Understanding Your Medicare Options

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Understanding Your Medicare Options

Medicare health care insurance for those 65 and up may be provided directly from the federal government, or through a government-approved private insurer.  

 

This is the general breakdown of Medicare insurance coverage options:

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Hospital Care


(hospital, short-term skilled nursing, ambulance, hospice, home health)

Medical Care


(outpatient, doctor visits and preventive care, medical and lab services, equipment and supplies)

Private A&B 


(Part A and Part B (provided by a private insurance company instead of the government  called “Medicare Advantage”)

Prescription Drug Coverage 
 

Medicare Advantage
Medicare Supplement
Prescription Drug Plans available for comparison 

  • Aetna

  • Anthem

  • Centene/WellCare

  • Cigna

  • Humana

  • Mutual of Omaha

  • SilverScript

  • United HealthCare

Part A and Part B
Part A and Part B is offered from medicare.gov and is known as “Original Medicare.” Generally, Original Medicare pays 80% of Part A and Part B costs. Individuals are responsible for paying deductibles, copays, and Part B premiums which are generally withdrawn automatically from social security checks.

 

Individuals are responsible for the other 20% of costs and many people choose to purchase a Medicare Supplement policy, also known as Medigap, from a private insurance company to cover those costs. Individuals on Original Medicare must also select a Part D prescription drug plan.

 

On Original Medicare, individuals are not limited to what doctors or facilities in the country that they can use, as long as Medicare is accepted. Original Medicare does not have a cap on annual out-of-pocket expenses for the covered individual.

Selecting a Medicare Supplement Policy
Medicare supplement plans are designed to help pay for out-of-pocket costs that are not paid by Original Medicare. Plan premiums, eligibility, and coverage will vary. Shop for a plan with benefits that fit your individual needs. Then compare monthly premium prices and deductibles across companies with similar coverage.                            

Part C
Medicare Advantage” is a privately-managed plan which covers Part A and Part B of Medicare through a private insurance company and not through the government. These companies are contracted through the government to provide the services and a Medicare Advantage plan replaces an Original Medicare plan. No Medicare Supplement policy is needed with a Medicare Advantage plan.

 

The private version pays 100% of covered costs, but not all expenses are covered. Individuals are required to use in-network doctors and facilities or pay out-of-pocket. Individuals must also continue to pay Part B premiums which are generally withdrawn automatically from social security checks. Sometimes Part D prescription drug coverage plans are included in Medicare Advantage plans; if not, individuals must select a Part D plan from another provider.

 

Many Medicare Advantage (Part C) plans may include vision, hearing and dental coverage not offered by Original Medicare (Parts A & B). And Medicare Advantage plans are required to have an annual maximum cap on out-of-pocket costs. You won't pay anything for covered expenses after you reach that amount.

Selecting a Privately Managed
Medicare Advantage Plan

If you choose to use a private Medicare Advantage plan, it is imperative that you compare policies. Some have zero ($0) premiums, which sounds good up front but may mean limited covered services or higher deductibles later. If you want to keep your doctor, you need to verify your doctor is in-network. The same for a hospital or other facility preference.

***Don’t confuse a Medicare Supplement plan with a Medicare Advantage plan. A Medicare Supplement plan from a private insurance company supplements Original Medicare. A Medicare Advantage plan replaces Original Medicare and puts you in the hands of a private company.

Part D
This helps pay for Prescription Drug Coverage. You will select a Plan D whether you have Original Medicare or Medicare Advantage. 

Selecting a Prescription Drug plan
Not all plans are equal, so it's important to make sure to compare your exact medications and dosages between plans. A prescription Part D plan may be offered within a Part C Medicare Advantage plan, or it may be selected. Prescriptions are divided into tiers, and different plans categorize and reimburse the same drugs differently. Most Part D plans have preferred pharmacies which may offer better prices. Pharmacies are listed as Preferred Cost or Standard Cost.                                                    

Enrollment Periods           

Initial Enrollment Period

The initial enrollment period for Medicare begins three months prior to the month you turn 65 and lasts until the end of the third month after your birthday month. Failure to sign up during the initial enrollment period might result in permanently higher premiums unless you qualify for a special enrollment period (SEP-see below). 

 

If you don’t sign up during the initial window, you can sign up January 1-March 31 each year for coverage that begins on July 1. 

 

Open Enrollment Periods

The open enrollment period for Medicare Advantage and prescription drug coverage each year is October 15-December 7. There is also a new annual Medicare Advantage open enrollment period, from January 1 to March 31, during which you can switch to traditional Medicare from a Medicare Advantage plan and join a Medicare prescription drug plan to add drug coverage.

Special Enrollment Period (SEP)
If you are still covered by a group health plan provided by your employer (or your spouse’s) when you turn 65, you may qualify for a special enrollment period. In general, the SEP requires that you enroll in Medicare no later than eight months after your group health plan or the employment on which it is based ends (whichever comes first). NOTE: If your group health plan or employment ends during your initial enrollment period, you do not qualify for a SEP.

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