Medicare Options

What is Medicare?

Medicare is a federally administered health insurance program typically for those who are 65 years or older, those under 65 with disabilities, and those with End-Stage Renal Disease (ESRD).

Medicare has different parts that cover different services:

Medicare Part A – Is Your Hospital Insurance
Part A will cover you when you are admitted inpatient in a hospital, a skilled nursing facility, hospice, and some home health services.

Medicare Part B – Is Your Medical Insurance
Part B will cover you for certain services provided by a doctor, preventive services, medical supplies, and outpatient care.

Both Part A and B have deductibles and coinsurances. With Part A you have to meet the annual deductible, if you are admitted in a hospital facility from days 1-60 there is no coinsurance; after that there are fixed coinsurances for certain periods up to 150 days where you would be responsible for the full amount. Under Part B you must meet the annual deductible as well, and then after that you are then typically covered for 80% of your qualified expenses; you would have to pay the coinsurance for the other 20%. Having Original Medicare, which is just your Part A and B (your red, white and blue card), allows you to go to any provider that accepts Medicare in the United States; however, as stated above, you are responsible for the deductibles and the coinsurances of qualified services acquired; if not a qualified service, you may have to pay the full amount. Most preventative services are covered under Part B with no coinsurance to the beneficiary.

Part A and B do not cover prescription drugs, and therefore if you need prescription drug benefits you would have to purchase a separate prescription drug plan referred to as Medicare Part D. If you enroll in a plan that covers prescription drugs, you do not and in most circumstances cannot enroll in a separate prescription drug plan.

Medicare Part D – Prescription Drug Plans (PDP)
Part D plans are purchased in addition to paying for your Medicare premiums unless you get Extra Help from Medicare or Medicaid to cover those costs. You may purchase a PDP or Part D plan if you are entitled to Part A and/or Part B. Part D plans are purchased from private insurance companies that are regulated by CMS. Premiums, deductibles, co-pays, co-insurances, and coverage limits may apply. Failure to select a Medicare Part D plan or have credible prescription coverage as determined by Medicare can result in an ongoing penalty when you do decide to enroll in a Medicare Part D plan.


I have Medicare what are my options?

Great! You received your Medicare card, but what now?

Option 1: Original Medicare  + Prescription Drug Plan (PDP)

If you select Option 1 you are choosing Original Medicare, which will cover you for your hospital and your medical expenses (at the 80/20 share of cost), and you would purchase a separate PDP from a private insurance company. If you receive qualified prescription coverage from another source such as Veterans benefits, or an employer plan, you do not need to purchase a PDP and should not have to pay any penalties in the future.

Option 2: Original Medicare + Medicare Supplement + Prescription Drug Plan (PDP)

 

With Option 2 you are also selecting Original Medicare as in Option 1, but are also purchasing a Medicare Supplement or Medigap Policy. Medicare Supplements are private health insurance plans that help cover/supplement some of the the “gaps” that Original Medicare does not cover; such as co-pays, coinsurances, and deductibles. Medicare covers their portion of the approved/qualified services, and then the Medicare Supplement policy would pay the remaining share (depending on what plan you select). Medicare does not cover the costs of obtaining a Medicare Supplement, therefore, in addition to paying your Medicare premiums, you have to pay any premiums involved in the Medicare Supplement. Medicare Supplement policies are governed by federal and state laws. Most states require that the insurance companies offer a standardized Medicare Supplement policy; this means that no matter which insurance company you select, the benefits offered within each lettered plan should be the same basic benefits. Medicare Supplements are distinguished by different alphabetical letters (A, B, C, D, F, G, K, L, M, and N) and not all of them are offered by all the companies.

Medicare Supplement policies typically do not include prescription coverage. If the plan you select does not offer prescription drug coverage, and you do not have an alternative qualified drug coverage, you should also purchase a Prescription Drug Plan (PDP).

Because a Medicare Supplement policy just fills in the gaps that Medicare does not cover, you are still free to go to any provider that accepts Original Medicare.

If you are not in your Initial Election Period for Medicare Supplements, you may be required to undergo underwriting questions to determine eligibility and confirm premium amounts.

Option 3: Medicare Advantage Plan

Medicare Advantage plans are typically referred to as Medicare Part C. Medicare Advantage plans are administered by private insurance companies that are regulated by CMS, similarly to PDPs. With Medicare Advantage plans you receive your Medicare benefits through a plan you select from an insurance provider. Many providers offer different types of plans such as HMO, PPO, PFFS, and even some SNP plans for qualified individuals. By selecting a Medicare Advantage plan you do not lose your Medicare, you are simply choosing to have your benefits administered through the private company. Additionally, it is important to understand Medicare Advantage plans are required to offer you at least the same benefits as Original Medicare, however, especially with HMO plans, many times you will receive additional benefits as well (e.g. dental and vision benefits, gym/SilverSneakers, transportation, etc.).

Many Medicare Advantage plans offer prescription benefits built into it; in this case, they are referred to as Medicare Advantage Prescription Drug plans or MAPD. It is important to note that if the Medicare Advantage plan you select does not cover prescription drugs, CMS or Medicare, will not let you select a PDP plan at the same time. Therefore, if you need prescription benefits it is important to discuss this with your agent, to ensure that you choose the right plan.


 

Who is eligible for Medicare Advantage?

In order to enroll in a Medicare Advantage plan an individual must have Medicare Part A and B, continue to pay for any Medicare premiums, and typically live in the service area of the plan, some plans may require monthly premiums in addition to the Medicare premium. Some types of Medicare Advantage plans such as Special Needs Plans (SNPs) require additional qualifications. SNPs are plans designed for individuals that meet certain criteria for which the plan has created a specialized Managed Care Plan. For example, if the plan is a DE-SNP, this is a Dual-Eligible Special Needs Plan and is designed for individuals with Medicare and Medicaid. Depending on the DE-SNP, certain levels of Medicaid may be required in order to qualify for the plan. There are also C-SNPs which are Chronic Condition Special Needs Plans and in order to enroll in this plan, you must be diagnosed with the specific condition the plan was designed for. Typically with C-SNPs the plans need to obtain verification from the enrollee’s physician to verify that they meet the required criteria.


When can I enroll in a Medicare Supplement, Medicare Advantage or Prescription Drug Plan?

There are specific times of the year where a Medicare Beneficiary can enroll, disenroll, or change their current Medicare plan. Below are specific periods during the year when this can be done:

October 15- December 7 : Annual Enrollment Period (Open Enrollment)
January 1 – February 14 : Annual Disenrollment Period

If you have missed open enrollment and meet certain criteria you may qualify for an SEP or Special Enrollment Period. If you qualify for an SEP you may be able to make changes to your current plan, or enroll in a new plan. For more information on common Special Election Periods you can click here, or feel free to contact us so you can discuss your options with a licensed sales agent today.

Medicare Open Enrollment Starts In: