This article is continued from Part 1.
Retiree benefits are received by approximately one in every three Medicare beneficiaries, and are a form of supplemental coverage from the retirement health plan provided by their former employers.
For these individuals, Medicare began quite simply. They would use both Parts A and B, and then would simply use the insurance from their former employers to cover the out-of-pocket costs such as prescription drugs. The majority of individuals who have this option available to them will take it. However, employers are offering this option on a decreasing basis as healthcare becomes most costly and Medicare now offers a drug plan.
Prescription drug coverage is called the Medicare Part D plan and these are subsidized by the government but are offered by private insurance companies. Both original Medicare and Medicare Advantage can be combined with Part D if they don’t already include prescription drug coverage. The average monthly cost of Part D is $30. Plans can be changed annually. The new Part D-Finder tool at Medicare.gov offers a great way to compare the different plans available in an individual’s area.
It is important to note that starting in 2012, one of the changes affecting retirees is that wealthier retirees will pay higher premiums on these plans. That said, the doughnut hole will be further closed by this law, as 2012 will also mean that only half of the price of brand name drugs will need to be paid when in the coverage gap, and 86 percent of the price for generic drugs. With age, these discounts grow.
Medigap plans help to pay for some of the costs that are not covered by some of the other Medicare plans, such as deductibles and co-payments. Typically speaking, for about $150 to $450 per month, a good quality Medigap plan will provide greater protection than Medicare Advantage. Medigap offers standard benefits which are identified by letter coding so that all plans with the same letter can then be compared.
Medigap will be gaining two new plans, which will be called M and N, for lower premiums but that still involve deductibles and co-payments.
This information is only the beginning of what these plans involve. Make sure to inform yourself before making the Medicare decisions for yourself or your parents.
For more information and rates on other types of supplemental health insurance plans