs, and gauze) or delivering insulin into the body (e.g., an inhalation chamber)
Certain vaccines not covered by Part B, including Shingles and Tdap vaccines (tetanus, diphtheria, and pertussis/whooping cough)

Drugs Not Covered by Part D

Drugs for weight loss or gain, fertility, cosmetic purposes, symptomatic relief of cough and colds
Vitamins
Medical foods formulated to be consumed or administered enterally under the supervision of a physician that are not regulated as drugs under section 505 of the Federal Food, Drug, and Cosmetic Act
Erectile dysfunction drugs (when used for sexual dysfunction)
Non-prescription drugs
Some off-label use drugs
Drugs covered under

Plans may have coverage rules for certain drugs:

Prior authorization: You and/or your prescriber must contact your plan before you can fill certain prescriptions. Your prescriber may need to show that the drug is medically necessary for the plan to cover it.
Quantity limits: Limits on how much medicine you can get at a time.
Step therapy: You may need to try one or more similar, lower-cost drugs before the plan will cover the prescribed drug.
Prescription safety checks at the pharmacy (including opioid pain medicine)
Drug Management Programs: Medicare drug plans and health plans with drug coverage have a program in place to help you use these opioids and benzodiazepines safely.

Part D Benefits and Costs

Your drug costs will vary based on the plan you choose. Remember, plan coverage and costs can change each year. You may have to pay a premium, deductible, copayments, or coinsurance throughout the year. The Part D standard benefit structure includes:

a deductible,
an initial coverage phase between the deductible and the initial coverage limit,
a “coverage gap” phase between the initial coverage limit and the out-of-pocket threshold (also called the donut hole), and
a catastrophic coverage phase that applies after the beneficiary reaches the annual out-of-pocket threshold

The Prescription Drugs Plan coverage is actuarially equivalent to or better than the standard benefit, for example, the annual deductible does not exceed the deductible specified in the standard benefit. Once the annual out-of-pocket threshold is met, the cost-sharing must not be greater than the standard benefit. Some Part D plans may offer enhanced coverage for an additional monthly premium.

For 2023, the defined standard Medicare Part D prescription drug benefit is:

Deductible: $505 (increase from $480 in 2022)
Initial coverage limit: $4,660 (increase from $4,430 in 2022)
Out of pocket threshold: $7,400 (increase from $7,050 in 2022)
Total covered Part D spending at the out-of-pocket expense threshold for beneficiaries not eligible for the coverage gap discount program: $10,516.25 (increase from $10,012.50 in 2022)
Estimated total covered Part D spending at the out-of-pocket expense threshold for those eligible for the coverage gap discount programs: $11,206.28 (increase from $10,690.20 in 2022)
Minimum cost-sharing under catastrophic coverage benefit: $4.15 for generic/preferred multi-source drug (increase from $3.95 in 2022) and $10.35 for all other drugs (increase from $9.85 in 2022)

Please see the chart below on how the Part D benefit and cost-sharing play out:

During the Coverage Gap phase, drug manufacturers are responsible for 70 percent of the cost of the drug (known as the manufacturer discount). This 70 percent is attributed to beneficiary out-of-pocket costs and counts toward the spending necessary to reach the catastrophic coverage phase even though beneficiaries do not pay it. The out-of-pocket costs that count toward reaching the catastrophic limit are known as “true out-of-pocket” costs or TrOOP. After reaching the annual out-of-pocket threshold, the beneficiary pays either a co-pay of $4.15 for generic drugs or $10.35 for brand name drugs or a co-insurance of 5%, whichever is greater.

TrOOP - eligible True Out-of-Pocket Costs

Generally, TrOOP includes annual deductible, cost-sharing between the deductible and the annual out-of-pocket threshold,
Drug manufacturer’s discount for brand name drugs
Drugs must be on the plan’s formulary and be purchased at the Part D plan’s participating network pharmacy
Amounts paid or borne by the AIDS Drug Assistance Program and the Indian Health Service
Amounts paid by or through qualified State Pharmaceutical Assistance Programs (SPAPs), most charities, health savings accounts (HSA), flexible spending accounts (FSA), and medical savings accounts (MSA)

TrOOP - What are not counted?

costs for drugs not on a Part D plan’s formulary, unless it is an approved formulary exception
costs for over-the-counter (OTC) and other non-Part D drugs
costs for covered Part D drugs obtained out-of-network
costs paid for or reimbursed to an enrollee by insurance, a group health plan, most government-funded health programs (e.g. Medicaid, CHIP, TRICARE, FEHBP, HRA, etc.)
costs for drugs purchased outside the United States

Note that most Part D plans have a network. Out-of-network normally means higher cost-sharing and its cost doesn't count towards TrOOP. Network pharmacies include retail pharmacies and may also include mail-order pharmacies. Within the Network, there could be some preferred pharmacies that offer lower level of cost-sharing.

Medicare Drugs Coverage

Madicare

Medicare is a U.S. government health insurance program that subsidizes healthcare services. Citizens age 65 years old or over automatically qualify for Medicare. Permanent residents of the same age may be eligible as well. Americans under 65 are eligible for Medicare if they are receiving Social Security Disability Insurance (SSDI) for at least 24 months. Younger Americans with end stage renal disease (permanent or terminal kidney failure) or Lou Gehrig’s disease (amyotrophic lateral sclerosis, or ALS) are also eligible for the federal program.

Medicare is divided into four categories: Medicare Part A, Part B, Part C (also called Medicare Advantage), and Part D for prescription drugs.

Medicare Part A premiums are free for those who made Medicare contributions for 10 or more years through their payroll taxes. The coverage is not 100% for all the services - there are copay, deductible, or coinsurance requirement for different procedures.

Patients are responsible for paying premiums for other parts of the Medicare program.

There is possible out of pocket cost, for example copay, deductible, and/or coinsurance, and more importantly there is no cap on these costs on Part A and Part B, so Medigap or Medicare Advantage plan can be used to mitigate the risk for the uncovered costs.

Medicare Advantage plans offered by the private insurance providers package Standard Part A and Part B coverage together with some additional benefits (e.g. Vision, Dental, or Drugs etc.) at no additional premium or at more additional premium depending different plans.

Type of Medicare	Coverage	Required	Cost
Medicare Part A	Hospital care	Yes	Usually no premium. Some procedures require deductible, copay, or coinsurance
Medicare Part B	Outpatient care	Yes, but can delay	Premium, deductible, coinsurance
Medicare Part C - Medicare Advantage	Hospital + outpatient care and more	No	Varies by plan
Medicare Part D	Prescription drug plan	No, if you have prescription drug coverage	Varies by income and plan
Medigap	Out-of-pocket costs for Part A and B	No	Premium, deductible, copay

What is Covered by Medicare

Medicare Part A

Part A (Hospital Insurance) helps cover:

Inpatient care in a hospital

Inpatient care in a skilled nursing facility (not custodial or long-term care)

Hospice care

Home health care

Inpatient care in a religious non-medical health care institution

Medicare coverage is based on 3 main factors

Federal and state laws.

National coverage decisions made by Medicare about whether something is covered.

Local coverage decisions made by companies in each state that process claims for Medicare. These companies decide whether something is medically necessary and should be covered in their area.

You may need something that's usually covered but your provider thinks that Medicare won't cover it in your situation. If so, you'll have to read and sign a notice. The notice says that you may have to pay for the item, service, or supply. Find out if your test, item, or service is covered from Medicare official website here.

Below are some items and services covered by Part A:

Blood

If the hospital gets blood from a blood bank at no charge, you won’t have to pay for it or replace it. If the hospital has to buy blood for you, you must either pay the hospital costs for the first 3 units of blood you get in a calendar year, or you or someone else can donate the blood.

Home health services

Part A and/or Part B covers home health benefits. See Insurance Protection Page

Hospice care

To qualify for hospice care, a hospice doctor and your doctor (if you have one) must certify that you’re terminally ill, meaning you have a life expectancy of 6 months or less. When you agree to hospice care, you’re agreeing to comfort care (palliative care) instead of care to cure your terminal illness. You also must sign a statement choosing hospice care instead of other Medicare-covered treatments for your terminal illness and related conditions. Coverage includes:

All items and services needed for pain relief and symptom management

Medical, nursing, and social services

Drugs for pain management

Durable medical equipment for pain relief and symptom management

Aide and homemaker services

Other covered services you need to manage your pain and other symptoms, as well as spiritual and grief counseling for you and your family.

Medicare-certified hospice care is usually given in your home or other facility where you live, like a nursing home. Original Medicare will still pay for covered benefits for any health problems that aren’t part of your terminal illness and related conditions, but hospice should cover most of your care.

Medicare won’t pay room and board for your care in a facility unless the hospice medical team decides you need short-term inpatient care to manage pain and other symptoms. This care must be in a Medicare-approved facility, like a hospice facility, hospital, or skilled nursing facility that contracts with the hospice.

Medicare also covers inpatient respite care, which is care you get in a Medicare-approved facility so that your usual caregiver (family member or friend) can rest. You can stay up to 5 days each time you get respite care.

After 6 months, you can continue to get hospice care as long as the hospice medical director or hospice doctor recertifies (at a face-to-face meeting) that you’re still terminally ill.

You pay:

Nothing for hospice care.

A copayment of up to $5 per prescription for outpatient drugs for pain and symptom management.

5% of the Medicare-approved amount for inpatient respite care.

Note: Original Medicare will be billed for your hospice care, even if you’re in a Medicare Advantage Plan. When you get hospice care, your Medicare Advantage Plan can still cover services that aren’t a part of your terminal illness or any conditions related to your terminal illness. Contact your plan for more information.

Inpatient hospital care

Medicare covers semi-private rooms, meals, general nursing, drugs (including methadone to treat an opioid use disorder), and other hospital services and supplies as part of your inpatient treatment. This includes care you get in acute care hospitals, critical access hospitals, inpatient rehabilitation facilities, long-term care hospitals, psychiatric care in inpatient psychiatric facilities, and inpatient care for a qualifying clinical research study. This doesn’t include private-duty nursing, a television or phone in your room (if there’s a separate charge for these items), personal care items (razors or slipper socks), or a private room, unless medically necessary.

If you also have Part B, it generally covers 80% of the Medicare-approved amount for doctors’ services you get while you’re in a hospital.

You pay:

A deductible and no coinsurance for days 1–60 of each benefit period.

A coinsurance amount per day for days 61–90 of each benefit period.

A coinsurance amount per “lifetime reserve day” after day 90 of each benefit period (up to 60 days over your lifetime).

All costs for each day after you use all the lifetime reserve days.

You can only get inpatient psychiatric care in a freestanding psychiatric hospital 190 days in a lifetime.

Note: Hospitals are now required to make public the standard charges for all of their items and services (including charges negotiated by Medicare Advantage Plans) to help you make more informed decisions about your care.

Am I an inpatient or outpatient?

Whether you’re an inpatient or an outpatient affects how much you pay for hospital services and if you qualify for Part A skilled nursing facility coverage.

You’re an inpatient when the hospital formally admits you with a doctor’s order.

You’re an outpatient if you’re getting emergency or observation services (which may include an overnight stay in the hospital or services in an outpatient clinic), lab tests, or X-rays, without a formal inpatient admission (even if you spend the night in the hospital).

Each day you have to stay, you or your caregiver should always ask the hospital and/or your doctor, or a hospital social worker or patient advocate, if you’re an inpatient or outpatient.

Sometimes doctors will keep you as an outpatient for observation services while they decide whether to admit you as an inpatient or release (discharge) you. If you’re under observation more than 24 hours, you must get a “Medicare Outpatient Observation Notice” (also called “MOON”). This notice tells you why you’re an outpatient (in a hospital or critical access hospital) getting observation services, and how it affects what you pay in the hospital and for care after you leave.

Religious non-medical health care institution (inpatient care)

If you qualify for inpatient hospital or skilled nursing facility care in these facilities, Medicare will only cover inpatient, non-religious, non-medical items and services like room and board, and items or services that don’t need a doctor’s order or prescription (like unmedicated wound dressings or use of a simple walker). Medicare doesn’t cover the religious portion of this type of care.

Skilled nursing facility care

Medicare covers semi-private rooms, meals, skilled nursing and therapy services, and other medically necessary services and supplies in a skilled nursing facility. Medicare only covers these services after a 3-day minimum (not including the day you leave the hospital), medically necessary, inpatient hospital stay for a related illness or injury. If you’re in a Medicare Advantage Plan, you may not need a 3-day hospital stay. Check with your plan. (Note: You may not need a 3-day minimum inpatient hospital stay if your doctor participates in an Accountable Care Organization or an entity participating in another type of Medicare initiative approved for a Skilled Nursing Facility 3-Day Rule Waiver. )

You may get skilled nursing or therapy care if it’s necessary to improve or maintain your current condition. You can appeal if you disagree with your discharge, like if the discharge is based solely on a lack of improvement, even though you still require skilled nursing or therapy care to keep your condition from getting worse.

To qualify for skilled nursing facility care, your doctor must certify that you need daily skilled care (like intravenous fluids/medications or physical therapy) which, as a practical matter, you can only get as a skilled nursing facility inpatient. Medicare doesn’t cover long-term care.

You pay:

Nothing for the first 20 days of each benefit period. (Note: If you’re in a Medicare Advantage Plan, you may be charged copayments during the first 20 days.)

A coinsurance amount per day for days 21–100 of each benefit period.

All costs for each day after day 100 in a benefit period.

Medicare Part B

Medicare Part B (Medical Insurance) helps cover medically necessary doctor’s services, outpatient care, home health services, durable medical equipment, mental health services, and other medical services. Part B also covers many preventive services.

Medically necessary services: Services or supplies that are needed to diagnose or treat your medical condition and that meet accepted standards of medical practice.
Preventive services: Health care to prevent illness (like the flu) or detect it at an early stage, when treatment is most likely to work best.

20% Coinsurance	Free preventive care
Ambulance services	Abdominal aortic aneurysm screening
Blood	Alcohol misuse screening and counseling
Cardiac rehabilitation	Bone density screening
Chemotherapy	Cardiovascular disease screening and behavior therapy
Chiropractic services	Colorectal cancer screening
Continuous positive airway pressure (CPAP) therapy	Depression screening
Defibrillator	Diabetes screening
Durable medical equipment (DME)	Glaucoma test
Emergency department services	HPV test
Eyeglasses after cataract surgery	HIV and STI screenings
Home health services	Hepatitis B shots and infection screening
Kidney dialysis	Hepatitis C screening
Laboratory services (certain blood tests, urinalysis)	Lung cancer screening
Mental health coverage	Mammogram
Organ transplant (heart, lung, kidney, pancreas, intestine, liver)	Medical nutrition therapy
Physical and occupational therapy	Obesity screening and counseling
Prescription drugs* (limited)	Pelvic exams
Prosthetic and orthotic items	Prostate cancer screening
Pulmonary rehabilitation	Smoking and tobacco cessation counseling
Second surgical opinion	Vaccines (flu shots and pneumococcal shots)
Speech-language pathology services	Wellness visit
X-Rays, MRIs, CT scans, and EKG/ECG screenings
Transitional care management services
Urgent care

Under Original Medicare, if the Part B deductible ($240 in 2024) applies, you must pay all costs (up to the Medicare-approved amount) until you meet the yearly Part B deductible. After you meet your deductible, Medicare begins to pay its share and you typically pay 20% of the Medicare-approved amount of the service (if the doctor or other health care provider accepts assignment). There’s no yearly limit on what you pay out-of-pocket. There may be limits on expenses you pay through supplemental coverage you may have, like Medigap, Medicaid, or employer or union coverage.

Note that Prescription drugs are only covered in certain circumstances, such as part of outpatient treatment. Prescription drugs are covered by most of Medicare Advantage (MAPD) plan and need a separate Prescription Drug Plan (PDP) for Medigap plan.

What’s not covered by Medicare Part A and Part B?

Medicare doesn’t cover everything. If you need certain services Part A or Part B doesn’t cover, you’ll have to pay for them yourself unless:

You have other coverage (including Medicaid) to cover the costs.

You’re in a Medicare Advantage Plan or Medicare Cost Plan that covers these services. Medicare Advantage Plans and Medicare Cost Plans may cover some extra benefits, like fitness programs and vision, hearing, and dental services.

Some of the items and services that Original Medicare doesn’t cover include:

Most dental care
Eye exams (for prescription glasses)
Dentures
Cosmetic surgery
Massage therapy
Routine physical exams
Hearing aids and exams for fitting them
Long-term care
Concierge care (also called concierge medicine, retainer-based medicine, boutique medicine, platinum practice, or direct care)
Covered items or services you get from an opt out doctor or other provider (except in the case of an emergency or urgent need)

The need for Long-Term Care is often overlooked by a lot of people, which may totally ruin their retirement plan. Long-Term Care needs to be planned when you are young and when you are still healthy, otherwise you will be running out of options soon, i.e. Long-Term Care insurance becomes unaffordable.

Long-Term Care (sometimes called “long-term services and supports”) includes non-medical care for people who have a chronic illness or disability. This includes non-skilled personal care assistance, like help with everyday activities, including dressing, bathing and using the bathroom. Non-medical care also includes home-delivered meals, adult day health care, and other services. Medicare and most health insurance, including Medicare Supplement Insurance (Medigap), don’t pay for this type of care. You may be eligible for this care through Medicaid, or you can choose to buy private long-term care insurance.

You can get long-term care at home, in the community, in an assisted living facility, or in a nursing home. It’s important to start planning for long-term care now to maintain your independence and to make sure you get the care you may need, in the setting you want, now and in the future.

What Covered by Medicare

Who is Covered by Medicare

Residents of the U.S., including citizens and permanent residents, are eligible for premium-free Medicare Part A if they have worked at least 40 quarters (10 years) in jobs where they or their spouses paid Medicare payroll taxes and are at least 65 years old. If the qualified work history is less than 10 years, there will be a premium for Part A.

Legal immigrants who are age 65 or older who do not have this work history can purchase Medicare Part A after residing legally in the U.S. for five years continuously.

Legal immigrants (non-citizen permanent residents) under age 65 with disabilities may also qualify for Medicare, but typically first must meet the same eligibility requirements for SSDI (disability benefits) that apply to citizens, which are based on work history, paying Social Security taxes on income, and having enough years of Social Security taxes accumulated to equal between 20 and 40 work credits (5-10 years).

New immigrants are not eligible for Medicare regardless of their age. Once immigrants meet the residency requirements, eligibility and enrollment works the same as it does for others.

Who Covered by Medicare

Medicare Enrollment

Medicare Cost & Billing

Medicare Enrollment and Late Penalty

You can only enroll in Part B (and/or Part A if you have to buy it) during certain enrollment periods. Note that the enrollment window is different between Medicare and regular medical insurance. The enrollment windows and rules are also different for Medicare Advantage plans and Medigap plans. The Prescription Drugs plan may have different enrollment rules and timelines. Please refer to the later sections for details. The following is referred to Medicare Part A and Part B enrollment periods.

Initial Enrollment Period (IEP)

You can first sign up for Part A and/or Part B during the 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.

If you enroll in Part A and/or Part B during the first 3 months of your Initial Enrollment Period, in most cases, your coverage begins the first day of your birthday month. However, if your birthday is on the first day of the month, your coverage will start the first day of the prior month.

If you enroll in and are paying for Part A and/or Part B the month you turn 65 or during the last 3 months of your Initial Enrollment Period, the start date for your Part B coverage will be delayed.

Special Enrollment Period (SEP)

After your Initial Enrollment Period is over, you may have a chance to enroll in Medicare during a Special Enrollment Period. If you didn’t sign up for Part B (or Part A if you have to buy it) when you were first eligible because you have group health plan coverage based on current employment (your
own, a spouse’s, or a family member’s—if you have a disability), you can enroll in Part A and/or Part B:

Anytime you’re still covered by the group health plan
During the 8-month period that begins the month after the employment ends or the coverage ends, whichever happens first

Usually, you don’t pay a late enrollment penalty if you sign up during a Special Enrollment Period. This period doesn’t apply if you’re eligible for Medicare based on End-Stage Renal Disease (ESRD), or you’re still in your Initial Enrollment Period.

If you have a disability, and the group health plan coverage is based on a family member’s current employment (other than a spouse), the employer offering the group health plan must have 100 or more employees for you to qualify a Special Enrollment Period.

COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage, retiree health plans, VA coverage, and individual health insurance coverage (like coverage through the Health Insurance Marketplace) aren’t considered coverage based on current employment. There may be reasons why you should take Part B instead of, or in addition to, COBRA coverage. You aren’t eligible for a Special Enrollment Period to sign up for Medicare when that COBRA coverage ends. To avoid paying a higher premium, make sure you enroll in Medicare when you’re first eligible. Your current coverage may not pay for health services you get if you don’t have both Part A and Part B.

General Enrollment Period (GEP)

If you have to pay for Part A but don’t sign up for it and/or don’t sign up for Part B (for which you must pay premiums) during your Initial Enrollment Period, and you don’t qualify for a Special Enrollment Period, you can sign up during the General Enrollment Period between January 1–March 31 each year. Your coverage won’t start until July 1 of that year, and you may have to pay a higher Part A and/or Part B premium for late enrollment.

Late enrollment penalty – Part A

If you aren’t eligible for premium-free Part A, and you don’t buy it when you’re first eligible, your monthly premium may go up 10%. You’ll have to pay the higher premium for twice the number of years you could have had Part A but didn’t enroll.

Example: If you were eligible for Part A for 2 years but didn’t enroll, you’ll have to pay a 10% higher premium for 4 years.

Late enrollment penalty – Part B

If you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty for as long as you have Part B. Your monthly Part B premium may go up 10% for each full 12 months in the period that you could’ve had Part B, but didn’t enroll. If you’re allowed to sign up for Part B during a Special Enrollment Period, you usually don’t pay a late enrollment penalty.

Example: Mr. Mehdi's Initial Enrollment Period ended December 2019. He waited to enroll in Part B until March 2022 during the General Enrollment Period. His coverage begins July 1, 2022. His Part B premium penalty is 20%, and he’ll have to pay this penalty for as long as he has Part B. (Even though Mr. Mehdi wasn’t covered a total of 27 months, this included only 2 full 12-month periods.)

Medicare Cost and Billing

Medicare Part A Premiums (as of 2023 & 2024)

You can get premium-free Part A at 65 if:

You already get retirement benefits from Social Security or the Railroad Retirement Board.
You're eligible to get Social Security or Railroad benefits but haven't filed for them yet.
You or your spouse had Medicare-covered government employment.

If you're under 65, you can get premium-free Part A if:

You got Social Security or Railroad Retirement Board disability benefits for 24 months.
You have End-Stage Renal Disease (Esrd) and meet certain requirements.

If you don't qualify for premium-free Part A, you can buy Part A.

People who buy Part A will pay a premium of either $278 or $506 each month in 2023 (either $278 or $505 each month in 2024) .

If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $505 in 2024 or $506 in 2023. If you paid Medicare taxes for 30-39 quarters, the premium is $278.

If you choose NOT to buy Part A, you can still buy Part B.

In most cases, if you choose to buy Part A, you must also:

Have Medicare Part B (Medical Insurance)
Pay monthly premiums for both Part A and Part B

Medicare Part A deductible and coinsurance (as of 2023 & 2024)

You pay: $1,600 deductible for each benefit period for 2023, $1,632 for 2024
Days 1-60: $0 coinsurance for each benefit period
Days 61-90: $400 coinsurance per day of each benefit period for 2023, $408 for 2024
Days 91 and beyond: $800 coinsurance per each "lifetime reserve day" after day 90 for each benefit period (up to 60 days over your lifetime) for 2023, $816 for 2024
Beyond lifetime reserve days: all costs
Skilled Nursing Facility Coinsurance: $200 per day (day 21 - 100) for 2023, $204 for 2024

Medicare Part B Premiums (as of 2023 & 2024)

You pay a premium each month for Part B. Your Part B premium will be automatically deducted from your benefit payment if you get benefits from one of these:

Social Security
Railroad Retirement Board
Office of Personnel Management

If you don’t get these benefit payments, you’ll get a bill.

Most people will pay the standard premium amount. If your modified adjusted gross income is above a certain amount, you may pay an Income Related Monthly Adjustment Amount (IRMAA). Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago. This is the most recent tax return information provided to Social Security by the IRS.

The standard Part B premium amount is $164.90 in 2023, $174.70 in 2024 per month.

You pay $226 for your Part B deductible for 2023, $240 for 2024. After you meet your deductible for the year, you typically pay 20% of the Medicare-Approved Amount for these:

Most doctor services (including most doctor services while you're a hospital inpatient)
Outpatient therapy
Durable Medical Equipment (DME)

The latest Medicare Parts A & B Premiums and Deductibles, Medicare Part D Income-Related Monthly Adjustment Amounts (IRMAA) can be found in CMS website

2023 and 2024

How to Pay Medicare Premiums?

Most people don't get a premium bill from Medicare because they get their Medicare Part B (Medical Insurance) premium deducted automatically from their Social Security benefit payment (or Railroad Retirement Board benefit payment). If you don't get benefits from Social Security (or the Railroad Retirement Board), you'll get a premium bill from Medicare.

If you pay for	You will get a bill
Part B only	Every 3 months
Part A (Hospital Insurance)	Every month
Part D income-related monthly adjustment amount (Part D IRMAA)	Every month

If you miss a payment, or if your payment is late, your next bill will also include a past due amount. If you get a Medicare premium bill that says “Delinquent Bill” at the top, pay the total amount due, or you’ll lose your Medicare coverage.

Midecar Financial Aid

Medicare Financial Aid

MSP	QMB	SLMB	QI	QDWI
Income limit: individual	$1,235	$1,478	$1,660	$4,945
Income limit: married couple	$1,663	$1,992	$2,239	$6,659
Resource limit: individual	$9,090	$9,090	$9,090	$4,000
Resource limit: married couple	$13,630	$13,630	$13,630	$6,000
What it helps pay	Part A & B costs	Part B premiums	Part B premiums	Part A premiums

Medicare Extra Help Program

Medicare Saving Programs can help pay the out-of-pocket expenses associated with Medicare Part A and Medicare Part B. They do not cover prescription drug costs. However, Medicare recipients who qualify for an MSP (QMB, SLMB, or QI program) are also automatically eligible for Medicare Extra Help, which helps pay for a Medicare Part D prescription drug plan. Extra Help eliminates your premiums and deductibles. It also reduces your copays for generic and brand-name medications.

Medicare Savings Programs (MSP)

A Medicare Savings Program can help pay for premiums, deductibles, copays and coinsurance for Medicare Parts A and B. These programs don't work in tandem with Medicare Part C. Eligibility for a Medicare Savings program is largely dictated by income and assets. Specific requirements can vary by state and you must apply through your state's Medicaid office to see if you qualify for one of the four available programs.

There are four types of Medicare Savings Programs. The following three are available only if you have Medicare and are at least 65 years old:

The Qualified Medicare Beneficiary (QMB) Program helps pay for Medicare Part A premiums and Medicare Part B premiums, deductibles, coinsurance, and copays. It’s possible to qualify for the QMB program and other Medicaid programs.
The Specified Low-Income Medicare Beneficiary (SLMB) Program helps pay for Medicare Part B premiums only. You must already have Medicare Part A to qualify. You can take part in the SLMB program and other Medicaid programs at the same time. Some states may refer to this as the SLIMB program.
The Qualifying Individual (QI) Program helps pay for Medicare Part B premiums only. It’s granted on a first-come, first-served basis, with priority given to people who qualified the previous year. If you qualify for the QI program, you cannot qualify for other Medicaid programs.

Another MSP is available to workers who have a disability and are under age 65:

The Qualified Disabled and Working Individuals (QDWI) Program helps workers who have a disability to pay Medicare Part A premiums. It’s only available to those who lost Part A coverage because they returned to work.

The chart below provides the general Medicare Savings Program monthly income limits for 2023. Requirements in some states (e.g. Hawaii, Alaska) may vary slightly. Check the Midecare.gov website out for the latest updated limits. These limits go up each year.

Medicare Plan Options

There are two ways, Original Medicare (Part A & B) or Medicare Advantage (Part C) to get Medicare. The following are three common options:

Original Medicare - you pay the standard Medicare Part A premiums and Medicare Part B premiums. Beneficiaries can also purchase a Medicare Stand-alone Prescription Drug Plan (PDP) from private insurance companies if they need Prescription drug coverage.
Medicare Advantage Plan - Most Medicare Advantage plans provide coverage for Medicare Part A, B and D. A lot of them also provide some extra benefits, such as Vision, Hearing, Dental, etc. These plans become more and more popular in the recent days.
Original Medicare with Medigap - Medigap (Medicare Supplement) plan is to cover the cost sharing portion of the original Medicare. Beneficiaries can also purchase a Medicare Stand-alone Prescription Drug Plan (PDP) from private insurance companies if they need Prescription drug coverage.

However, there are many choices and plan types with each option. The prescription drugs coverage is quite complicate too as each PDP may cover a list of different drugs. There are a lot of rules applied if you want to switch between these options in the future. It is highly recommended that you work with an agent to explore these options. It becomes convoluted quickly if you are new to Medicare.

Medicare supplemental insurance (Medigap Plans) is related by a lesser-known Part E of Medicare law, which regulates other miscellaneous programs including:

Medicare cost plans (which also cover Part A and Part B benefits). Medicare cost plans are only offered in a limited number of states and are most frequently found in rural areas.
The program for all-inclusive care for the elderly (PACE).

Depending on where you live, these plans may or may not be available in your area.

If you are eligible for Medicaid benefits, the Medicare-Medicaid Plans may be another option if they are available in your area.

Important to note that it is prohibited by law and regulation that the beneficiaries enroll in both Medigap and Medicare Advantage Plan at the same time.

Medicare Plan Options

Medicare Advantage Plan

What is Medicare Advantage plan and Why?

Medicare Advantage (MA), known as Medicare Part C, is an alternative to traditional Medicare Part A and Part B (the Original Medicare). Medicare Advantage Plans are approved by Medicare, but are run by private companies. The Coordinated Care Plans, such as Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs), are the most common MA Plans in the market, but there are many other types of MA plan, such as Private Fee-For-Service (PFFS) Plans, Medical Savings Account (MSA, similar to HSA) Plans, Special Needs Plans (SNP), Employer Group Waiver Plans, etc.

Some important characteristics for MA plan:

Coverage - Medicare Advantage is usually an “all in one” plan bundling Part A, Part B and Part D. Most Advantage plans offer extra benefits Original Medicare doesn’t cover, such as fitness programs (like gym memberships or discounts), Vision, Hearing, Dental services, transportation to doctor visit, over-the-counter drugs and more. These extra benefits come with no additional cost or minimal additional cost – that’s why these Medicare Advantage plans becomes more and more popular in the marketplace.
Cost - Recall that the Original Medicare doesn’t have a cap for your out-of-pocket costs (for example your 20% coinsurance), whereas most of the Medicare Advantage plans have a maximum out-of-pocket limit and may have lower out-of-pocket costs than Original Medicare.
Network – many low-cost Medicare Advantage plans require patients to use doctors and other providers who are in the plan’s network. You may need referral to see a specialist. Make sure your primary doctors are in the network that the plan covers before you sign up.

Medicare Advantage Plan's Network

Almost all the MA Plans have a Network. A bigger network generally means higher premium. Providers can join or leave a plan’s provider network any time during the year. Your plan can also change the providers in the network any time during the year. If this happens, you usually won’t be able to change plans but you can choose a new provider. You generally can’t change plans during the year.

Even though the network of providers may change during the year, the plan must still give you access to qualified doctors and specialists. Your plan will make a good faith effort to give you at least 30 days’ notice that your provider is leaving your plan so you have time to choose a new provider. Your plan will also help you choose a new provider to continue managing your health care needs.

Medicare Advantage Plan Enrollment Overview

To enroll into a MA Plan, the beneficiaries must have both Medicare Part A and Part B. If you have other medical insurance, make sure to talk to your employer, union, or other benefits administrator about their rules before you join a Medicare Advantage Plan. In some cases, joining a Medicare Advantage Plan might cause you to lose your employer or union coverage for yourself, your spouse, and dependents and you may not be able to get it back. In other cases, if you join a Medicare advantage Plan, you may still be able to use your employer or union coverage along with the Medicare Advantage Plan you join. Your employer or union may also offer a Medicare Advantage retiree health plan that they sponsor. You can only be in one Medicare Advantage Plan at a time.

Each year, you have the option to keep your current plan, choose a different plan, or switch to Original Medicare. Each year, Medicare Advantage Plans can choose to leave Medicare or make changes in coverage, costs, service area, and more. If you’re in a Medicare Advantage Plan, review the “Annual Notice of Change” and “Evidence of Coverage” from your plan each year.

Certain enrollment periods have fixed calendar dates and are available to all beneficiaries while others depend on an individual’s circumstances. Recall that there are Initial Enrollment Period, General Enrollment Period and Special Enrollment Period for Medicare Part A and Part B enrollment. Medicare Advantage plan has two Open Enrollment Period windows - one runs from October 15 to December 7, and another one runs from January 1 to March 31 in the following year. To avoid confusion, these two enrollment windows are sometimes referred to AEP and OEP. You may have noticed that the MA-OEP is the same as Medicare GEP.

Fixed annual enrollment/disenrollment periods for Medicare Advantage plan:

AEP - Annual election period (October 15 – December 7)
OEP - Medicare Advantage Open Enrollment Period (MA-OEP) (January 1 – March 31)

Enrollment periods with dates and conditions based on individual circumstances:

IEP - Initial enrollment/election periods when a beneficiary is first eligible for Medicare
- New beneficiaries who enroll in Medicare Advantage also have an MA-OEP that starts the month of entitlement to Part A and Part B
SEP - Special election periods when special circumstances arise
OEPI - Continuous open enrollment for institutionalized individuals (OEPI)

Table below is a brief summary of these enrollment periods:

Initial Enrollment Period

When you first become eligible for Medicare

If you enrolled in a Medicare Advantage Plan during your Initial Enrollment Period, you can change to another Medicare Advantage Plan (with or without drug coverage) or go back to Original Medicare (with or without a separate Medicare drug plan) within the first 3 months you have Medicare.

Medicare General Enrollment Period

January 1 to March 31

If you have Part A coverage and you get Part B for the first time during this period, you can also join a Medicare Advantage Plan. Your coverage will start July 1. Remember, you must have Part A and Part B to join a Medicare Advantage Plan.

Medicare Advantage Annul Election Period

October 15 to December 7

You can join, switch, or drop a Medicare Advantage Plan during the AEP each year. Your coverage will begin on January 1 (as long as the plan gets your request by December 7). If you join a Medicare Advantage Plan during this period but change your mind,
you can switch back to Original Medicare or change to a different Medicare Advantage Plan (depending on which coverage works better for you) during the Medicare Advantage Open Enrollment Period (January 1 – March 31).

Medicare Advantage Open Enrollment Period

January 1 to March 31

If you’re in a Medicare Advantage Plan (with or without drug coverage), during this period you can:

Switch to another Medicare Advantage Plan (with or without drug coverage).
Drop your Medicare Advantage Plan and return to Original Medicare. You’ll also be able to join a separate Medicare drug plan.

During this period, you can’t:

Switch from Original Medicare to a Medicare Advantage Plan.
Join a separate Medicare drug plan if you’re in Original Medicare.
Switch from one Medicare drug plan to another if you’re in Original Medicare.

You can only make one change during this period, and any changes you make will be effective the first of the month after the plan gets your request. If you’re returning to Original Medicare and joining a separate Medicare drug plan, you don’t need to contact your Medicare Advantage Plan to disenroll. The disenrollment will happen automatically when you join the drug plan.

Special Enrollment Period

Qualifying Life Event

In most cases, if you’re enrolled in a Medicare Advantage Plan, you must stay enrolled for the calendar year starting the date your coverage begins. However, in certain situations, like if you move or you lose other insurance coverage, you may be able to join, switch, or drop a Medicare Advantage Plan during a Special Enrollment Period. Visit Medicare.gov or check with your plan for more information.

5-star Special Enrollment Period

December 8 to November 30

Note: You can use this SEP only once during this period.

Medicare uses star ratings from 1–5 to help you compare plans based on quality and performance.

If a Medicare Advantage Plan, Medicare drug plan, or Medicare Cost Plan with a 5-star rating is available in your area, you can use the 5-star Special Enrollment Period to switch from your current Medicare plan to a Medicare plan with a “5-star” quality rating.

Visit Medicare.gov for more information.

Reminder: after you enroll to a Medicare Advantage plan, you must use the card from your Medicare Advantage Plan to get your Medicare-covered services. Keep your red, white, and blue Medicare card in a safe place because you’ll need it if you ever switch back to Original Medicare. If you join a Medicare Advantage Plan, you’ll still have Medicare but you’ll get most of your Part A and Part B coverage from your Medicare Advantage Plan, not Original Medicare.

What do I pay for Medicare Advantage plan?

Your out-of-pocket costs in a Medicare Advantage Plan depend on:

Whether the plan charges a monthly premium. Many Medicare Advantage Plans have a $0 premium. If you enroll in a plan that does charge a premium, you pay this in addition to the Part B premium (and the Part A premium if you don’t have premium-free Part A).
Whether the plan pays any of your monthly Part B premiums. Some Medicare Advantage Plans will help pay all or part of your Part B premium. This is sometimes called a “Medicare Part B premium reduction.”
Whether the plan has a yearly deductible or any additional deductibles for certain services.
How much you pay for each visit or service (copayments or coinsurance). Medicare Advantage Plans can’t charge more than Original Medicare for certain services, like chemotherapy, dialysis, and skilled nursing facility care.
The type of health care services you need and how often you get them.
Whether you get services from a network provider or a provider that doesn’t contract with the plan. If you go to a doctor, other health care provider, facility, or supplier that doesn’t belong to the plan’s network for non-emergency or non-urgent care services, your plan may not cover your services, or your costs could be higher. In most cases, this applies to Medicare Advantage Plans, Health Maintenance Organizations, and Preferred Provider Organizations. It also applies to Private Fee-for-Service Plans that have a contracted network of providers.
Whether you go to a doctor or supplier who accepts assignment (if you’re in a Preferred Provider Organization or Private Fee-for-Service plan, or Medical Savings Account plan and you go out of network). Whether the plan offers extra benefits (in addition to Original Medicare benefits) and if you need to pay extra to get them.
The plan’s yearly limit on your out of pocket costs for all Part A and Part B medical services. Once you reach this limit, you’ll pay nothing for Part A and Part B covered services.
Whether you have Medicaid or get help from your state through a Medicare Savings Program.

Medicare Advantage Plan

Cost Plan and PACE Plan

Cost Plan & PACE Plan

While Medicare Advantage is the most popular Medicare plan, some other plans and programs may be offered in your area. Some provide both Hospital (Part A) and Medical (Part B) coverage, while others provide only Part B coverage. Some also provide drug coverage. They have some of the same rules as Medicare Advantage Plans. However, each has special rules and exceptions, so you should contact any plans you’re interested in to get more details.

Cost Plans

Cost Plans are a type of Medicare health plan available in certain, limited areas of the country.

In general, you can join even if you only have Part B.
If you have Part A and Part B and go to a non-network provider, Original Medicare covers the services. You’ll pay the Part A and Part B coinsurance and deductibles.
You can join any time the Cost Plan is accepting new members.
You can leave any time and return to Original Medicare.
You can join a separate Medicare drug plan or you can get drug coverage from the Cost Plan (if offered). Even if the Cost Plan offers drug coverage, you can choose to get drug coverage from a separate Medicare drug plan. Note: You can add or drop drug coverage only at certain times.

Program of All-inclusive Care for the Elderly (PACE)

PACE is a Medicare and Medicaid program offered in many states that allows people who otherwise need a nursing home-level of care to remain in the community, like a home, apartment, or other appropriate setting. To qualify for PACE, you must meet these conditions:

You’re 55 or older.
You live in the service area of a PACE organization.
You’re certified by your state as needing a nursing home-level of care.
At the time you join, you’re able to live safely in the community with the help of PACE services.

PACE covers all Medicare- and Medicaid-covered care and services, and other services that the PACE team of health care professionals decides are necessary to improve and maintain your health. This includes drugs, as well as any other medically necessary care, like doctor or health care provider visits, transportation, home care, hospital visits, and even nursing home stays when necessary.

If you have Medicaid, you won’t have to pay a monthly premium for the long-term care portion of the PACE benefit. If you have Medicare but not Medicaid, you’ll be charged a monthly premium to cover the long-term care portion of the PACE benefit and a premium for Medicare drug coverage (Part D). However, in PACE, there’s never a deductible or copayment for any drug, service, or care approved by the PACE team of health care professionals.

Medigap

Medicare Supplement Insurance (also known as Medigap) provides coverage for gaps in medical costs not covered by Original Medicare. To purchase Medicare Supplement Insurance you must be enrolled in Medicare Part A and Part B. Medigap insurance doesn't typically offer any additional medical benefits. Instead, it picks up the out-of-pocket cost benefits associated with Medicare. Some Medigap plans do provide coverage for medical care outside the U.S. where original Medicare doesn't cover. Generally, Medigap doesn’t cover long-term care (like care in a nursing home), vision or dental services, hearing aids, eyeglasses, or private-duty nursing.

Medicare Supplement plans are standardized and offer various benefits to help offset your healthcare cost. These plans are labeled Medigap Plan A, B, C, D, F, G, K, L, M and N – please see the chart below for their benefits. Note that Massachusetts, Minnesota and Wisconsin have different standards.

Medigap Benefits	A	B	C	D	F *	G *	K	L	M	N
Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%
Part B coinsurance or copayment	100%	100%	100%	100%	100%	100%	50%	100%	100%	100% ***
Blood (first 3 pints)	100%	100%	100%	100%	100%	100%	50%	75%	100%	100%
Part A hospice care coinsurance or copayment	100%	100%	100%	100%	100%	100%	50%	75%	100%	100%
Skilled nursing facility care coinsurance			100%	100%	100%	100%	50%	75%	100%	100%
Part A deductible ($1,600 in 2023)		100%	100%	100%	100%	100%	50%	75%	50%	100%
Part B deductible ($226 in 2023)			100%		100%
Part B excess charge					100%	100%
Foreign travel exchange (lifetime limit $50,000)			80%	80%	80%	80%			80%	80%
Out-of-pocket limit**	N/A	N/A	N/A	N/A	N/A	N/A	$6,940 in 2023	$3,470 in 2023	N/A	N/A

* Plans F and G also offer a high-deductible plan in some states. With this option, you must pay for Medicare-covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,700 in 2023 ($2,490 in 2022) before your policy pays anything. (You can’t buy Plans C and F if you were new to Medicare on or after January 1, 2020.). One tradeoff for the high deductible is a lower monthly premium. The average premium for a standard Plan F in 2022 is $173 per month, while the average premium for high-deductible Plan F was just $73 per month.

** For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible $226 in 2023 ($233 in 2022), the Medigap plan pays 100% of covered services for the rest of the calendar year.

*** Plan N pays 100% of the Part B coinsurance. You must pay a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission.

Note: Medigap plans sold to people who are new to Medicare on or after January 1, 2020 aren’t allowed to cover the Part B deductible. Because of this, Plans C and F are no longer available to people new to Medicare on or after January 1, 2020.

Medigap Plan F used to be the most popular plan. However, as Plan F is no long available for people who are eligible for Medicare after 2020, Plan G becomes the most popular plan in the recent years. The difference between Plan F and Plan G is the coverage of Medicare Part B deductible, which is $226 per year ($18.83 / month) for 2023. So if the Plan G costs $18.83 less than the Plan F per month, it might be a better value than Plan F.

The average premium in 2022 is $173 per month for Plan F, $133 per month for Plan G. You may quickly figure out that based on the above simple math, Plan G may be a better value than Plan F even though Part B deductible is not covered in Plan G.

Things you should know about Medigap

Before you can buy Medicare Supplement Insurance (Medigap), you must have Part A and Part B.
You pay the private insurance company a monthly premium for Medigap in addition to the monthly Part B premium you pay to Medicare. Also, if you buy Medigap and a separate Medicare drug plan from the same company, you may need to make 2 separate premium payments. Contact the company to find out how to pay your premiums.
A Medigap policy only covers one person. Spouses must buy separate coverage.
You can’t have drug coverage in both Medigap and your Medicare drug plan.
It’s important to compare Medigap policies since the costs can vary between policies for exactly the same coverage, and may go up as you get older. Some states limit Medigap premium costs.
In some states, you may be able to buy another type of Medigap policy called Medicare SELECT. Medicare SELECT is a type of Medigap policy sold in some states that requires you to use hospitals and, in some cases, doctors within its network to be eligible for full insurance benefits (except in an emergency). If you buy Medicare SELECT, you have rights to change your mind within 12 months and switch to standard Medigap.

Medicap Enrollment

The Medigap enrollment period is not the same as Medicare open enrollment period. It is one period per lifetime unless there are special circumstances (SEP). The best time to buy a Medigap policy is during your 6-month Medigap Open Enrollment Period that starts the first day of the month you're 65 or older and signed up for Part B. You generally will get better prices and more choices among policies. During that time you can buy any Medigap policy sold in your state, even if you have health problems. This period automatically starts the first month you have Medicare Part B (Medical Insurance) and you're 65 or older. It can't be changed or repeated. After this enrollment period, you may not be able to buy a Medigap policy. If you're able to buy one, it may cost more due to past or present health problems.

In most cases, you won't have a right under federal law to switch Medigap policies, unless one of these applies:

You're eligible under a specific circumstance or guaranteed issue rights
You're within your 6-month Medigap open enrollment period

You don't have to wait a certain length of time after buying your first Medigap policy before you can switch to a different Medigap policy.

When you are switching Medigap plans, there is a 30-day Free Look Period for Medicap insurance policy. You can keep both policies for 30 days (pay both premium), but you will need to cancel one of the policies before the free look period ends once you decide which one you want to keep.

When you are moving out of state, you don't have to change your Medigap insurance plan. You can keep your current Medigap policy no matter where you live as long as you still have Original Medicare.

Medigap is an insurance policy offered by the private insurance companies, so it must follow some underwriting process. You are not freely to choose between Medigap and Medicare Advantage plans outside of the 6-month Medigap Open Enrollment window. In some states, such as California and Oregon, you can switch between Medigap plans in your birthday month, but in most of the states, the insurance companies have their own policy on how the switch works. People in Maine, Massachusetts, Connecticut and New York have ongoing access to Medigap plans.

If you are planning to change from an Advantage plan to a Medigap plan, you need to apply as early as possible. You want to be sure the Medigap plan accepts your application before you cancel your Advantage plan. Never cancel a policy over a quote. It's best to wait until you have the final policy in your hands before you cancel current coverage.

Medigap Guaranteed Renewable and Issue Rights

In most cases, your Medigap insurance company can't drop you because the Medigap policy is a

guaranteed renewable policy. This means your insurance company can't drop you unless one of these happens:

You stop paying your premiums
You weren't truthful on the Medigap policy application
The insurance company becomes bankrupt or insolvent

If you bought your Medigap policy before 1992, it might not be guaranteed renewable. This means the Medigap insurance company can refuse to renew the Medigap policy. But, the insurance company must get the state's approval to cancel your Medigap policy. If this happens, you have the right to buy another Medigap policy.

Guaranteed Issue Rights (Also Called "Medigap Protections") are rights you have in certain situations when insurance companies must offer you certain Medigap policies. In these situations, an insurance company:

Must sell you a Medigap policy
Must cover all your pre-existing health conditions
Can't charge you more for a Medigap policy because of past or present health problems

In most cases, you have a guaranteed issue right when you have other health coverage that changes in some way, like when you lose the other health coverage. In other cases, you have a "trial right" to try a Medicare Advantage Plan (Part C) and still buy a Medigap policy if you change your mind.

You have a guaranteed issue right (which means an insurance company can’t refuse to sell you a Medigap policy) in these situations:

You are in a Medicare Advantage Plan, and your plan is leaving Medicare or stops giving care in your area, or you move out of the plan's service area. You can/must apply for a Medigap policy as early as 60 days before the coverage end date, or no later than 63 calendar days after your coverage ends.
You have Original Medicare and an employer group health plan (including retiree or COBRA coverage) or union coverage that pays after Medicare pays and that plan is ending.
You have Original Medicare and a Medicare SELECT policy. You move out of the Medicare SELECT policy's service area.
You joined a Medicare Advantage Plan or Program of All-inclusive Care for the Elderly (PACE) when you were first eligible for Medicare Part A at 65, and within the first year of joining, you decide you want to switch to Original Medicare. (Trial Right)
You dropped a Medigap policy to join a Medicare Advantage Plan (or to switch to a Medicare SELECT policy) for the first time, you've been in the plan less than a year, and you want to switch back. (Trial Right)
Your Medigap insurance company goes bankrupt and you lose your coverage, or your Medigap policy coverage otherwise ends through no fault of your own.
You leave a Medicare Advantage Plan or drop a Medigap policy because the company hasn't followed the rules, or it misled you.

When you lose your health coverage, you may have a guaranteed issue right to buy a Medigap policy. Make sure you keep these items:

A copy of any letters, notices, emails, and/or claim denials that have your name on them as proof of your coverage being terminated
The postmarked envelope these papers come in as proof of when it was mailed

You may need to send a copy of some or all of these papers with your Medigap application to prove you have a guaranteed issue right.

Medigap premium pricing vs. age

It is smart to buy your Medigap policy during your open enrollment period or when you have the guaranteed issue right because your premium cannot vary based on your health status at those times. But will Medigap premium go up every year? The short answer is yes. As a private insurance policy, there are three main factors affecting Medigap premium: Inflation, Health care costs, and the insured age and health condition.

Three pricing methods define if and how your Medigap monthly premiums will increase as you age. The pricing structure may vary from states and different insurance companies.

Attained-age pricing
Community-rated pricing
Issue-age pricing

Attained-age pricing bases the premium on your current age. If you have an attained-age pricing plan, your premium will increase each year.

Community-rated pricing doesn't let your age affect your premiums. Premiums can increase based on inflation and other factors such as tobacco use. If you have a community-rate pricing plan, you would be quoted the same rate as those both younger and older than you.

Issue-age pricing bases the premium on how old you are when you buy the policy. The premium does not increase based on your age, but it can increase for other reasons.

You should consider the Medigap premium cost in a long run, e.g. not only the premium at issue but also the premium when aging. Majority of the Medigap plans in California are Attained-age rated.

Medigap

Medicare Advantage vs. Medigap

Generally speaking, Medigap provides more comprehensive cost benefits and Medicare Advantage plan provides more coverage (bundled coverage). Medigap has no prescription drug coverage, and it generally doesn’t include vision or dental care, whereas Medicare Advantage plans normally bundle all these coverage together in one plan. In terms of pricing, Medicare Advantage plans are more cost effective for insurance premium, but Medigap plans give you a better “peace of mind” – you don’t have to worry about your out-of-pocket medical cost anymore. Based on some statistics, out of all people who are qualified for Medicare benefits:

Original Medicare + Medigap (or Medicaid or employer-sponsored health insurance) – 48%
Medicare Advantage – 42%
Original Medicare – 10%

And most of Medicare beneficiaries pay for a stand-alone Medicare Part D prescription drug policy if it is not covered by the Medicare plans.

Original Medicare or Medigap allows you to use any U.S. doctor or hospital that accepts Medicare, and most do. 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.

An advantage 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. With traditional Medicare, you don’t need a referral to see a specialist or a prior authorization for procedures, but you’ll need to make sure care is coordinated and your doctors are in communication with one another. Often this is best done by developing a relationship with a primary care physician and letting them refer you to specialists.

It’s logical to consider enjoying the cost savings of a Medicare Advantage plan while you’re relatively healthy, and then switching back to original Medicare if you develop a condition you want to be treated at an out-of-network facility. In fact, switching between the two forms of Medicare (or between Medicare Advantage plans) is an option for everyone during the Annual Election Period that runs from October 15 to December 7 each year.

However, if you switch back to original 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 enrollment period – 6 months), 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. Again, don’t drop your current policy before the new policy is in place.

In short, think about the following when you decide Medicare Advantage or Medigap:

Cost - Medicare Advantage is likely more cost effective, or a better value.
Network - almost all Medicare Advantage plans have a network. Medigap will be more flexible in choosing medical provider.
Pre-authorization - some services are required pre-authorization for Medicare Advantage plans.
Risk of Switching plans - switching from a MA Plan to Medigap, underwriting process is a risk.
Coordinated Care - Seems a Cons for MA Plan but it depends. It is a trade-off of options and convenience.

Advantage vs Medigap

Medicare vs. Medicaid

Both Medicare and Medicaid are government-sponsored health insurance programs, but there are different eligibility requirements for each program. While Medicare is meant for those ages 65 and older and younger people with certain health conditions, Medicaid is a joint federal and state program that provides healthcare coverage to people with low incomes. To qualify for Medicaid, recipients are required by their state to have a limited amount of liquid assets.

Anyone with Medicaid coverage is eligible to receive services such as doctor and nursing services, X-rays, hospitalization, home healthcare, and lab and X-ray services. Also, some states may extend patients’ prescription drug coverage, physical therapy, dental services, and medical transportation.

If you have both Medicare and Medicaid (dual-eligibility), Medicare serves as your primary form of coverage. Medicaid only pays for health care services or supplies after Medicare, employer group health plans, and/or Medicare Supplement (Medigap) Insurance have been exhausted. One example is if you are over 65 and your income and asset meet the requirement of Medicare Saving Programs.

If you are not eligible for Medicare and looking for medical insurance, contact Medicaid, Healthcare.gov, or our agent to see what options from Medicaid are available in your area.

Medicare vs. Medicaid

Vittoria Insurance

Health Insurance

Basic Terms

Premium

Deductible

Co-payment

Coinsurance

Exclusions

Coverage limits

Out-of-pocket maximum

Capitation

In-Network Provider

Out-of-Network Provider

Prior Authorization

Formulary

Explanation of Benefits

Who are you shopping for?

Types of Health Insurance

Common Medical Plans

Exclusive Provider Organization (EPO):

Health Maintenance Organization (HMO):

Point of Service (POS):

Preferred Provider Organization (PPO):

Health Saving Account (HSA):

Health Reimbursement Arrangement (HRA):

Fee-For-Service (FFS):

Medical Plans' Costs and Tiers

Where to buy medical insurance?

On-exchange private health insurance

Off-exchange private health insurance

Employer-provided health insurance

Open Enrollment

Medicare - Prescription Drugs Coverage

Madicare

What is Covered by Medicare

Who is Covered by Medicare

Medicare Enrollment and Late Penalty

Medicare Cost and Billing

The latest Medicare Parts A & B Premiums and Deductibles, Medicare Part D Income-Related Monthly Adjustment Amounts (IRMAA) can be found in CMS website

2023 and 2024

Medicare Financial Aid

Medicare Plan Options

Medicare Advantage Plan

Cost Plan and PACE Plan

Medigap

Medicare Advantage vs. Medigap

Medicare vs. Medicaid