Having medical coverage is an essential part of living. Without it, many people would not have access to medical care or be able to pay off medical bills, which tend to be very high.
Health insurance is a basic need for every human but shopping for a plan can be daunting, preventing people from choosing the right one.
Below is everything you need to know about what Medicare and private insurance are, what they cover, how much they cost, and how they compare, so you can feel at peace while shopping for a plan that’s best for you.
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What is Medicare?
Medicare is a federal health insurance program offered to a select few groups. It provides coverage for individuals over 65, younger people with disabilities, or individuals with End-Stage Renal Disease (ESRD).
What Does Medicare Cover?
Medicare works in parts, meaning different parts cover different services. These parts include Part A (hospital coverage), Part B (medical coverage), and Part D (prescription drug insurance).
- Part A: This part covers any instance where you visit a hospital or for in-hospital stays, hospice care, or care from a nursing facility.
- Part B: Typical coverage for medical services such as doctor visits, preventive services, medical supplies, and outpatient care.
- Part C: Medicare allows policyholders to receive additional coverage through private insurers, so you get more benefits.
- Part D: Covers the cost of prescription drugs and sometimes shots or vaccines.
Original coverage plans cover Part A and Part B services, but if you want additional drug coverage, that will need to be added separately. This type of plan covers everything stated above, but there will be some costs like your premium and deductible.
Medicare Advantage plans are different from original coverage plans, as they are offered through a private company and offer Parts A, B, and D with some additional benefits (in some cases).
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What Are the Advantages?
Medicare plans provide coverage to nearly 64 million Americans, giving them financial relief for medical bills. Medicare is important to older Americans and people with disabilities, as it provides them with many advantages.
Some of these advantages are:
- It’s cheaper than private medical coverage
- Provides coverage for medical visits, hospital, and outpatient care
- Is useful for people who don’t have any dependents
- Has a premium-free Part A meaning you won’t pay a monthly premium for hospital services
- Accepted by a large number of physicians and hospitals
Medicare plans typically cost less than private insurance, especially if you don’t have many doctor visits.
What Are the Disadvantages?
With medical coverage, there are bound to be some things that aren’t covered. The good part about Medicare is it’s a slightly cheaper option, but you would be trading more coverage.
Here are some disadvantages associated with Medicare plans:
- Does not cover prescription drugs (unless you add Part D to your plan)
- Does not include vision, dental, or hearing coverage
- High out-of-pocket costs
While Medicare provides coverage for many Americans and has a broad range of acceptance among providers, it doesn’t provide the best or most coverage. So, you may want to consider what you want to be covered before shopping for a plan.
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What is Private Insurance?
As opposed to buying health insurance from the government, you can get it from private health insurance instead. Private health insurance companies can offer a wide variety of plans: short-term plans, dental and vision insurance, family plans, employer-sponsored plans, and more.
What Does it Cover?
The number of services covered depends on the type of insurance plan you purchase. Any coverage under Medicaid or Medicare may also be under private health insurers. In general,
What Are the Advantages?
Private insurers can be a great option for people who need coverage for dependents and for anyone who does not qualify for government programs. Private coverage also comes with a few neat benefits.
These benefits include:
- Provides ideal coverage for people with dependents
- Can provide a broader area of coverage than Medicare
- Most companies have an out-of-pocket limit (providing more financial relief for you)
Privat insurers are good for anyone who has people counting on them for insurance and those needing additional coverage.
What Are the Disadvantages?
Private insurers do have a lot of perks, but there are also a few disadvantages.
These disadvantages include:
- It’s cheaper than private medical coverage
- Provides coverage for medical visits, hospital, and outpatient care
While there are some downsides to this type of plan, most of the advantages outweigh the disadvantages. So, make sure you look at what your personal needs are before buying a plan.
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How Do They Match Up?
Deciding to get either Medicare or private insurance can be overwhelming, but is it necessary so that you can have the coverage you need.
Picking one of the two will depend on your situation, what you need, and what you qualify for. So here are a few ways that private insurance and Medicare match up.
Premiums
With Medicare, people typically don’t have to pay a monthly premium for Part A. If you don’t qualify for a free premium, then you’ll pay between $274-$499. But you will usually pay one for Part B, Part C, and Part D plans. Monthly premiums average around $170 for Part B and the cost for Part C and D will vary based on the plan you purchase.
If you obtain one through your employer, premiums plans with private insurers can be lower. On average, a premium with an employer costs around $108, with most people paying around $5,969 for family coverage after what the employer covers.
Out-of-Pocket Costs
Medicare does not have an out-of-pocket limit, meaning there’s no limit to how much you pay out of your pocket. Most private insurers do limit how much you would need to pay out of pocket, and once you reach that limit, they pay the rest.
Out-of-pocket costs for Medicare typically include:
- Deductibles
- Co-pays
- Premiums
For Medicare, the out-of-pocket limits are around $8,700 for an individual and $17,40 for a family.
Coverage
Private insurers can cover more things than what Medicare offers. For example, Medicare doesn’t provide coverage for dental, vision, or hearing (unless you buy the Medicare Advantage plan). So, if you are needing those services, then choosing a private insurer may be the way to go.
Medicare provides basic coverage for medical visits, hospital visits, hospice care, and prescription drugs (only if you have Part D). So, it is a bit limited when you consider dental, vision, and hearing.
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FAQs
How much does Medicare cost?
The costs of Medicare vary based on the plans you purchase and your age, gender, and health. Monthly premiums tend to be around $170 with people paying in the upper $4,000s for yearly coverage. You can use an online calculator on the website to find out what your estimated premium would be.
How much does private insurance cost?
The cost of a private insurance plan will depend on different factors such as age, health, location, and type of plan. Private insurers may be more expensive than Medicare, but it tends to provide better coverage.
Who is eligible for Medicare and how do I get it?
People who are eligible for a Medicare health plan are over the age of 65, under the age of 65 with certain disabilities, or are individuals with End-Stage Renal Disease. To figure out if you qualify for Medicare, check out their website.