Traditional Medicare vs Medicare Advantage vs Medicare Part D vs Medicare Supplement Explained

hello this is dr eric bricker and thank you for watching a healthcare z today's topic is medicare traditional medicare versus medicare advantage versus medicare part d versus medicare supplement now this video is actually in response to multiple requests that i have received from viewers to cover this so i just wish i'm just look i'm trying to be responsive here and this is a no i meant to be exhausted because the difference among these four plans is super complicated so this is just a high level overview and as you can see from this grid even a high level overview pretty complicated so let's get started in our comparison okay so traditional medicare is divided up believe it or not there's actually subparts to med traditional medicare they're part a and part b and oh by the way i know that many of you already know this but there's a lot of you that don't so this is for everybody it's a review for you if you already know this okay traditional medicare part a and part b part a is the hospital coverage like for the hospital facility charge and then part b is for the doctor fees and also for everything that's outpatient whether it be outpatient testing or outpatient labs okay so believe it or not so the vast majority of people you know if you work enough and i won't get into the details of but if you work enough it's like 10 years then you actually have a zero premium for your medicare part a you just sort of automatically get it when you turn 65. now for um it does have a deductible so if you go into the hospital you will have to pay a deductible now medicare part b you do have to proactively sign up for there is a premium that you have to pay for it no matter what it's pretty low depending upon who you are but it's pretty low okay and it doesn't cover everything so you still have to pay twenty percent co-insurance for all the physician fees and all the lab and all testing and as you know so much more of health care is done on an outpatient basis that that 20 percent can be a very significant out-of-pocket cost for an individual and there's no out-of-pocket max so we'll get into how that then relates to medicare supplements in a little bit okay now what does traditional medicare look like if you are a doctor or a hospital so the prices are set by cmo and also the payment for overall medicare comes from taxes i assumed you all knew that right okay so then if you're a dock or a hospital the prices are set by cms so there's no negotiation between the government and the hospital the government's like we're going to pay you this and the hospital's like okay now it's straight fee for service so there's no prior authorizations there's no referrals required the vast majority of doctors and hospitals in america take medicare so you can so it's incredibly you know there's a lot of freedom in that medicare plan because you don't need to get permission to see like a dermatologist or anything like that and if the doctor wants to order a cardiac stress desk there's no prior authorization from medicare at cms that they have to go through okay next up medicare advantage oftentimes abbreviated m.a or sometimes referred to as medicare part c is where the hospital coverage the doctor and the outpatient coverage and they also add in dental coverage vision coverage hearing coverage for things like hearing aid and most the time your prescription coverage as well all comes from a commercial insurance company and the 800 pound gorillas in medicare advantage are united healthcare and humana and the blue cross plans like anthem do it and edna and cigna do it and there's all these sort of like smaller like regional medicare advantage plans some hospitals even have their own medicare advantage plans that they run as well so no it's a big difference between between what you get from medicare advantage versus traditional medicare traditional medicare has no vision coverage it has no dental coverage it has no hearing coverage it doesn't automatically give you prescription coverage you got to sign up for medicare part d in order to get your permission prescription coverage if you have traditional medicare and the when we're talking about the money believe it or not for many it's like a significant minority of people that are on medicare advantage plans their premium is zero they get it from the insurance company at zero out of pocket cost or it's at a low premium so it's like for the individual member in some respects it's a better deal and as a result of that that's why forty percent now four zero forty percent of people that are on medicare are now on a medicare advantage plan and the remaining 60 are on traditional medicare now just a few years ago it was 30 medicare advantage and 70 traditional medicare and a few years with that it was 20 medicare advantage 80 so as you can see you notice the trend here so medicare advantage is growing by leaps and bounds and in part it's growing because of all these additional benefits that you get with the dental and the vision and the hearing and the premiums tend to be less or zero that's why they're growing so much now the government pays a fixed amount to the health insurance company now it depends upon how sick you are and your age blah blah i will not get into that but on average let's just say it's around a thousand dollars per beneficiary per month so the insurance company is getting twelve thousand dollars a year from the government and the insurance companies like okay well if we can take care of people and keep them being sicker or in some cases depending upon which side of the fence you're on restrict care and not give you the access to care that you need now need you know whether it's waste or appropriate that's a whole other discussion for another day but the point is is that the health insurance carriers are able to make about six hundred dollars of profit off of every beneficiary every year so if they're getting twelve thousand dollars a year that means they're spending out ten thousand four hundred in claims for medical dental vision yada yada yada and they're keeping the balance 1 600 in profit which oh by the way is twice as much as the typical per member profit they receive from their employer commercial insured members so in other words your employer at walmart or like a local small accounting firm like they the insurance companies only make 800 a year off of you there they make 1600 off you for medicare advantage so guess what health insurance companies love medical care advantage that's why it's not only growing because the patients love it but it's also growing because the health insurance companies love it now in terms of the reimbursement to the hospitals it's very different and to the doctors it's very different so we're going to get into that okay so the the unit cost back is about 95 to 105 percent of what medicare is so it's about what medicare would pay for an individual claim like an mri or a ct scan or an office visit sometimes a little less sometimes it's a little more now however this is where most of the innovation is happening i shouldn't say most a lot of the innovation in the medicare space is happening because what's happening is that these health insurance companies are doing capitated and value-based payments out to physician groups especially primary care physician groups i listed some here like chen med and oak street and there's a new newer startup called devoted as well they do a ton of this out in california where physician groups will get capitated payments from medicare advantage plans for our population and this is where like the chen meds and the oak streets of the world they take on the risk of keeping the patients healthy and they essentially to the extent that they can keep the patients healthy proactive yadda yadda then they also get a share in the savings of that twelve thousand dollars per month twelve thousand dollars a year that the government is paying out to the insurance company so the government pays the insurance company twelve thousand dollars the insurance company pays let's say you know 10 minutes let's say eight thousand dollars and then attempt can keep them you know underneath it at like six thousand then tim is going to keep the 2000 difference now i am making up those numbers i'm not saying what the numbers are but you get the idea in terms of how the money flows so how is it that they spend so much less per medicare beneficiary here is the huge difference almost all medicare advantage plans are hmo plans with a pcp gatekeeper where if you want to go see a specialist or have a test or procedure like the primary care physician has to sign off on it and say okay or say no we're not going to do that we're not going to get an mri of your lower spine we're going to do physical therapy instead okay as an example or they're a narrow network ppl so for example you might have united healthcare as an employee and you can go to xyz hospital system in the dallas fort worth area that's huge but then if you turn 65 you sh you go on medicare advantage and you choose unitedhealthcare for your medicare advantage plan you cannot necessarily go to that same large hospital system in dallas fort worth or in whatever town you're in because down to fort worth is excuse me because that hospital system is contracted with united if you're a commercial insurance employee because your commercial insurance if your employee it pays a lot more but because medicare advantage only plays 99 cents uh 95 to 100 percent a lot of big hospital systems are not in that narrow network so just because you have united healthcare now you're getting it through medicare advantage now you can't go to that same hospital system anymore because it's a narrow network there's also prior authorizations for tests and procedures and surgeries as well so that is how the medicare advantage plans are able to provide additional benefits and have low or zero premiums because they have much tighter rules around care restriction as opposed to traditional medicare which is quote-unquote willy-nilly fee for service okay it's important to understand that now up until the george bush administration there was no prescription coverage at all for medicare and so as part of the medicare modernization act they added medicare part d for prescription coverage now there's either a low or a zero dollar premium for the medicare part d coverage now keep in mind you get your you typically get your prescriptions through your medicare advantage plan if you sign up for medicare advantage so you sign up for a separate medicare part d plan only if you're part of that traditional medicare 60 60 now there are tiers there's there's a formulary and there are tiers here's one two two three two three four there's copies there's co-insurance oftentimes with the plans with what's called a doughnut hole where you might actually receive like a copay for up to a certain number of prescriptions or a certain amount of prescriptions spend and then you've got to pay all the cost and then the prescription uh drug plan kicks in again so it's complicated and again these prescription drug plans are administered through private health insurance companies now there's prior authorizations for the meds as well and there's formulas so there's controls around the rx so regardless of your traditional medicare medicare event just know there's going to be prior authorizations and controls around the meds now finally we get to medicare supplements what are those sometimes they're called a medic gap plan sometimes it's called medicare part g and this is an optional coverage it comes from a commercial insurance company and you can get it from united healthcare right it's like you can get it from aarp sponsored by united healthcare blah blah blah but actually there's non-health insurance companies that offer these plans as well like mutual of omaha sells a ton of these plans okay so now it's low premium it covers all look at all those ipad costs especially that 20 in medicare part b that you're responsible for so you can buy insurance to help you cover that out-of-pocket cost on your traditional medicare that's what a medicare supplement is so it's and so as far as being a doctor or a hospital there's really no change to you you're essentially you as an individual are essentially buying an insurance additional insurance policy against the out-of-pocket costs that you might have from your traditional medicare coverage okay so and that's at a high level this is like not even close to the level of detail of like fully understanding this but it's an overview and i wanted to give it to you today and thank you for watching a healthcare z

Channel: AHealthcareZ - Healthcare Finance Explained

Views: 19,387

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Id: KRzBxPj-eQk

Length: 12min 7sec (727 seconds)

Published: Mon Jul 19 2021