Cheat Sheet for Making Direct Primary Care Work With Medicare
Direct Primary Care (DPC) is becoming more popular among baby boomers looking for affordable concierge-level healthcare. However, many patients on Medicare are struggling to find compatible insurance plans that support DPC practices. In this cheat sheet, we'll provide you with some valuable information about Medicare and how to choose the right plan to complement your DPC doctor.
What is Medicare?
Medicare is a federal health insurance program for individuals aged 65 and over, disabled for 24 months, or with certain conditions. Medicare is divided into several parts, including:
Part A: Hospitalization coverage
Part B: Outpatient services coverage
Part C: Medicare Advantage plans
Part D: Prescription drug coverage
Most people who have paid 40 quarters into the Medicare system via payroll taxes pay $0 for Part A, while Part B costs $174.70/month (2024), with the possibility of a higher rate based on income. There is also a $1,632 (2024) deductible for Part A and a $240(2024) deductible plus 20% coinsurance for Part B.
Breakdown of What is Covered by Medicare Parts
Medicare covers a wide range of medical services and supplies, including hospital stays, doctor visits, preventive services, diagnostic tests, medical equipment, and prescription drugs.
Here is a breakdown of what each part of Medicare covers:
Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice care, and home health care.
Part B (Medical Insurance): Covers doctor visits, outpatient care, preventive services, diagnostic tests, and medical equipment.
Part C (Medicare Advantage): Offers the same coverage as Parts A and B, but is provided by private insurance companies. May also include additional benefits such as dental, vision, and hearing.
Part D (Prescription Drug Coverage): Covers prescription drugs and is provided by private insurance companies.
It's important to note that while Medicare covers a lot of medical expenses, there are still some services and supplies that it doesn't cover, such as long-term care, dental care, and cosmetic procedures.
Medigap Coverage
To fill in the gaps of Medicare Parts A and B, some individuals choose to enroll in a Medigap (or traditional Supplemental Plan) along with a standalone drug plan (Part D). Common supplemental plans include Plan C, F, G, and N. These plans provide more flexibility in choosing providers and protect against high costs like hospitalization and outpatient surgeries. However, the monthly price of a Medigap plan is usually higher than other options.
Key point: Medigap plans work well with DPC practices because they supplement Medicare Parts A/B. While Medigap plans do not cover the cost of your DPC doctor, your DPC doctor can still coordinate your care and recommend services without the need for referrals.
Medicare Advantage Plans
Medicare Advantage plans (Part C) is essentially privatized Medicare. Private insurance companies like Blue Cross, United, Aetna, and others take over your Medicare and become your primary insurance. You still have to sign up for Parts A/B and pay the Part B premiums, but you usually get a plan that combines prescription coverage, dental, vision, fitness, and other benefits for a lower cost than traditional Medigap plans.
The reason why these plans are low cost is because they can control costs by limiting choices on providers, co-pays for services, and oftentimes requiring referrals for specialists.
Key point: If you have a Medicare Advantage plan, make sure that the plan does NOT require any referrals. Typically, PPO plans (preferred provider organizations) do not require referrals versus HMO (health maintenance organizations) plans. However, make sure to read the fine print, as some HMO plans may not require referrals. If your plan does require referrals, you will have to choose a Primary Care Provider that accepts your plan.
When to Make a Decision
If you're unsure about your decision, there are several enrollment periods where you can choose or change a plan to coordinate with your DPC.
IEP (initial enrollment period): During the first three months before, the month of, and three months after your 65th birthday, you're new to Medicare and can choose either a Medigap/Part D or an Advantage plan available to you.
SEP (special enrollment period): If you're retiring after 65 and were on your/your spouse's employer plan or have another special election period such as moving outside of your current plan area, you'll be able to make a switch mid-year.
AEP (annual election period): AEP occurs between October 15 - December 7th. During this period, individuals on Advantage or Part D plans During this period, individuals on Advantage or Part D plans can make a switch. However, in certain states such as RI (the state we’re in), switching from Advantage to a Medigap may still require medical underwriting and can be difficult if you’re unhealthy.
MA OEP (Medicare Advantage open enrollment period): this period allows individuals to make a one time switch from January 1st to March 31st. However, Medigap underwriting rules still apply if you’re looking to switch from an Advantage plan to a Medigap. Unfortunately switching from a stand-alone Part D plan to another Part D plan is excluded from the MA OEP.
SEP for D-SNPs (Dual Eligible Special Needs Plans): If you’re eligible for both Medicare and Medicaid, you may be able to enroll in a D-SNP which provides extra benefits for individuals with both Medicare and Medicaid. The enrollment period is year-round.
Final Thoughts
As more physicians retire and switch to Direct Primary Care practices, it’s important for Medicare beneficiaries to understand their options and make informed decisions when selecting a plan. Medigap plans work well with DPC practices because they supplement Medicare Parts A/B and allow you to see any doctor/hospital that takes Medicare with no referrals. However, they can be expensive. Medicare Advantage plans can be a more cost-effective option but make sure that the plan does not require referrals, or you will have to find a primary care provider that accepts your plan. Remember to take advantage of the enrollment periods to make any necessary changes to your plan. By being informed and proactive, you can make Direct Primary Care work for you with Medicare.