What is a Medicare Supplement?
Obtaining the right Medicare Supplement and Prescription Drug Plan is very difficult to do when you don’t understand how Original Medicare works. Original Medicare is health insurance coverage you obtain a few different ways. The most common way to obtain Original Medicare is if you are turning 65. That is how most Medicare beneficiaries obtain Medicare. In order to qualify, you must have paid payroll taxes for at least 10 years or 40 “credits”. The second way to obtain Original Medicare is through Social Security Disability. If you have been on SSDI for 24 months, you receive Original Medicare that way. The common misconception is that most think once you are approved for SSDI, you receive health benefits and that is not the case. You must wait the 24 months to receive Medicare, so you must obtain coverage elsewhere in the meantime. The final way to receive Original Medicare is if you were diagnosed with ESRD or kidney failure. If you are diagnosed with ESRD, you receive Medicare immediately and you don’t have to wait 24 months.
Original Medicare Consists of 2 parts. Medicare Part A and Medicare Part B. Medicare Part A doesn’t cost anything because you paid 10 years’ worth of taxes for it. Medicare Part B does have a monthly premium and it normally comes right out of your social security check. The premium does change from year to year. In 2024, it is $185 per month however if your income for the 3 years leading up to Medicare was above $103,000, then your Part B premium will be more. If you are not drawing social security, then you make quarterly payments for it. Each Part covers certain medical services and expenses. Below you will find most of the out of pocket costs when you have Original Medicare.
Medicare Part A (Inpatient Services)
Hospital: 1-60 Days ($1,676 Deductible)
61-90 Days ($419 per Day)
91-150 Days ($838 per Day)
151 Days + (You pay all costs)
Nursing Facility: 1-20 Days ($0 Cost)
21 Days + ($209.50 a Day)
Hospice You up to $5 copay for prescriptions through Hospice
Home Healthcare You pay 20% of the Medicare allowed amount for DME (Durable Medical Equipment).
Medicare Part B (Outpatient and Physician Services)
Most Benefits are subject to annual Deductible of $257
Dr. Visits (pay 20% after deductible)
Lab Tests (pay 20% after deductible)
Preventive (pay $0)
*1st 3 pints of blood are the Medicare beneficiary’s responsibility.
As you can see, there are quite a bit of out of pocket expenses you are responsible for so purchasing some type of Medigap coverage to fill that void is important. A Medicare Supplement could be a great solution.
Medicare Supplements are secondary coverage to Medicare. Unlike Medicare Advantage, Medigap or Medicare Supplements do not replace your Original Medicare. They work with Original Medicare to cover most of your expenses. With a Medigap plan, you don’t have a network of doctors or hospitals you must use. If the doctor or hospital you go to accepts Original Medicare, they will accept your Medicare Supplement. If you purchase Plan F or Plan G, they just about cover the medical expenses that Original Medicare doesn’t cover. You are also able to shop your Medigap policy all year round so you don’t have to wait until the Annual Enrollment Period to change your policy. Now you are subject to medical underwriting if you don’t have a guarantee issue period so you must answer some medical questions before you can make the switch. You also must purchase a separate Prescription Drug Plan to go along with your Medigap policy if you are looking for prescription coverage. There is a small penalty to pay if you don’t purchase a drug plan when you first turn 65 however it may be less expensive to just pay the penalty and your prescriptions out of pocket then picking up a drug plan. Most generic prescriptions are very inexpensive even without insurance coverage so that is something to investigate.
What is Medicare Advantage?
Medicare Advantage, also called Medicare Part C, is a type of Medicare health plan offered by private insurance companies that are approved by Medicare. These plans combine your hospital insurance (Part A) and medical insurance (Part B) into one plan, and many also include prescription drug coverage (Part D) and extra benefits that Original Medicare doesn’t provide—like dental, vision, hearing, and fitness programs.
How Medicare Advantage Works:
Coverage: Medicare Advantage plans cover all services that Original Medicare covers, except hospice care (which is still covered by Original Medicare). Many plans also include routine dental, vision, and hearing services.
Plan Types: Most Medicare Advantage plans are Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs), meaning they have networks of doctors and hospitals. HMOs usually require you to see in-network providers and get referrals for specialists, while PPOs offer more flexibility.
Costs: Copays, Deductibles, and Out-of-Pocket Maximums
Monthly Premiums: Many plans have low or even $0 premiums, but you must still pay your Medicare Part B premium.
Deductibles: Some Medicare Advantage plans have an annual deductible you must pay before the plan starts covering certain services. This can vary widely by plan.
Copays and Coinsurance:
Instead of the 20% coinsurance with Original Medicare, Medicare Advantage plans often use fixed copays. For example, you might pay $20 to visit a primary care doctor or $50 to see a specialist.
Hospital stays and outpatient procedures also typically have set daily copays or coinsurance amounts.
Out-of-Pocket Maximum: A key advantage is that Medicare Advantage plans have an annual limit on out-of-pocket costs for covered services. In 2025, this limit is capped by Medicare at no more than $8,850, but many plans offer lower limits. Once you hit this limit, the plan pays 100% for covered services for the rest of the year. Original Medicare does not have this kind of cap, meaning costs can keep adding up.
Key Points to Consider:
Costs can vary: Lower premiums may come with higher copays or narrower networks.
Check your providers: Make sure your doctors and hospitals are in the plan’s network.
Drug coverage: If you need prescriptions, look for a plan that includes Part D.
Annual changes: Plan benefits, premiums, and provider networks can change each year during the Annual Enrollment Period (AEP).
Medicare Advantage can be a smart choice for people who want an all-in-one plan with predictable costs and extra benefits, but it’s important to review the specific details of each plan to find the right fit for your healthcare needs and budget.
Every health and life insurance policy is not created equal. Everyone needs something different out of their insurance. Whether it be coverage for a specific doctor, an expensive prescription, hospitalization, maternity or maybe you just want to get a physical. Same applies to life insurance coverage, you may need to protect your mortgage or leave money aside for college tuition or maybe you just want to leave something behind for your family to live out your legacy. Here at Next Level Benefits, we want to understand your needs and what is important to you. So, reach out to us and let us take the time to get to know you and your loved ones so that we can provide you a service second to none. We look forward to hearing from you.
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Next Level Benefit was like a breath of fresh air. With overwhelming phone calls from other companies, NLB treated me like a part of their family and got to know me on a personal level. I told them exactly what kind of coverage I was looking for, and they knocked it out of the park with great coverage and affordable prices. Would highly recommend!
