The A, B, C’s and D of Medicare
Are you about to enroll in Medicare, but you have little or no idea what to expect or what to do? You’ve heard of supplements, advantage plans, deductibles, Part C, Part D, premiums, penalties and the often feared, but rarely understood, “DONUT HOLE”! If all this confuses you, or if you would just like to learn more about Medicare, please read on.
First, some housekeeping notes: The Social Security Administration, the Department of Health and Human Services and the Centers for Medicare & Medicaid Services (CMS) are federal agencies all involved in Medicare. When you receive information from them, READ IT! If you don’t understand it, call them or call your Medicare insurance specialist. Unfortunately, much of the mail you receive is advertising so look for official government logos or letterheads before you give out any personal information. With that, let’s get started.
Your Medicare card lists you as the beneficiary and, in most cases, lists parts A & B followed by the date each part became effective. Currently, Medicare has four parts: original Medicare consists of Part A and Part B, hospital and medical respectively, Part C is Medicare Advantage, and Part D is prescription drugs. Your best resource for detailed information about Medicare is the official U.S. Government Medicare handbook, Medicare & You. Published each year, it is well written and easily understandable.
Medicare, however, does not pay for everything. Your Original Medicare includes co-insurance and deductibles that you will have to pay unless you choose to enroll in an additional plan that will pay some of those costs. Most frequently, people choose either a Medicare Supplement or a Medicare Advantage Plan. Both have their pros and cons, but you should never be enrolled in both plans at the same time. Let’s look at each in more detail.
Supplements, also known as Medigap insurance, are private insurance company products and will pay after Medicare pays its portion. In Wisconsin, supplements include the basic benefits and five additional riders that can be added to the plan if you choose. The riders include: payment for the Part A deductible, Part B deductible, Part B excess charges, home health care and foreign travel. Adding riders to your plan increases the cost, but might be necessary to meet your needs. Supplements do not come with drug plans so you will want to explore the options for creditable drug coverage.
Medicare Advantage Plans, known as Medicare Part C, are Medicare Health Plans offered through a private insurance company that has a contract with Medicare. These plans, which sometimes include a drug plan, pay a portion of the claims whereas you may have to pay co-pays or co-insurance. Some Medicare Advantage Plans offer additional benefits such as health club memberships, eye exams, dental coverage, etc. Furthermore, companies offer different types of Medicare Advantage Plans and these vary from county to county within a state. Selecting the right plan for you can be complicated so choose an agent who specializes in both Medicare Supplements and Medicare Advantage Plans and be sure to check out your options.
Medicare Part D, covers prescription medications and determines coverage based on a drug list called a formulary. Drugs are placed in tiers, the higher the tier the higher the co-pay. The coverage gap, or donut hole, comes into play when an individual’s retail drug costs reach a specified amount. It is very important to keep track of the retail costs of your drugs, because in the coverage gap you can expect to pay considerably more for your drugs. Most people do not reach the coverage gap, so count on your agent to help you understand this part.
In summary, Medicare Part A (Hospital) probably comes to you with no premium because you worked enough quarters to receive the benefits at no additional cost. Part B (Medical) however, usually requires a monthly premium that is either billed to you or, in most cases, deducted from your Social Security check. Nearly everyone takes Part A, but some people delay taking Part B because they are better off with their employer’s health coverage or some other form of coverage. Nothing is cast in stone and many exceptions exist so work through this with an agent.
And remember, Medicare Supplements fill in the gaps of Medicare and pay after original Medicare pays. On the other hand, Medicare Advantage (Part C) covers all the benefits of Parts A & B, pays the claims and can sometimes include additional benefits as well as a Part D drug plan. Most importantly though, supplements and advantage plans are different and you do not need both.
Remember too, that some Medicare Beneficiaries do not need to purchase a Part D plan because they have other creditable cover such as, Veteran’s Administration drug benefits, state pharmaceutical plans, tribal or railroad benefits or even employer sponsored drug plans. In this case you might choose to keep that coverage and forgo the Part D. Your agent will help you sort this out and explain what creditable coverage means.
Believe it or not, we have just scratched the surface. Medicare’s four parts offer you, the beneficiary, a wide range of coverage, and spending time with a full-service Medicare insurance specialist can greatly enhance your chances of getting the most from your Medicare benefits.
Important Phone Numbers and Websites
Call 1-800-MEDICARE (1-800-633-4227), or visit www.medicare.gov and sign up at My.Medicare.gov to receive the most up-to-date Medicare benefits information.
Submitted by Stephen Sturtevant, Medicare Insurance Specialist, Neenah, WI For the Sturtevant & Assoc. Web site 2015