How Medicare Works

Medicare Agents - The government and our health care lobby have further confused things by making you go through Medicare agents to explain the options you have and the supplemental program. They intentionally have you listen to their commission oriented agent to try to persuade you to buy what they want you to buy. This is why you need to do your own research.

Medicare Options - With Medicare, you essentially have three options. There is Medicare alone, Medicare Advantage (which is not the same as Medicare) and Medicare that includes a Medicare supplement. Regardless of which one you choose, you will have about $110 a month taken out of your Social Security check, which essentially gives you Medicare A and B.

Simple Medicare - Straight Medicare is the minimum coverage which is what a lot of people opt for. First, you need to find a doctor who takes Medicare. Once the Medicare charges are approved, you pay up to 20 percent of the costs. There are some doctors who will take your Medicare and you will not have to pay a thing. If you get a good doctor and do not have to pay, you have a great deal here. Unfortunately, if you end up being hospitalized, 20 percent can add up to a huge sum of money.

Medicare Advantage - Medicare Advantage is like being in an HMO. This has its pros and cons. Some people have co-pays of $15 to see a doctor and $30 to see a specialist, but then if you are going to have a procedure like a CAT scan, you end up paying 20 percent of the total cost. In cases like these, Medicare is not really used. An insurance company is assigned, and they contract with the hospitals and doctors to offer their services. In some cases, your out-of-pocket expenses can be a lot.

Medicare Plus a Supplement - To get Medicare with a supplement, you need to work through an agent. Remember, these agents are motivated by commissions, so be cautious. To have all your medical expenses covered, you can expect to pay another $125 a month in addition to the $110 a month more than you are paying. As you age, that cost can go up. The good news is that there are no co-pays and no paying 20 percent for CAT scans or other medical tests. If you have a lot of health problems, this can be beneficial for you. With this plan, you would need to buy a prescription plan separately.