Medicare is as simple as A, B, C, and D. Now, you may be listening to that and you may be at the age of Medicare and you may say, I think he’s crazy, but if you’ll just stick with me for a few minutes, I’m going to show you how to sort it out and to put A, B, C, and D to it to help you understand it a lot better than most people ever understand it.

Let me dive right in. I’ve made a statement that it’s as easy as A, B, C, and D. Now let me explain some things. A and B are original Medicare. That’s 80% coverage right there. Part A is something that most people get for free. If you’ve worked your 40 quarters at some time during your life you get Part A, which covers hospitalization and a few other things like hospice, but that is part A.

Now, Part B covers things like doctors and durable medical equipment. All of that is provided by the federal government. That’s Medicare, as simple as A and B. Now you have to pay for Part B in most cases unless you get a low-income subsidy or get supported in some way. In 2025 you will have to pay $185 a month to get part B. So, when you turn 65, or if you’re still working and you work past 65 and you’re 67, 69, like a lady that I talked to yesterday, she’s 69 years old, she’s coming off of her company plan, so all she’s got to do, she’s already got Part A that’s been sent to her. She’s just got to go back to Medicare and say, “I now need to turn on my Part B for the doctors, for the durable medical equipment and all that.”

It’s covered. Now when you do that, here’s what’s really important. You are 80% covered when you get Part A and Part B. What do you do with the other 20%? Well, that’s where I like to say you can get option one, which is called a Medicare Supplement, or it’s called a Medigap Policy. I want to show you how hard this is… The option covers the gap 😊. You got it? What is the gap? If original Medicare covers 80% the Medicare Supplement addresses, and in many cases covers, almost all of the other 20% depending on the tests you need and the approvals that you get, but it covers the other 20%. It’s also like a PPO. If you get a Medicare Supplement/Medicare Gap Policy, you can go to any doctor, any pharmacy, any clinic, any hospital in the entire United States that takes Medicare, and you can go directly in and you can get treated there and you’re completely covered to the full extent of the plan.

Who needs it? I always say people who travel a lot within the United States. For instance, if you find yourself in Bangor, Maine, the other side of the country from where we are right now, and you need to go to a clinic for something and that clinic takes Medicare. If you have Medicare Supplement/Medigap Policies, then you can go into that clinic in Banger, Maine and you can be covered. That’s what a Medicare Supplement is.

Now, let’s go back to simplification. Medicare A and B is original Medicare and covers hospitals, doctors, and durable medical equipment. It covers 80%, and one option for covering 20% of your medical is to get a Medicare Supplement, it opens up all the doctors that are working with Medicare and providing coverage for anybody who has Medicare. Now, if you get a Medicare Supplement, and this is where each individual plan can be a little different, so you have to check out, but if you get a Medicare Supplement, remember how I said it’s as easy as A, B, C, and D?

Well, D is prescription drug coverage. Most Medicare Supplements do not cover a prescription drug plan, so in addition to paying for Part B in addition to paying for the Medicare Supplement that may run, I don’t know, depending on which one you get and what state you’re in, it may be a $100 to $200, and as you get older, it creeps up about $5 to $10 every two year period. So that’s the Medicare Supplement, and you’re going to, most of the time have to pay for Part D, a prescription drug plan that’s going to cover your drugs. What’s that going to cost? Well, the best way to find out is go to a website, www.medicare.gov gov, and you can go to the prescription drug plans that are in there, enter all of your drugs, the formularies that you take, the size of the prescription you take, the frequency of the prescription you take, and it’ll show you all of the prescription drug plans available to you from a cost basis, from the cheapest all the way to the most expensive.

Each of those plans has a formulary in Part D. Now we’re talking about prescription drugs. Each has a formulary, so it’s important that you enter if you’re getting a Medicare Supplement, what drugs you are taking right now because that plan that you like might cover this, but another plan might cover it even better, and that medicare.gov can help you with your part D.

You might be thinking, “Tom, you went from Part A and Part B to Medicare Supplement and Part D. What about C?” Instead of choosing Medicare Supplement as an option, you can choose Medicare Part C. Part C is where you turn your coverage over to a company in an HMO like relationship, and that’s called Medicare Advantage. It’s an HMO type relationship, and you have a primary care doctor. If you’ve got an HMO or have had an HMO, you understand how this works. You’ve got a primary care doctor and he or she is the gatekeeper to all your care.

Now, in most cases, not always, but in most cases, the Medicare Advantage plan costs nothing. Not always, but in most cases. Now, why would that be an advantage? Let’s review just a little bit. You pay nothing for Part A. If you’ve worked 40 quarters, you pay in 2025, $185 for Part B, your Medicare Supplement is going to incur extra costs of the supplement itself at 65, it’s going to be somewhere between $100 and $200 a month depending on which plan you get. And then the prescription drugs, what are they going to cost? You’re going to get probably a $35 minimum up to some people have come to me this year and their drugs have gone up to $150, but it covers the drug plans in most cases. So if you go the Supplement route, you’ve got Part B, the Supplement and the prescription drug. Most of the Medicare Part C plans, the HMO plans, the Medicare Advantage plans tack on with them, a prescription drug plan, and the price of most of the Medicare Advantages, not all of them, but many of them, it’s zero. You pay nothing for that. So, you literally could get by paying $185 for Part B and get a Medicare Advantage plan and pay nothing for the plan itself, including the medical coverage, the hospitalization that covers basically the other 20%, and your prescription drugs.

So you may be saying, Hey, this is a no-brainer. Why shouldn’t I just go get the Medicare Advantage that costs nothing. Well, let me tell you what I started to say earlier. If you travel a lot. That’s one reason to go with the Medicare Supplement. Number two, if you have ever been diagnosed, and I joke around and say “ologist”, and what I really mean to say is biologist. In other words, if you have a cardiologist or a rheumatologist or some kind of specialist because you’ve had some health issues and you just need the freedom to be able to call your own shots more by going to see any doctor you want to go see, then you need to look at the Medicare Supplement. But if you’re okay going with your primary care doctor and just going with any specialist within their family of doctors, then it might be O.K. Many times, those families of doctors are really small, so you need to know if they have good cardiologists there in case you ever need them. Do they have good rheumatologists there in case you ever face arthritis and have to deal with something? Do they have good specialists that are able to treat you as you do get more unhealthy as you get older? Some people say, well, you mean that costs nothing, but I’ve got to go to their doctors even when I get sick. Yeah, that’s how it works. So, if you want to really cover yourself, you want to make sure and look at the Supplement, but what you need to do is look at what’s best for you. And that’s where I’ve given some variables in some of these things as to what even some of the Supplements cover, and I’ve said some of the Medicare Advantages have part D and some don’t have Part D, so this is where you need to sit down and do your research.

The whole purpose of this is strictly educational, not sales. I’m not trying to sell you with any one thing. I’m just trying to show you that there are some basic options within all that maze of all the paperwork you get in the mail and the books you get in the mail and the phone calls you get, and the commercials you see that are all confusing. I’m only trying to bring clarity and say, when you really boil it down, Medicare is as simple as A, B, C, and D with that supplement off here to the side.

When we at Mosley Wealth Management build a retirement plan for someone, we talk about income, inflation, investments, taxes, all the normal things, but the fifth thing we talk about is your healthcare and how you’re going to cover your healthcare. It is a big thing to make sure you get your healthcare right.

What are the common mistakes? Sometimes people get A and B and they’re paying $185 for B, and they think I’m covered. You are for 80% of everything, but you have to go to the Supplement or the Medicare Advantage to take care of the other 20%. So it’s really important that you understand healthcare is a huge part of a total financial plan. If you’re just working with a company that calls themselves blank investments or they’re just interested in your investments, they are probably not going over healthcare and healthcare can take as much as $250,000 or $300,000 of your money in retirement. You need to make sure and have it in the right place, the right plan for you. The right plan for your brother or your neighbor may be something different than yours, so you need to sit down and talk to somebody who sells both Medicare Supplements and the Medicare Advantage so you can see all of your options. If you need help, reach out to us. It’s part of what we do in building a retirement plan for everyone. I promise you every week, if you’ll give me a few minutes, I’ll do my best to increase your financial knowledge and if we can help you particularly about a situation, a question, anything you’ve got, go to the website, get an appointment, give us a call. We’ll see you next time!