Whether you are choosing a Medicare plan for yourself or for your loved one, I’m so glad you are here. This is an important choice. If you don’t understand the plan you are signing up for, it can have big consequences. I’ve seen this first hand – my day job is as a Physical Therapist in a Skilled Nursing Facility. It is heartbreaking when my patients are stuck making a no-win decision because the care they need isn’t covered. The time to find out what your plan covers (or doesn’t cover) is now, not when you need it. So let’s take a look at your options: traditional Medicare vs managed Medicare.
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What is Medicare?
Medicare is a federal health insurance in the US for those 65 and older, as well as certain younger people with disabilities or End stage renal disease. There are 4 parts: Medicare Part A, Medicare Part B, Medicare Part C, and Medicare Part D.
Medicare Part A
Medicare Part A is called “hospital insurance” and covers inpatient stays. This includes hospitals, skilled nursing facilities, hospice care and some home health care. Most medically necessary care is covered. Medicare Part A is provided for free, as long as you or your spouse worked for at least 10 years. That’s because when you were working, you paid Medicare taxes. If you qualify for Medicare due to a disability, that requirement doesn’t apply in your case.
Medicare Part B
Medicare Part B is called “medical insurance”. It covers doctor visits, outpatient care, medical supplies, lab tests, diagnostics, and preventative care. Most medically necessary care is covered. The cost of Medicare part B is determined annually by the Centers for Medicare and Medicaid Service (CMS). The standard Part B Premium amount for 2024 will be $174.70.
Medicare Part D
Medicare Part D is called “prescription drug coverage”. This is administered through private insurance companies who are affiliated with Medicare. Because of this, there are a variety of plans to choose from each with different benefits and costs to consider. Plans may cover different drugs, and have different copays, deductibles, and permiums.
Medicare Part C
You may be wondering why I’ve listed Medicare Part C last, rather than going in alphabetical order. This is intentional, because Medicare Part C is actually Medicare coverage offered by private insurance companies. This is also called Medicare Advantage, Managed Medicare or Managed Insurance. A Managed Medicare plan is a bundle, which includes all of the types of coverage listed above in Medicare parts A, B and D.
So What IS Managed Medicare?
Managed Medicare is, as stated above, a Medicare plan administered by a private insurance company. There are certain minimum benefits that the private insurance company is required to offer, so most medically necessary care is covered. Additionally, there are extra benefits that Traditional Medicare does not offer. With Managed Medicare, you need to be enrolled in Medicare Parts A and B. You are still a part of the Medicare program, and are entitled to the same rights and protections. However, with Managed Medicare you choose to receive your coverage and benefits through a private insurance company.
Traditional Medicare (Parts A and B) covers most medically necessary services. Prescription drug coverage is not included with traditional Medicare. Prescription Drug coverage must be purchased through a private company with a Medicare part D plan.
Pre-existing conditions are covered.
Rehabilitation in a Skilled Nursing Facility is covered if you have a qualifying inpatient hospital stay or require a specific type of care like intravenous medications. Coverage is up to 100 days, but does depend on medical necessity. This means that if you no longer require therapy or intravenous medications, they will stop covering your stay. This is fine because at that point you will be ready to go home. Medical necessity is determined by the doctor, therapist, or provider who is providing your treatment.
How Much Does Managed Medicare Cover?
Managed Medicare plans typically are a bundle, which includes services provided in Parts A, B, and D of traditional Medicare. That means that Hospital and inpatient care, outpatient doctor visits, diagnostic tests, and medications are all covered under the Managed Medicare plan.
Managed Medicare plans can also offer additional benefits that are not included in Traditional Medicare. Most Managed Medicare plans offer vision, dental, and hearing benefits. There are other benefits that can be offered by Managed Medicare plans that are less common. These include meal delivery, gym memberships, over-the-counter medications, transportation to appointments, and even home modification. Home modification means changing the home to make it more accessible, such as adding handrails or wheelchair ramps.
How Much Does Traditional Medicare Cost?
Monthly Premiums
Based on the average costs, total monthly cost for Traditional Medicare Parts A, B and D is $229.74.
Deductible, co-insurance and other costs
For Medicare part B, there is a deductible and a co-insurance. The annual deductible for 2024 is $240. The co-insurance is 20% after you have met your deductible. Basically, the insurance plan does not pay for any outpatient services until you have spent $240 out of pocket. After you have spent $240 on outpatient services, Medicare will pay 80% of your costs and you will pay the remaining 20% of your costs.
For rehabilitation at a Skilled Nursing Facility, the first 20 days are covered with $0 copay. After that you have a co-pay for the rest of the 100 days; current co-pay amount is $200. Anything beyond 100 days is out-of-pocket.
There is no annual limit on what you may pay in out-of-pocket costs. You can purchase a supplemental insurance called a Medigap plan to help with your out-of-pocket costs. The average cost of a Medigap plan is $137.
How much does Managed Medicare Cost?
Monthly Premiums
Monthly plan premiums for Managed Medicare plans vary, as there are a variety of plans. With Managed Medicare, you are still responsible to pay the Medicare part B monthly premium. However, you may end up paying as little as $0 per month. That’s because some Managed Medicare plans pay for the monthly Medicare part B premium for you. However, other plans do have premiums you may need to pay. The average cost of a Managed Medicare plan for 2024 is projected to be $18.50. Prescription drug coverage is usually included, so you do not need to pay for a separate plan.
Co-insurance and other costs
Plans vary, so some plans will have higher out-of-pocket costs than others. Managed Medicare plans often have lower out-of-pocket costs for outpatient services. They also have a cap on out-of-pocket expenses; once you have hit the maximum, all further expenses are covered.
Benefits of Traditional Medicare
First, Medicare does not have a network. You can go to any doctor, specialist, or facility that takes Medicare. You also do not need any referrals to see a specialist. Nearly all physicians accept Medicare patients, so it is very likely that you can go to whichever doctor you choose.
Second, pre-authorization is not required to receive services. If your doctor orders a test, treatment, or prescription, it is covered. This is also true for other services such as physical therapy. If your doctor orders therapy and the therapist recommends treatment, it is covered.
Downsides of Traditional Medicare
Benefits of Managed Medicare
Downsides of Managed Medicare
Were you starting to wonder if Managed Medicare is too good be true? Maybe you’re asking yourself “How can they afford to cover all these extra benefits?”. Well unfortunately, there are some definite downsides to choosing a Managed Medicare plan. They can afford to offer extra benefits because these plans are closely managed to reduce “unnecessary” care.
Referrals
You will likely need a referral to see a specialist. Your Primary Care physician will act as a gate keeper, determining when a specialist visit is actually necessary.
Pre-Authorizations
Diagnostic testing or a prescription may need to be pre-authorized, and could be denied be the reviewing medical professional. That reviewing medical professional is someone working for the private insurance company. So even though your doctor ordered the test or prescription, your insurance may not cover it. The same is true of therapy services, where they may only authorize a few visits at a time or may deny the services altogether. In my opinion, my doctor or therapist knows me much better than the medical professional at a desk approving or denying my care.
Networks
Aside from the issue of pre-authorization, the other drawback to Managed Medicare is that they have networks. To be fully covered, you will need to get care from in-network providers or facilities. If you use an out-of-network provider, you will have higher out-of-pocket costs or it may not be covered at all.
My Experience Working in Healthcare
Skilled Nursing Facility
Outpatient Physical Therapy
Which is best for my budget and my health?
If you are still unsure, there are two places I would recommend for more information. First, go straight to the source at Medicare.gov. Do you need more personalized information regarding your needs and your local area? Contact your local area Agency on Aging. They can give you recommendations on Medigap, Medicare Part D plans, and Managed Medicare plans. I would actually recommend contacting the Agency on Aging every year, as the best plan may change each year.
Now when it’s time to make your Medicare Selections for the coming year, you can choose with confidence for you or your loved one! Do you have any questions, comments, or Medicare experiences you would like to share? Comment below or email me at [email protected]. I would love to hear from you!
