CDISNM Blog
Like most seniors, there’s a good chance you’ve heard of Medicare – you may even know that it’s a federally funded health insurance program. But if you’re not enrolled, you may not understand in detail the different parts of the program and how they work together to provide health insurance coverage. If you’re approaching the age of 65 and interested in learning more about Medicare Part A and Part B, here’s some information to get you started.
Part A
Medicare coverage is divided into several parts, which are differentiated by letters of the alphabet. Medicare Part A is one of the basics, providing hospitalization coverage, including hospital stay, skilled nursing facility care, home health care (skilled nursing, physical therapy), and hospice care. For most people, Part A is premium-free, meaning there is no charge for coverage as long as you meet a few basic eligibility requirements. Generally, as long as you are a permanent resident of the United States and you or a spouse paid Social Security taxes while employed, enrollment is automatic. While Medicare Part A is free, there are deductibles and co-insurance that you are responsible for paying.
Part B
Medicare Part B covers expenses that are medically necessary to treat or prevent a disease or condition. Other fees that occur outside of room and board while in the hospital- those related to diagnostic testing, preventative care, and the supplies needed to diagnose or treat medical conditions. Fees for visiting the doctor are also included. Part B pays 80 percent of approved charges. The standard premium amount in 2024 is $174.70 (or higher depending on your income). However, most people who get Social Security benefits pay less than this amount. This is because the Part B premium increased more than the cost-of-living increase for Social Security benefits.
References:
www.medicare.gov
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Medicare Supplement insurance (also called Medigap) offers seniors coverage for out-of-pocket expenses associated with Medicare like copays and coinsurance, and even deductibles. The right plan adds to Original Medicare coverage, giving you peace of mind and confidence that when you need medical care, you can get it – no questions asked.
Medicare Supplement
Medicare Supplement insurance is a supplement to Medicare, meaning you’re still in the Medicare program, but have coverage for expenses that Medicare does not cover, like traditional out-of-pocket costs many seniors struggle with.
Eligibility Requirements
To join a plan, you must be enrolled in Medicare Part A and Part B. Medigap is a guaranteed issue, during your initial enrollment period, meaning even with medical complications, you cannot be turned down. Plus, if you continue to pay your premium on time, your plan is renewable, even if you develop health problems.
Choosing the Best Plan
Medicare Supplement plans in New Mexico are offered through private insurance companies. Plans are standardized, meaning a plan “A” offered from one company must provide the same minimum benefits as a plan “A” from another company. However, price does not need to be the same and there is great variance between companies on not only cost, but also, trustworthiness, dependability, and reputation. If you’re considering your options, be sure to consider reliability and affordability as important factors in choosing a provider.
References:
www.medicare.gov
www.bcbsnm.com
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Medicare Advantage (MA or Part C), is a popular alternative to traditional Medicare. Since 2010, enrollment increased by 71 percent, with as many as one in every three eligible seniors today choosing a Medicare Advantage plan over Original Medicare. Understanding this option is a critical step in managing health care into retirement.
Medicare vs Medicare Advantage
Medicare coverage includes hospital insurance (Part A) and medical insurance (Part B). While Part A is free for most people, Part B carries a monthly premium. Prescription drug benefits (Part D) are not part of Original Medicare but can be added for an additional monthly premium. While a good percentage of costs are covered, seniors are responsible for out-of-pocket expenses, like deductibles, coinsurance, and copays. Part C is offered by private insurance companies as an alternative way to receiving Original Medicare. With an MA plan, you receive Part A and Part B benefits, as well as additional benefits not covered by traditional Medicare. Most plans include coverage for prescription drugs, as well as dental, vision, and in some cases, even hearing. Unlike Original Medicare, with Medicare Advantage, you are limited to doctors and hospitals that are part of a specified network. Networks can be large, or narrow depending on where you live and a referral may be needed to see a specialist.
Extra Benefits
While plans must cover all of the services offered through Part A and Part B (except hospice care), most offer more. Many provide comprehensive coverage—Part A, Part B, preventive dental, eye care, hearing assistance, wellness programs, and prescription drug coverage too. If you need new eyeglasses or simply want to explore your options with dentures, an MA plan may be the solution. Plus, plans always cover emergency and urgent care. They even offer emergency services outside of the plan’s service area (but not outside the U.S.). Medicare Advantage has grown significantly in the past few years, and now covers 31 percent of the 57 million people on Medicare. An easy way to secure Part A, Part B, and a few extra benefits. Part C is an all-in-one solution—hospital, medical, vision, dental, and prescription drug coverage.
Good Deal?
With comprehensive benefits and low premiums, Medicare Advantage sounds like a great deal. After all, putting together a similar plan using traditional Medicare would mean adding a prescription drug premium and maybe even Medigap to shoulder out-of-pocket costs. However, it’s important to look at your needs carefully to decide if Medicare Advantage makes sense for you.
Things to Consider
Network Availability Medicare Advantage may be a good option if the network includes providers you already use. Look carefully at which doctors are in the plan’s network, and whether or not you need a referral to see a specialist.
Out-of-pocket Expenses For those in good health who don’t expect to visit the doctor’s office or hospital regularly, Medicare Advantage can be a great asset, offering additional benefits at a low cost. If, on the other hand, you will be visiting the doctor frequently and expect to have many copays, traditional Medicare supplemented with a Medigap plan can help with expenses.
The Bottom Line
Medicare Advantage is a great option for seniors looking for comprehensive care at an affordable price. As long as you can work within the network model, and won’t be needing a lot of specialized care, an MA plan may be a good deal.
References:
Medicare Advantage Stats: http://www.kff.org/medicare/issue-brief/medicare-advantage-2017-spotlight-enrollment-market-update/
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Original Medicare (Part A and Part B) does not include benefits for prescription drugs. While you are not required to have drug coverage if you need it, there are only two ways to get it—purchase a standalone Part D plan or get it as part of a Medicare Advantage plan. Enrollment in Part D is voluntary, unless you receive benefits from Medicaid, in which case, you are enrolled automatically.
Costs
If you choose to purchase a plan separately to add to your Medicare coverage, you should expect to pay for a few different things.
Monthly Premium. There is a monthly premium for drug benefits that are in addition to your Part B premium. The exact amount varies and is based on the plan you choose. High-income Medicare beneficiaries can also expect to pay an income-related monthly-adjusted amount, in addition to the premium. However, most seniors pay only the standard premium. If you do not sign up for Part D coverage when you are first eligible, you may have to pay a late enrollment penalty.
Deductible. In addition to a premium, most plans include a yearly deductible. The good news is, that there is a maximum deductible amount—a limit to how much you pay out-of-pocket before your Medicare drug plan starts contributing. Note: some Part D plans offer “first dollar coverage”, meaning you do not pay a deductible, and coverage starts immediately.
Copayments and Coinsurance. While your plan will likely pay for a good amount of your medications, you are responsible for the remaining amount, which is called copayment or coinsurance. Medicare standards ensure that copayments are no more than 25 percent of the full cost of a prescription, and plans are required to pay no less than 75 percent. In some cases, copayments are waived completely.
Copayments for prescriptions may be waived if:
You live in a long-term care nursing facility and are enrolled in both Medicare and Medicaid.
Your plan waives the copayment for certain drugs.
Your pharmacy opts to waive the copayment for specific drugs.
Coverage Gap
The coverage gap is a little different. Once you and your plan reach a predetermined amount for prescription drugs, you enter the coverage gap, or “donut hole”. Medicare stops paying while you are in the gap, leaving you responsible for 100 percent of your medication cost. However, once you reach catastrophic levels, Medicare pays for 95 percent of your medication cost.
Need to Know
Understanding the costs surrounding Part D coverage can be complicated. Here is an easy summary with just the facts.
Enrollment is voluntary unless you receive Medicaid benefits.
There are only 2 ways to get prescription drug benefits: a Part D plan or Medicare Advantage.
Plans include a monthly premium, deductible, copayments, or coinsurance and costs while in the donut hole.
Remember, different Medicare drug plans have different rules. Some require prior authorization from your doctor before certain medications can be filled. Others impose limits on how much medication you can get at one time. In some cases, certain plans require you to try lower-cost drugs before a prescribed drug will be covered. In addition, each plan’s formulary, or list of covered drugs may be different. Be sure to look carefully at the plan you choose to make sure any medications you use regularly are on the list and your preferred pharmacy is a participating pharmacy.
References:
https://www.medicare.gov/part-d/costs/part-d-costs.html
https://www.medicare.gov/part-d/coverage/rules/drug-plan-coverage-rules.html
https://www.medicare.gov/sign-up-change-plans/get-drug-coverage/get-drug-coverage.html
http://www.kff.org/medicare/fact-sheet/the-medicare-prescription-drug-benefit-fact-sheet/
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9 to 12 months before you turn 65
Confirm that you are eligible to receive Medicare benefits by calling the Social Security Administration at 800.772.1213.
Review your current health insurance policy to find out what happens with that coverage when you turn 65.
Research options for coverage to help protect yourself from costs not included in Medicare coverage.
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4 to 8 months before you turn 65
Become familiar with Medicare parts: A, B, C, and D.
Ask your doctor if they accept Medicare or participate in other Medicare plans.
Sign up for coverage to help protect yourself from costs not included in Medicare coverage.
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1 to 3 months before you turn 65
Enroll in Medicare Parts A and B – if you do not receive your automatic enrollment information in the mail, contact the Social Security Administration at 800.772.1213.
Sign up for Social Security if you have decided to take early Social Security benefits (Note: it usually takes three months after you sign up before you begin receiving benefits).
If your spouse and/or dependent are covered under your employer’s plan, make arrangements for him or her to have coverage after you have Medicare.
Happy 65th Birthday!
If you have not received your Medicare card in the mail, call the Social Security Administration at 800.772.1213.
Make sure your physician’s office has a copy of your Medicare Card and any supplement plan you may have signed up for.
References:
https://www.medicare.gov
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