A, B, D, C and the One Big Decision

A, B, D, C. They may not be in alphabetical order but, when it comes to Medicare, it’s easier to understand when they’re in this order.

Medicare, also referred to as “Original Medicare,” is made up of Parts A and B and is run by the US Federal Government. On the other hand, Parts D and C are run by private insurance companies that have been approved by Medicare. Given this fact, you might be tempted to mentally section off the four letters into two parts, A and B in one and D and C in another. However, there’s a reason D is before C and a reason why you’re probably going to want to section the alphabet this way: A, B, and D in one, C in another.

But before I go on, let’s take a quick look into what Medicare is offering with Parts A and B.

      Part A, also known as Hospital Insurance: this covers hospital stays

      Part B, also known as Medical Insurance: this covers outpatient care

If you have A and B, you’re missing prescription drug coverage. Part D covers your prescription drugs.

So, with A, B, and D, you’ve got decent coverage. What’s Part C then? Part C, also known as the Advantage plan, covers the same things as A, B, and D.

What’s the Difference?

For most cases, people either sign up for A, B, a Supplemental Plan, and D or sign up for A, B, and C (which oftentimes includes D). Generally speaking, Advantage plans (Part C) are typically less expensive but may have more out-of-pocket costs and network limitations whereas Supplemental plans (Medigap) are typically more expensive but may have fewer out-of-pocket costs and the freedom to go to any provider that takes Medicare without referrals. The plan that’s right for you depends on both your health needs and financial resources.  

How will ObamaCare Really Affect Medicare Recipients?

ObamaCare and the online health insurance exchanges have certainly confused Medicare recipients.  At every single presentation this past Annual Enrollment Period, our team members have been asked about how ObamaCare will affect their Medicare benefits.  

For the longest time, we’ve been telling our clients that ObamaCare will not affect Medicare.   The way Medicare is structured (Parts A, B, C, D) will not change and the ways to enroll or change plans will not change. 

In some ways, Medicare was like the preview for ObamaCare. Medicare eligible individuals are already ahead of the curve. 

For example, you get to select from a number of plans that range from lower cost sharing at a higher monthly premium (Supplemental plans) or higher cost sharing at a lower monthly premium (Advantage plans).  If you didn’t have health insurance and didn’t enroll in Medicare when you were eligible, there’s would be penalties when you did enroll later on.

However, looking forward, we foresee potential changes to Medicare plans that may affect the pocket books of our clients.

As healthcare gets more expensive, insurance companies will constantly be looking at their bottom line.  We foresee higher monthly costs for plans with monthly premiums such as supplemental plans.  We’ve seen plan rates go up as much as 5-15% depending on the plan and state. 

For plans that have low or no additional monthly premiums, we’ve seen an increase in out of pocket expenses such as hospital deductibles and co-pays. 

To be fair, market factors such as increased healthcare expenses and inflation have contributed to a rise in premiums and cost-sharing way before ObamaCare ever came along. 

However, proposed cuts to Medicare will accelerate the amount that Medicare recipients will have to pay for their share of health benefits. 

As a health insurance agent, it’s never pleasant to receive a call from a client upset about a rise in their premiums or changes to their benefits.   We’ve taken a strong initiative to really educate individuals on what may potentially happen so there are no big surprises down the road.

Disclaimer: Views expressed in the article are solely the opinions of the author and is not endorsed by the Center for Medicare and Medicaid Services (CMS) or affiliated insurance carriers.  Doctor’s Choice is a subsidiary of InsureHealth Inc.