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Don’t be a Medicare statistic. Do you understand your coverage?

Do you understand your Medicare coverage? There is no one-size-fits-all plan and the follow-on implications can be significant.

3 mins read
Our goal is to give you the tools and confidence you need to improve your health and finances. Although we may receive compensation from our partner insurance companies, whom we will always identify, all opinions are our own. CoverRight Inc. and CoverRight Insurance Services Inc. (NPN: 19724057) are collectively referred to here as "CoverRight".

Take your time to understand how Medicare works.

Don’t rush the sign-up process. If you make a decision based on advice from friends and family beware that what works for them might not be best for you.

You would be amazed at how many people simply rely on what a friend or family member has for coverage.  There is no one-size-fits-all plan. The follow-on implications can be significant. There can be issues such as which doctors or medications are covered, or you might end up paying significantly more than you should.

Here are the four (4) most common mistakes when it comes to understanding coverage:

Confusing Medicare Advantage and Medicare Supplement

Both plans are sold by private insurance companies (and the same companies often sell both types of plans) so it’s easy to get confused.

However, they are very different in how they provide health coverage, and, you cannot have both at the same time.

Medicare Advantage (Part C)Medicare Supplement (Medigap)
DescriptionPrivate alternative to Original Medicare (Part A and B)Private supplemental plan that provides ‘gap’ coverage for the costs Original Medicare does not coverTypically referred to as ‘Cadillac’ coverage
in addition to Part B
$0 – $100 per month$90 – $300+ per month
How You Pay for HealthcarePay copays as you go, typically limited premiums Pay upfront through monthly premiums – limited to no copays
Doctor coverageTypically requires the use of a network of doctorsAny doctor or hospital in the U.S. that accepts Medicare
Capped out-of-pocket costsYes

$8,300 for in-network$12,450 for out-of-network (if covered)
No – however, your plan covers most out-of-pocket costs via your premium payments
Medicare Advantage vs Medicare Supplement: High Level Comparison

Not understanding doctor networks: HMO vs. PPO

Beneficiaries who sign up for Medicare Advantage plans often do so because they are attracted to the ‘$0 premiums and extra benefits (like dental, vision, hearing).

While these are undoubtedly attractive qualities of Medicare Advantage plans, a critical point that is easily overlooked is that these plans may have specific rules around provider networks.

Medicare Advantage plans are ‘managed care plans,’ meaning insurance companies negotiate discounts and rates with healthcare providers to form a ‘network’ that provides care for its members at reduced costs.

Even plans provided by the same insurer can differ in what a doctors and hospitals are covered.

The two (2) most common plans typed are HMO and PPO.

Doctor NetworkLimited to doctors and hospitals within the plan’s networkOut-of-network not covered except for emergenciesHas ‘preferred’ network of doctors and hospitalsOut-of-network doctors are covered but at higher cost
Care coordinationCoordinated by a single doctor (also known as Primary Care Physician or ‘PCP’)No care coordinator – free to use any doctor
Referrals for SpecialistsNeed referrals from PCPNo referrals necessary

Prescription Drugs: Not Checking Coverage and Cost

Most Medicare beneficiaries understand that they should sign up for a Part D prescription drug plan to lower costs.  However, we’ve encountered many Medicare-eligible beneficiaries who believe their drugs are covered ‘similarly’ by all drug plans.

Every Part D plan has a ‘formulary’ or list of drugs that are covered.  While the development of formularies includes at least two drugs in the most commonly prescribed drug classes for the Medicare population, they might not have your specific drug.

In general, each Part D drug plan:

  • May differ in their formularies
  • May price the same drug differently
  • May change their formularies during the year
Tip:  Check your drug costs – don’t be a Medicare statistic

9 out of 10 Medicare beneficiaries are in a drug plan that is not the lowest cost.It is not uncommon for the same drug to vary 200%-300% in costs across different plans in the same zip code.

Not Assessing Your Coverage Annually

Unfortunately, Medicare is something you can’t ‘set and forget’.  Plans can change benefits each year – for instance, services can be added or removed, or more importantly, doctor networks and drug formularies can change.

Review your coverage every year to make sure you don’t miss out on critical changes – if your health situation has changed and you’re seeing new doctors or taking new drugs – shop around to see if you’re still on the best plan.

Bottom Line:  Medicare is not one size fits all

We recommend all beneficiaries get advice from an expert and review their plans carefully each year for changes, especially if your health situation changes. It’s important to understand the scope of your coverage.

Related Posts

Why You Shouldn’t Miss Your Initial Enrollment Period (IEP)

Is Medicare Free?

What Does Medicare Cover?

What Does Medicare Part D Cost?

Medicare Advantage vs. Medigap: How to Choose?

Josef Katz

Josef is a digital marketing expert, is a podcast host of PrimeLife and formerly a licensed insurance agent. Josef has had an extensive career across the education, healthcare, insurance and financial services sectors and is passionate about educating consumers.

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