It may seem at first that Medicare is complicated, but once unraveled, you too will find Medicare is Simple.
What is Medicare?
The government created Medicare to help our retirees with their health care needs. It started with hospital and doctor visits, but has grown to provide full, affordable coverage to millions of people today.
What are the different parts?
Medicare is broken into four different parts to provide flexible coverage to fit everyone’s needs and budgets. We will examine each part more closely, but let’s take some time to review the basics.
Medicare has 4 parts, A-B-C & D. Let’s start with Parts A and B, known as original Medicare.
Part A generally covers procedures that require an overnight stay in a facility. This can include hospital stays, skilled nursing facilities, and oddly enough, hospice care.
Part B covers doctor visits and outpatient care. Think of Part B for things that do not require an overnight stay like visiting your doctor when you are sick, getting an X-ray or an MRI, chemotherapy and radiation treatments, and lab services.
Part C is Medicare Advantage, which combines Part A and Part B benefits into one plan offered by private insurance companies. Most include prescription drug coverage and may offer additional benefits like dental, hearing and vision.
Finally, there is Part D that covers prescription drugs. Part D may be offered as a stand-alone plan or may be included as part of a Medicare Advantage plan.
What is right for you?
Well that depends on your needs. A plan that works at 65 might not be perfect at age 70. We’ll review your health and drug plan options and customize a plan that is right for you.
To learn more about Medicare, contact a Licensed Sales Agent at email@example.com.
When can I enroll in Medicare?
There are three periods of time that are available to enroll in Medicare. They are known as the Initial Enrollment Period, the General Enrollment Period and a Special Election Period.
Most people enroll during the initial enrollment period, or IEP for short. It is 7 months long and starts 3 months before your 65th birthday, includes your birthday month, and continues for 3 months after your birthday month. During your IEP you may enroll in Part A, Part B, or both. Or, you may choose to enroll in a Medicare Advantage plan or a prescription drug plan.
There is also a General Enrollment Period for those who missed their IEP. This period happens every year between January 1st to March 31st.
And finally, there is a Special Enrollment Period (SEP) for those who work past age 65. During your SEP, you may enroll in Part A, Part B, or both without penalty for up to 8 months after the month your health insurance coverage ends.
Keep in mind, penalties may apply if you enroll late. Make sure you know your enrollment period dates and what your options are. To learn more, check out our video on Late Enrollment Penalties.
Is Medicare enrollment automatic at age 65?
No, unless you are already receiving Social Security benefits. Many people have elected to defer Social Security benefits. In that case, to enroll in Medicare at age 65, you can enroll yourself at your local Social Security office.
When can I change my Medicare plan?
Generally, there are three time periods when you can change your Medicare plan.
The most common is known as Annual Enrollment Period which occurs from October 15th to December 7th each year. During this time, you can join, switch, or drop a Medicare Advantage Plan or prescription drug plan.
Next is the Special Enrollment Period when you can join, switch, or drop a Medicare advantage or prescription drug plan outside of the annual enrollment period. It generally lasts two months after the month of a qualifying event; such as, when you move or when you lose other creditable coverage, like an employer group health plan.
There is also the Medicare Advantage Dis-enrollment Period between January 1 and February 14th each year. During this period, you may drop a Medicare Advantage plan and return to Original Medicare, Parts A and B. And, you may also enroll in a prescription drug plan, Part D.
Starting in 2019, there will be a new enrollment period from January 1st to March 31st when you can switch your Medicare Advantage plan to another Medicare Advantage plan; or return to Original Medicare and enroll in a prescription drug plan.
To learn more about enrolling in Medicare, contact a Licensed Sales Agent at firstname.lastname@example.org.
Medicare Part A
Part A (hospital insurance) generally covers procedures that require an overnight stay in a Medicare-approved facility. Part A, along with Part B, is part of Original Medicare which is administered by the Centers for Medicare and Medicaid Services.
What does Medicare Part A cover?
- A semi-private room
- Hospital meals
- Skilled nursing services
- Special unit care such as intensive care
- Drugs, medical supplies, and medical equipment used during an inpatient stay
- Lab tests, x-rays, and medical equipment as an inpatient
- Operating room and recovery room services
- Some blood transfusions in a hospital or skilled nursing facility
- Inpatient or outpatient rehabilitation services after a qualified inpatient stay
- Part time, skilled care for the home bound
- Hospice care for the terminally ill, including medications to manage symptoms or control pain
What doesn’t Part A cover?
- Personal expenses while hospitalized
- Custodial care for assistance with daily activities like eating and bathing
- Care provided outside of the United States
- Days spent in psychiatric care beyond certain limits
- Hospital days beyond certain set limits per benefit period
What do you pay for Part A coverage?
You do not pay a premium if you, or your spouse, have 40 quarters, or 10 years, of Social Security contributions. If not, you will owe an income-based monthly premium.
In 2018, Part A does require a $1340 deductible per benefit period. A benefit period begins the day you are admitted to a hospital and 60 days in a row after you have been released. Should you have to return to the hospital during the 60-day period after release, it will be considered the same benefit period and a new deductible will not be charged.
There is no co-pay for hospital stays up to 60 days in one benefit period; however, stays lasting 61-90 days have a co-pay per day. Beyond 90 days, there also 60 lifetime reserve days for hospital stays. These can be used only once and may be applied to different benefit periods.
Finally, there is no co-pay for the first 20 days at a skilled nursing facility following a 3 day hospital stay, but there is a co-pay for days 21-100.
Medicare Supplement insurance, or Medigap plans, help cover some of the expenses not paid by Part A. Contact us today to find a Medigap that is right for you.
To learn more about Medicare Part A, contact a Licensed Sales Agent at email@example.com.
Medicare Part B
Medicare Part B is medical insurance. It is one part of what’s often called Original Medicare, which is administered by the Centers for Medicare and Medicaid Services. Medicare Part A (hospital insurance) is the other part.
Medicare Part B helps pay for healthcare services you receive in a clinic or hospital as an outpatient. Part B also covers most doctor services you receive as a hospital inpatient. Part A covers most other hospital services.
What Does Medicare Part B Cover?
Medicare Part B covers doctor visits and most routine medical services. It also covers some preventive care, like flu shots.
Other examples of what Part B covers include:
- Outpatient medical services
- Clinical lab services, like blood and urine tests
- Diagnostic tests like X-Rays, MRIs, CT Scans, EKGs
- Durable Medical Equipment such as wheelchairs or diabetic testing strips
- Emergency Room services
- Home health services for homebound people on a part-time or intermittent basis
- Mental health care as an outpatient
What Does Medicare Part B Cost?
Medicare Part B shares some costs with you when you see the doctor or use other medical services. In 2018, Part B charges a $183 deductible and 20% coinsurance of all remaining charges during the year.
Part B also charges a monthly premium which is based upon your income. The payment is deducted from your monthly check if you receive Social Security benefits. Otherwise, you need to send a monthly premium payment to Medicare.
To help pay for the Part A and B deductible and coinsurance out of pocket, you should consider enrolling in a Medicare Supplement plan, often referred to as a “Med Sup” or “Medigap” plan. Some Med Sup plans will pay the entire deductible and coinsurance cost which gives 100% coverage for Medicare-approved services. To learn more, be sure to watch our Med Sup video.
To learn more about Medicare Part B, contact a Licensed Sales Agent at firstname.lastname@example.org.
Medicare Part C: Medicare Advantage
Medicare Part C is also known as Medicare Advantage. Medicare Advantage plans combine Part A and Part B into one plan.
Medicare Advantage plans contract with a network of doctors and hospitals to provide care for their plan members, like an HMO or PPO. And, like those plans, they may require you to choose a primary care physician to manage your care.
One advantage to a Medicare Advantage plan is the convenience of having your health and drug benefits provided by one plan, instead of enrolling in separate plans with additional premiums. Such benefits include dental exams, cleanings, x-rays, routine vision care, hearing tests and hearing aids, wellness programs and fitness memberships.
How do I enroll in a Medicare Advantage plan?
You must be enrolled in Parts A & B and live in the plan’s service area to enroll in a Medicare Advantage plan.
How much does Medicare Advantage cost?
You must continue to pay your Part B premium. Some Medicare Advantage plans feature a $0, monthly premium, and some may charge a small monthly premium. Some plans may charge a deductible, but most plans operate on a co-pay basis.
For example, you may have a $0 co-pay for a preventive care checkup, and you may have a $10 co-pay for a sickness office visit. After you reach your plan’s maximum out of pocket, your plan pays all your covered costs for the rest of the year.
Why use a Medicare Advantage plan?
Medicare Advantage plans focus on health and wellness. The care you receive is coordinated with network doctors to help you live a healthier lifestyle and keep you from getting sick.
How do you know which plan is right for you?
Make sure your preferred physicians and current prescriptions are included in the plan. Compare the coverage and cost available with original Medicare combined a Medigap policy vs. Medicare Advantage plans.
To learn more about Medicare Part C and Medicare Advantage Plans, contact a Licensed Sales Agent at email@example.com.
Medicare Part D
Part D of Medicare provides prescription drug coverage. You can get this coverage with a stand-alone prescription drug plan or with a Medicare Advantage plan that includes prescription drug coverage. Both options are offered by private health insurance companies.
The types of drugs most commonly prescribed are covered by Part D and determined by federal standards. Specific brand name drugs and generic drugs are named in the plan’s formulary.
What is a formulary?
A formulary is a list of drugs covered by a plan. Each plan may choose the specific brand name and generic drugs to be offered on its formulary, but Medicare sets guidelines for the types of drugs to be covered.
In addition, drug plans feature a tiered formulary based on cost. In general, drugs on lower tiers cost less and the drugs in the higher tiers cost more. Some drug plans may charge a deductible which may apply to all tiers or only to certain tiers.
Tips to get the most value from your drug plan:
- Know the Formulary
Making sure your drugs are covered by the formulary is very important. Choosing a plan without considering the formulary is by far the biggest mistake people make, which results in hundreds or even thousands of dollars being spent to purchase drugs not covered by the formulary.
- Consider Generics
When you schedule an appointment to visit your doctor, be sure to take your formulary directory with you. Ask about generic or low-cost options if your drug is in a high tier or is too expensive.
- Use Mail Order
Most drug plans offer savings when you order a 3 month supply at once, not to mention the convenience mail order offers.
- Use a network pharmacy
Most drug plans offer a preferred pharmacy network to help reduce the cost to purchase your prescriptions. You may use just about any pharmacy, but using a preferred pharmacy may be a better choice.
- You may qualify for assistance
Medicare offers a program for people with limited incomes who need help paying for Part D premiums, deductibles and co-pays.
What do you pay for Part D?
What you pay depends on many things such as the premium. Some plans may charge a deductible. You will also pay co-pays which vary based on the plan’s formulary tiers. High-cost prescriptions may require you to pay up to a 33% coinsurance.
Keep in mind that just because a plan may feature a low monthly premium, this plan may not be suitable for your prescription list. Don’t forget the formulary list. If you pick a formulary that does not cover your drug, you will pay the retail cost – this is the biggest mistake people make.
To help you determine your lowest “True Out of Pocket” – a combination of your plan premium PLUS the cost to purchase your prescriptions - we use the Medicare website. Your hometown may offer 50 or more drug plan options, so how do you know which plan will offer the lowest true out of pocket? Why take a chance? Let us do this for you and avoid making the wrong choice.
Finally, drug plans may change from year to year. Formularies may change, drug tiers may change, and the premiums may change. Be sure to get a “Drug Plan Checkup” each year. You may switch your drug plan each year between October 15th through December 7th.
To learn more about Medicare Part D, contact a Licensed Sales Agent at firstname.lastname@example.org.
What is a Medicare Supplement plan?
Keep in mind that Medicare has four parts: A, B, C and D. But did you know there are also Medicare “plans”. Knowing the difference between “parts” and “plans” is helpful when learning the basics of Medicare.
A Medicare supplement plan, often referred to as either a “Med Sup” or “Medigap” plan, is designed to help pay for some of the out-of-pocket costs not paid by Original Medicare.
There are 10 different plans, each labeled by a letter. These plans are standardized and offer the same benefits by plan letter. Keep in mind, not all plans may be available in your area.
What benefits could be covered by a Medicare Supplement plan?
Medicare Supplement plans can help pay for your Part A and B deductibles, co-pays and co-insurance. Some plans may cover foreign travel emergencies which are not covered by Parts A or B. Keep in mind, these plans vary in coverage. Therefore, shopping for a plan that meets your risk tolerance and budget is a big decision.
For a list of items covered by a Medicare supplement plan, contact us for a complimentary publication titled “Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare”.
What might not be covered by a Medicare supplement plan?
Medicare does not cover long-term care. In fact, Medicare was designed to take care of acute care, or for care generally less than 90 days. Also, Medicare does not pay for routine dental exams, cleanings or x-rays. Medicare does not cover the cost of eye exams, or hearing exams, either. If these are concerns for you, don’t count on a Medicare Supplement plan to help pay for these expenses.
What do you pay for a Medicare supplement?
The level of coverage and the premium you pay varies by plan. As a general rule, the more comprehensive the coverage, the higher the premium. Premiums vary widely from one insurance company to another even if they offer the same benefits. One important thing to keep in mind is that premiums may go up each year, some quicker than others. Buying a plan based on the initial premium is important, but considering what the premium may be in 5 to 10 years is more important.
Contact a Licensed Sales Agent at email@example.com for a no obligation, Med Sup quote.