Many times over the past couple of decades, I’ll get a call from someone who was referred to me. I love referrals! The caller will tell me something like, “I’m interested in doing the kind of Medicare supplement that my friend did that is free.” Emotionally on the inside, I am throwing a temper tandem, pulling my hair out and biting my lip. Then I take a deep breath, compose myself, and address the caller in a calm and professional manner.
“I’m sorry, but there is no such thing as a free Medicare supplement. What your friend has is a Medicare Advantage plan.” Then I would proceed to explain the difference between a supplement and an advantage plan. I try to help my clients understand the distinction between the two. As briefly as I can, let me show you the two variations.
Let’s start with the basics. In original Medicare, there are two parts. There is part A, which covers hospital costs. If you have been a taxpayer or the spouse of a taxpayer for at least 40 quarters (10 years) this benefit is already paid for and costs you nothing. Part B covers all other medical expenses such as doctor visits, MRIs, x-rays, chemotherapy, etc. Part A has an event deductible while part B has an annual deductible and an 80-20% coinsurance. Over the years, I’ve seen people who went bankrupt from that 20% portion. To avoid that, they would purchase a supplement.
By definition, a supplement is an addition to something that completes or makes up for a shortcoming. In this case, it supplements what Part A and Part B do not pay. A supplement is a separate insurance by private companies that come with a premium. How these premiums are adjusted is quite telling, but I’ll save that for another day. Just know that premiums in a person’s later years can be a huge burden. Plus, you still have to pay the Part B premium.
The more popular route these days are Medicare Advantage plans or Medicare Part C. They are private company plans that have a contract with the government and must play by the rules set by the government. They combine Parts A and B, and most also cover Part D (prescription drugs). These days, they all offer free fitness club memberships, dental, vision, hearing, and over-the-counter benefits. Plus, many have other nice perks.
Many of these have a zero premium. I did not say “free.” You still must pay for your original Medicare or Parts A and B, which is how you pay for Medicare Part C. So it is not free.
Now I am guessing you might still be scratching your head and wondering what all this means. That is why we are here. It is in our mission statement that we aim to give you the best and most knowledgeable help you can find in navigating the Medicare maze. Let us help!
…and just remember, there is no such thing as a Medicare Advantage supplement.
There is a lot to know when it comes to Medicare. Whether you are new to the subject or want to brush up on your knowledge, consider taking our Medicare 101 course. I am Medicare Certified through the National Association of Health Underwriters, so I can offer you best in class Medicare knowledge. I hope to see you soon!
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