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Is Your Medicare Policy Adequate?

May 22, 2024

While we all hope it's something that will never affect us personally, cancer is a worry to all who are impacted by it. Along with the anguish of being diagnosed with cancer, many patients are also hit with major medical bills for cancer treatment. The single most significant risk for developing cancer is age, with half of all cancer diagnoses occurring above age 651. Age and cost are critical to keep in mind when creating a secure retirement strategy and healthcare plan. And, with Medicare being the primary source of healthcare in retirement, it's vital to understand the cancer treatment options and plans available through Medicare.

Parts A & B: Medicare Part A includes hospital stays after the $1,600 ($1,632 in 2024) deductible for each benefit period. Patients hospitalized longer than 60 days pay $400 ($408 in 2024) coinsurance per day. After 90 days, it's $800 ($816 in 2024) per lifetime reserve day. The patient pays all costs once the 60 lifetime reserve days are used. Because many chemotherapy drugs are administered in a clinic or treatment center, Medicare Part B usually covers 80 percent of their costs after a $226 ($240 in 2024) deductible. If you have Medicare Parts A and B alone, there is no out-of-pocket maximum for these expenses.2

Part D: This plan typically covers oral cancer drugs, those that can't be given through an IV – after a deductible that can't exceed $505 ($545 in 2024)3. Standard plans have either copayments or coinsurance charges and a coverage gap after $4,660 ($5,030 in 2024) when patients pay higher percentages until they reach catastrophic coverage once prescriptions total $7,400 ($8,000 in 2024)4. There is no maximum out-of-pocket under Part D.

Medigap: Medicare beneficiaries with Parts A and B often purchase a Medigap supplement policy to limit out-of-pocket costs. Gaps such as deductibles, coinsurance, and copayments can total tens of thousands of dollars each year for a cancer patient. Medigap plans cover the cost-sharing gaps of Original Medicare (Parts A & B). While coverage varies from plan to plan, most doctors accept regular Medicare, and providers who do are required to accept any Medigap plan5.

Medicare Advantage: Other beneficiaries choose a Medicare Advantage plan, Part C, which combines Parts A and B and usually a drug plan in a private policy. Many plans have a required or preferred network of doctors and providers, which may limit the specialists you can see during cancer care. Advantage plans have maximum out-of-pocket limits.6

While it's not a pleasant topic to prepare for, planning for potential healthcare expenses, including cancer treatment, has never been more critical. Whether you're retired or still working, we can help you find the best vehicles to put money aside for healthcare

5Who Needs Medigap Insurance? (