Starting September 15 and through the 21st, you will be seeing a lot of advertising for National Medicare Education Week. Most of the advertising will be by insurance companies providing private insurance versions of Medicare. The education week was created by one of these insurance companies who sell these plans. The week is scheduled one month before the Medicare annual open enrollment which starts on October 15. Although the Centers for Medicare & Medicaid Services, which is a part of the U.S. Department of Health and Human Services, does not officially recognize the education week on their website, it is still a good time to learn more about and better understand Medicare.
There are many Medicare educational workshops and written materials provided by these insurance companies. Just keep in mind that these insurance companies are in the business of peddling insurance policies. They will most likely provide information that will make their products appear attractive to purchase. It may be wise to also seek out additional information from sources other than insurance companies trying to sell you something.
Medicare consists of four parts, Parts A, B, C and D. The original Medicare are Parts A and B. You are typically eligible to enroll in Medicare at age 65. You are generally automatically enrolled in Medicare if you are already receiving Social Security or Railroad Retirement Board benefits when you turn 65, you are under 65 and have a disability, or you have ALS (Amyotrophic Lateral Sclerosis, also called Lou Gehrig’s disease).
If you are not automatically enrolled in Medicare Parts A & B, you have a seven month initial enrollment period that begins three months before the month you turn 65, includes the month you turn 65, and ends three months after the month you turn 65. When you are receiving Social Security or Railroad Retirement Board benefits, you typically are enrolled in Medicare Part A at no additional charge. If you are not eligible for premium-free Part A, you can buy it during certain enrollment periods at a cost of up to $413 per month in 2017.
Part A mostly covers hospitalizations, certain home health services following a hospital stay, hospice care and short-term rehabilitation care in a skilled nursing facility. When you are enrolled in Part A, you generally are also enrolled in Part B, but at a cost to you of $134.00 per month for new 2017 enrollees.
The monthly premium for Part B paid by most previous Medicare enrollees in 2017 is $109.00 on average. If your income is above a certain level, your monthly premium could be as high as $428.60 in 2017. If you do not sign up for Medicare Part B when you are first eligible, then your monthly premium is increased by a late enrollment penalty.
Part B usually covers medically necessary services or supplies for the diagnosis or treatment of your medical condition and certain preventative services. These may include doctors’ visits, outpatient care and therapy, durable medical equipment, medical supplies, laboratory diagnostic services and certain home health services.
Even if you have Medicare Parts A and B, there are many medical expenses that are not covered. These include deductibles, co-pays, custodial long-term care and many listed non-covered services and procedures. Because of these non-covered expenses, you generally can buy a Medicare supplement or Medigap private health insurance policy that will cover some of these expenses that are not covered by Medicare Parts A and B. There are a number of Medigap plans which are identified as Plans A, B, C, D, F, G, K, L, M and N and are compared at https://www.medicare.gov/supplement-other-insurance/compare-medigap/compare-medigap.html.
The most popular Medigap policies are the C and F Plans. Although they do not cover dental, vision or medicine, they cover the most medical expenses. The F Plan is more expensive and popular since it covers 100% of all Part A and Part B deductibles and co-pays. For example, my Dad has Parts A and B and a Medigap F Plan, and recently had a hospitalization. He was in the hospital about a week, had several months of physical therapy, and numerous follow-up labs and doctor’s visits. He paid $0.00 deductibles and $0.00 co-pays.
There currently is a plan to shut the door on Medigap C and F Plans. The federal government has announced that in 2020, C and F Plans will be closed to new enrollees. If you enrolled in a C or F Plan prior to 2020, you may continue it thereafter. But new enrollees in Medigap plans in 2020 on can only sign up for plans that make you pay the Medicare deductibles. You are going to have to make some difficult choices in the next couple of years.
If you are eligible for Medicare Parts A and B, you can opt-out of the original Medicare Parts A and B and have those replaced by Medicare Part C, also called a Medicare Advantage plan. With Medicare Part C Advantage plans, you have the private insurance replacements of Medicare Parts A and B. If you have signed up for a Medicare Part C Advantage plan, you are no longer covered by original Medicare Parts A and B, even if you have your red, white and blue Medicare card that says you do. Your Medicare coverage is now governed by the private health insurance contract you entered into with the insurance company.
There are numerous Medicare Part C Advantage plans around and coverages vary from state to state, county to county and plan to plan, even within the same insurance carrier. Medicare Part C plans are often times health maintenance organizations (HMOs) or preferred provider organizations (PPOs). If you incur non-provider or out of network medical expenses with a PPO, you may have higher co-pays or no coverage at all.
Medicare Part C Advantage plans may have different coverages and higher co-pays or deductibles than original Medicare Parts A and B. However, Medicare Part C Advantage plans are prohibited from charging higher cost-sharing requirements than original Medicare Parts A and B for only certain covered services such as chemotherapy, dialysis and skilled nursing care.
The biggest downside of Medicare Part C Advantage plans is that you cannot purchase a Medicare supplement or Medigap insurance policy to pay for non-covered medical expenses, deductibles and co-pays, like you can currently with original Medicare Parts A and B. You are stuck with the Medicare Part C Advantage plan provisions and limitations. All non-covered medical expenses, deductibles and co-pays are out-of-pocket. For this reason, Medicare Advantage plans are often referred to as Medicare Disadvantage plans.
If you are eligible for Medicare Parts A and B, you are also eligible for a Medicare Part D prescription drug plan for an additional monthly premium paid to a private insurance company. There are numerous Part D prescription drug plans from which to choose and which have varying premiums, deductibles, co-pays and coverages. Just like Medicare Part C Advantage plans, Medicare Part D prescription drug plan coverages vary from state to state, county to county and plan to plan, even within the same insurance carrier.
Many Part C Advantage plans include the Medicare Part D prescription coverage as part of their plan. Be careful when you sign up for Medicare Part D prescription coverage so you do not unknowingly also sign up for a Medicare Part C Advantage plan. Many seniors have inadvertently signed up for a Medicare Part C Advantage plan when they thought they were only signing up for a Part D prescription drug plan.
In addition, as with Medicare Parts A and B, if you do not enroll in Medicare Part D when you are initially eligible, there is a penalty premium that you would have to pay when you eventually do enroll in the program. In order to minimize your premiums, you may want to enroll in Medicare Parts A, B and D as soon as you are eligible. You may be able to get special help with your Medicare premiums if your income and/or assets are below a certain level.
With the tools that are available to you, you should be able to find the most appropriate coverages at the most economical prices to meet your health care needs.
By Matthew M. Wallace, CPA, JD
Published edited September 17, 2017 in The Times Herald newspaper Port Huron, Michigan as: Time to wade into alphabet soup of Medicare