Medicare: How to Compare Options

The USC Verdugo Hills Hospital’s Community Resource for Aging assists callers in navigating the complexities of Medicare. Many people have questions when initiating this insurance or learning about open enrollment. To address these concerns, we have developed a strong partnership with The Center for Health Care Rights, a non-profit organization dedicated to helping individuals understand their health care options. Together with the LCF Age-Friendly Project, we are committed to increasing awareness of this valuable free resource.

On Friday, April 18 from 1 p.m. to 2 p.m., Stephanie Fajuri, Esq., the director, will present “Medicare: How to Compare Options” at USC Verdugo Hills Hospital (council rooms C and D). This public service is part of their Health Insurance Counseling and Advocacy Program (HICAP), which is primarily funded through grants from the Los Angeles County Aging and Disabilities Dept. and the Los Angeles City Dept. of Aging.

Reservations can be made by emailing Aging-Resources@med.usc.edu or by calling (818) 949-4033. Here are some basics that most of us need to know when we turn 65.

What is Medicare? Medicare is the federal health insurance program for people aged 65 and older. It also provides health insurance for younger people with certain disabilities and for individuals with end-stage renal disease. 

What Are the Different Components or Parts of Medicare? Part A covers inpatient hospital care. Part B covers outpatient care like doctor visits, lab tests, ambulance services, certain preventative care such as screenings and vaccines, and other outpatient services such as physical therapy, home health services and durable medical equipment. Part D covers prescription drugs.

What is the Difference Between Original Medicare and Medicare Advantage? Original Medicare is paid for and administered by the federal government’s Center for Medicare and Medicaid Services (CMS) while Medicare Advantage Plans are a type of private insurance (like an HMO) offered by insurance companies that contract with CMS. Original Medicare allows you to opt out of Part B (outpatient care) and does not offer Part D (prescription drugs). However, Part D can be added through what is known as a private drug plan (PDP). This is more of an a la carte approach. 

Costs: Both original Medicare and Medicare Advantage have cost structures much like insurance we have had all our lives.

• There is a monthly premium except for Part A, which is free if you have contributed through Medicare taxes over the course of your work life.
• There are annual deductibles that must be met before costs are covered.
• There are co-payments for services once deductibles are met.

Under original Medicare, Part D (prescription drugs) would also need to be purchased separately using a PDP and the average premium for such a plan is $55/month.

Medicare Advantage plans all have different premium costs but, as stated earlier, Parts A, B, and D, along with vision and dental, are generally bundled together in this premium cost.

The major difference between the two in terms of costs is that all Medicare Advantage Plans have maximum out-of-pocket (MOOP) caps for Part A and Part B expenses. Original Medicare on the other hand does not have a MOOP. So while upfront costs may be lower with original Medicare, there is no cap on potential costs.

Key takeaways:

• You want to arrange for accessible health and social care! 
• Explore your options, preferences and budget before you turn 65. 
• Remember that Medicare Part B and Part D are not automatic or mandatory but are critical resources for remaining healthy. 

  Our complimentary resource center helps you navigate health insurance options. This service is available to everyone, regardless of your health care providers, through the USC VHH Community Resource Center for Aging. We welcome your phone calls at (818) 949-4033 or emails at Aging-Resources@med.usc.edu.