Managed Care is also known as Medicare Advantage or Part C. These types of plans have become more popular in recent years.
What is Medicare?
Original Medicare is Part A & Part B. Medicare Part A is your hospital insurance. Part B is your outpatient insurance. Almost all doctors and hospitals accept Medicare.
You will pay a premium for Medicare Part B. The base monthly premium for Part B is $170.10 in 2022. It can be more based on your income. Most people do not pay for Medicare Part A. If you do have to pay for Medicare Part A it can cost as much as $499 per month!
You will also have deductibles to meet if you take advantage of your health insurance and services provided. Your Part B deductible is $233. Once you’ve met this deductible, you will pay 20% of the Medicare approved amount for all outpatient services. This is, of course, most of your typical medical needs.
If you need to be hospitalized, you’ll have to meet your Part A deductible of $1556. This is applied per benefit period. You won’t have any type of coinsurance for a period of up to 60 days depending upon whether you are in a hospital or skilled nursing facility. After that it can be a few hundred dollars per day
Despite these costs, Original Medicare is actually a largely affordable solution with comprehensive coverage. There are also additional programs available for those who struggle to meet these costs due to special needs or lower income.
People may look to cover these financial gaps with a Medigap plan also known as a Medicare Supplement Plan. You pay an additional monthly premium to cover your deductibles and coinsurance.
For example, you could choose Plan G which will cover all additional costs except your Part B deductible. If your Plan G costs $200 per month you would pay that in addition to your Part B. $170.10 + $200 (let’s round here for simplicity’s sake) is $370 per month. For the full year, your total healthcare costs would be about $4440. The only additional cost you’d be responsible for is your Part B deductible. So, again rounding, you’d be looking at about $4670. Regardless of how many specialist visits or hospital stays, this would be your total cost.
Costs for Medigap plans can vary and there are many plans to choose from with varying levels of coverage.
Medicare Advantage is also known as Managed Care. It is also referred to as Part C. It is an alternative to Original Medicare. Managed care plans must offer at least the same benefits as Original Medicare. There are pros and cons to these types of plans.
Lower premiums than Medicare plus Medigap (although they are never actually free)
OOP max which is not offered by Original Medicare alone
Often lower coinsurance or copays than Original Medicare alone
Frequently offer additional benefits not offered by Original Medicare such as dental, prescription drug, hearing and vision
Managed Care Plans work much more like the health insurance that you’ve had in the past as opposed to Medicare. It is not without downsides.
Resetting OOP max
The final downside must be emphasized. With Original Medicare or Original Medicare plus a Supplement Plan you will have access to almost any doctor or hospital. Managed Care Plans rely on a network. It can be very difficult to find doctors or hospitals who accept your plan. You may even have to travel which is far from ideal.
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