Understanding Medicare

The first of the Baby Boomers turn 65 in January, 2011.  Here is an overview of Medicare and your health care options. 

A health insurance program for people who:

Are 65 years of age and older, or
Under age 65 with certain disabilities
Have End-Stage Renal Disease (ESRD)
And, it was signed into law by President Lyndon Johnson in 1965
Medicare is administered by the Centers for Medicare & Medicaid Services (CMS)

New for 2011:
Beginning this year, the time period to switch plan coverage has been changed to:

1. November 15 to December 31 (AEP) only.  The change will be effective for January 1, 2011.

CMS has eliminated the Open Enrollment Period (OEP). 
CMS has implemented the Annual Disenrollment Period (ADP).  The timeframe is from January 1 through February 15.  A beneficiary may disenroll from an MA-PD to Original Medicare and a PDP.

Turning 65?

1. If you are already receiving Social Security benefits, you will automatically be enrolled into Medicare Parts A and B.
2. If you are not receiving Social Security, you will receive a letter from Social Security letting you know when and how to enroll.

Remember:

1. You don’t have to be retired
2. You are entitled to Medicare benefits even if you wait to receive 100% of Social Security benefits.
3. If you sign up for Medicare Part B after your seven month initial enrollment period (unless you have creditable coverage), your monthly Medicare premium will increase 10 % for every 12-month period that you were eligible for Medicare Part B but did not enroll.
4. Medicare Part D will assist you in paying for your prescription drug medications. If you aren’t qualified to receive an exception and delay signing up for Medicare Part D, you could be charged a penalty.

 Note:  If you currently receive health coverage through your employer, be sure to speak with your benefits representative about coverage after you turn 65.

Medicare is divided into four parts:

1. Part A Hospital
2. Part B Medical
3. Part C Medicare Advantage
4. Part D Prescription drug coverage

With Medicare Part A, you will have deductibles and co-pays; coverage includes:

1. Semi-private room
2. Meals
3. General nursing
4. Other hospital services
5. Supplies 

Your monthly Part B premium may automatically be deducted from your Social Security benefits.  You have a calendar year deductible and then generally pay 80% of the “usual and customary charges”.   Part B coverage includes:

1. Physician services
2.  Outpatient hospital care
3.  X-rays
4.  Diagnostic testing
5.  Durable medical equipment
6.  Laboratory services

Medicare Part C – a Medicare Advantage Plan -  is offered by private companies with a Medicare contract.  Part C benefits include:

1. Generally you receive all Medicare-covered services through the plan
2. Plan include prescription drug coverage
3. Benefits and cost-sharing may be different from Original Medicare
4. May receive additional benefits to Medicare such as:
1. Vision, hearing and dental
2. Fitness benefits
3. 24-hour nurse hotline

Medicare Part D - The drug benefit is offered through two types of private plans:

1. Medicare Advantage Plans (MA-PD)
2. Stand alone prescription drug plans (PDP)

Creditable coverage:  Drug coverage paying as much as or more than Medicare’s standard drug coverage.  These entities include:

1. A group health plan
2. Veteran or military coverage including TriCare

The costs vary by plan.

1. Part D Plan (PDP) - members may pay monthly premiums and an annual deductible (no more than $310) with co-payments or co-insurance.
2. Medicare Advantage with Part D (MA-PD) – usually has a benefit ($2840) which includes the member co-pay and the amount the health plan pays. 
3. New for 2011 - once the benefit amount of $2840 has been met, the beneficiary will now pay 93% for generic Rx and 50% for brand name Rx.

Once a member has met the $4,550 out of pocket amount (called catastrophic coverage), they will pay very little for future medications.

How Do I Obtain Extra Help for my Prescription Medications?

People with fewer assets or a lower income may be able to receive prescription medication assistance:

1. The federal government offers a Low Income Subsidy (LIS) that assists with the cost-sharing and premiums for Medicare Part D.
2. Financial assistance for deductibles and co-insurance costs through the Medicare Savings Program.

The frail elderly that need social, medical or long-term care can receive help in the PACE program, if available in their State.

 How much does Medicare cost?

1. Most people receive the Part A premium free once they have worked 40 quarters.  People with less than 40 quarters of Medicare-covered employment may still receive Part A, but will pay a premium. 
2. Part B has a monthly premium which can be deducted from your Social Security benefits.
3. Some Medicare Advantage Plans (Part C) may require a low monthly premium.
4. Part D – premiums and deductibles depend on the type of plan chosen.

Medigap Insurance

1. Sold by private insurance companies
2. Premiums involved
3. Cover “gaps” in Original Medicare
4. Follow Federal and state laws that protect you
5. Most states offer standardized plans

 

Decide What You Need

1. Actively investigate the different plans available in your area.
2. Ask your friends and family members about their coverage.
3. You can receive additional information online at www.medicare.gov, or call your State Health Insurance Assistance Program (SHIP).

For personal assistance, you may contact www.medicareful.com or www.maplanservices.com.

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