Michigan Medicare Health Plans: The Basics Guide

Michigan Medicare Health Plans

Michigan Medicare health plans can seem daunting; regardless to if you’re just entering the Medicare program or you’ve been on it for years. 

In this guide, we’re going to explore a bird’s eye view of the parts of Medicare and how private insurance interacts with the Medicare program here in Michigan. 

Table of Contents

Medicare is easy to learn, but hard to understand. For a FREE Medicare Plan quote, fill out the form to your RIGHT ---> if on Desktop or hit the "Request Quote" button above if mobile.

What is Medicare?

Medicare is the government health plan for people in American citizens or permanent residents that fit into one of three categories:

  1. Are over 65 years old.
  2. Are considered Disabled by the Social Security Administration for 24 months or more.
  3. Have End Stage Renal Disease or ALS.
Most people get Part A premium-free, but if you haven’t earned 40 work credits (10 years of paying Medicare taxes) you will likely have a premium to pay for Part A.

Unlike Part A, Part B will always have a premium, regardless of if you paid Medicare taxes or not.  
 
Both Part A and B also have deductibles and Part B also covers additional Co-insurance (portion you pay) every time you use it. 

What Doesn't Medicare Cover?

While there are some small exceptions, usually due to other medical conditions, Medicare does not cover routine care for the following conditions:

  • Dental
  • Vision
  • Hearing 

Furthermore, while Medicare does offer some post hospitalization care and does offer Hospice care, it does not pay for a long term nursing home stay. 

What's The Role Of Private Insurance in Michigan Medicare Health Plans?

There are two Michigan Medicare health plans:

  • Medicare Advantage 
  • “Original” Medicare

Private insurance plays a different role, depending on the type of program you’ve chosen. 

Despite having two different Michigan Medicare health plans, it’s important to know that they are required to offer the same basic benefits. We’ll explore these more in the next sections.

Medicare Supplements

Medicare Supplements are insurance programs that fill the gaps of “Original” Medicare (better known as Part A & B.) Often you’ll hear about Plan F, G, or N with Medicare Supplements, as these are the most common and popular plans for “Original” Medicare participants; you’ll also hear them referred to as Medigap plans. 

With “Original” Medicare, participants will have two types of out of pocket costs. These include:

  • Deductibles– The amount YOU must pay before Medicare covers anything during a benefit period (for example, Part B has a $198 deductible for 2020.)
  •  Coinsurance– The percentage of the bill that Medicare doesn’t cover. (for example, after your deductible Medicare pays 80% of approved Part B costs. You pay 20% out of pocket.)

Medicare Supplements cover parts of Medicare Deductibles and Coinsurance depending on the plan you use.  Medigap plans cost more up front (as you pay for your Medicare Part B and the Medigap plan premium), but offer three benefits that make it a great option:

  1. You pay less when you use your Medicare approved services.
  2. You can use any doctor that accepts Medicare in the United States.
  3.  You need minimal prior-authorizations to go to specialists or get testing.

Medicare Advantage

Medicare Advantage (also known as Part C) is a cost savings measure where the government empowers private insurance companies to administer the Medicare insurance program. Medicare Advantage plans are required to offer the same basic benefits as Part A & B at approximately the same out of pocket costs.

There are three major differences between Medicare Advantage and “Original” Medicare:

  1. Medicare Advantage plans are designed for a specific geographic area (usually your county, and in some cases your state/other parts of the nation.)
  2. Medicare Part C have prior authorizations for tests and procedures. 
  3. Medicare Advantage plans can require referrals to see specialists.

However, to balance these drawbacks, Medicare Advantage plans have lower up-front costs but you will pay when you use services. This can include but are not limited to the deductible’s and coinsurance on certain services, but also co-pays when you see outpatient services like doctor’s or therapy sessions. 

Furthermore, there is minimal health questions to sign up for a Medicare Advantage plan.

Learn more about Michigan Medicare Advantage plans by reading this article. 

Part D: Prescription Drug Plans

Similar to Part C, above, Medicare Part D is administered by a private insurance company. Each company has a formulary,  which are the drugs that they have chosen to cover. 

Medicare does require Part D plans to cover 2 of the most commonly prescribed drugs in category and class (for example, 2 common beta blockers and/or 2 common asthma medications.) 

Furthermore, Part D plans have tiers of drugs where generics and brand name drugs may be on different tiers as a cost saving measure for the insurance company. 

It’s important to work with your insurance agent to determine what Part D plan is best for you based on your medications to ensure that you’re getting the best plan for your needs. This may even mean that you may pay for Part D coverage but will get a lower total cost based on your drugs.

5 Tips About Michigan Medicare Health Plans

Medicare health plans can be confusing. This is especially true if you’re just turning 65 or have just become eligible for Medicare. 

These are the top 5 tips that I have for people that are just entering Medicare to ensure that you do not mess up your healthcare plans. The wrong decision can cost you hundreds or thousands of dollars just when you enter a fixed income. 

Tip 1: Sign Up For Part A Even If You Continue To Work

If you continue to work and are covered under your work health insurance plan, you may ask why sign up for Medicare Part A?

For most people, Medicare Part A is premium free if you have 40 quarters (or 10 years) of paying Medicare taxes. Provided Medicare Part A (remember, hospital care) is premium free, you have nothing to lose by signing up at age 65. 

Medicare Part A will almost always be secondary coverage to your employer except if your employer has 20 or less employees. However, in the event that you have a catastrophic health event that requires you to go into the hospital, it may reduce your health bills without any charge to you.

*EXCEPTION*  Do not sign up for Part A if you (or your employer) are contributing to a Health Savings Account (HSA) as part of your High Deductible Health Plan. By law, to get the tax benefits of an HSA, you cannot have secondary insurance coverage. 

Tip 2: Don't Put Off Signing Up For Part B Or D If You're Eligible

Speaking of companies with 20 or less employees, you’re required to sign up for Medicare when you turn 65 or not have coverage. Furthermore, you’re only automatically enrolled IF you’re receiving Social Security or Railroad Retirement benefits. 

Unless you have a Special Enrollment Period, you can only sign up for Medicare Part A, B, and D during the 7 month period starting 3 months prior to turning 65 to 3 months after you turn 65 OR during the General Enrollment Period (Jan 1- March 31) annually. 

Every full year that you don’t sign up for Medicare when you are eligible and have no special enrollment situation, Medicare charges you a penalty for each Part. While Part A is temporary, Parts B and D are permanent penalties.  

Resources

Medicare Part A Penalty
Medicare Part B Penalty
Medicare Part D Penalty 

Tip 3: If You Buy A Medicare Supplement, Don't Go For A Company Just For Their Name

Here’s the skinny:

If you opt to buy a Medicare Supplement, there’s a secret you need to know. Every Plan letter offers the same basic benefits (Plan G is Plan G) regardless of the insurance company that you use. 

The most popular companies are United Healthcare (AARP), Blue Cross Blue Shield, and Mutual of Omaha.

In some markets, these companies offer the best premiums and stable rate increases. It’s a great idea to use them because they’re the best company for you in your market.

However, in the vast majority of markets in Michigan, they tend to be the most expensive companies available for Medicare Supplements. 

You have to remember that these companies have large marketing budgets.  For them to be profitable, those costs have to be factored into their products. 

With Medigap plans, the government requires these plans to work the exact same way concerning doctors available, coverage, and paying the bill. 

With all of these factors being equal, you should be largely interested in cost, the agent you work with, and the time the company has been in the marketplace. 

Don’t believe me? This is what Medicare says about shopping for a Medigap plan.  

Tip 4: Use An Independent Insurance Agent

I know what you’re thinking… 

I hate talking to insurance agents.

I get it. No one wants to deal with Ned Ryerson from Groundhog Day. However, hear me out.

Medicare is complicated and there are a ton of insurance companies that offer Medicare health plans in Michigan all wanting your business. There are two types of insurance agents:

Captive and Independent agents.

Captive agents work for a single company and can only offer that companies products to you.

Independent agents work for themselves and can offer pretty much any company available to you. 

 While Medicare health plans are largely standardized in what benefits they offer, the insurance company can have different criteria on how or to who they offer those benefits to. 

In the case of Medicare Supplements, this is in underwriting and how the company conducts business (such as customer service.)

For Medicare Advantage, companies have networks of doctors, hospitals and specialists that you can use.

It’s important to work with the right company for YOUR NEEDS. An Independent agent’s paid based on keeping you as a client, not appeasing the insurance company. That’s in your best interests. 

Tip 5: Medicare Supplements Can Be Shopped At Any Time Of The Year; Not Just Open Enrollment.

If you opt to purchase a Medicare Supplement, you’ll quickly find that insurance companies give you a present every year around your birthday in the form of a rate increase. 

Furthermore, some years you can expect a second increase due to the amount of claims that an insurance company has to pay out to ensure they’re profitable. 

I advise that people using a Medicare Supplement should shop their plan every 2-3 years to make sure they’re getting the best value for their insurance dollar. Most times, people haven’t shopped in over 10 years and they can save a significant amount of money without changing any of the benefits that they already get.

However, many people only shop their plan during the Annual Open Enrollment Period because they believe that’s the only time they can. Unlike Part D and Medicare Advantage, Medigap plans can be shopped at any time of the year. 

In Michigan, you’ll have to be able to pass underwriting, but it never hurts to talk to someone after you see a rate increase. The Medicare Supplement market changes annually as companies come in and out of the state or form new entities without people knowing. 

Medicare is easy to learn, but hard to understand. For a FREE Medicare Plan quote, fill out the form to your RIGHT ---> if on Desktop or hit the "Request Quote" button above if mobile.

What's Next?

Medicare is hard to understand. Work with someone that works with you, instead of sees you as a dollar sign. If you’ve found this article helpful, please feel free to share it on your favorite social media accounts. 

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