Tomorrow October 15, 2018 starts the Medicare Annual Open Enrollment Period. Now is a good time to learn more about and better understand Medicare. You have been seeing a lot of Medicare advertising recently. Most all of the advertising is by insurance companies providing private insurance versions of Medicare, or by their agents.
There are many Medicare infomercials, 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. As we discussed last week, you may want to speak with an independent unbiased certified Michigan Medicare Medicaid Assistance Program (MMAP) counselor.
Now to the basics. Medicare consists of four parts, Parts A, B, C and D. The original Medicare are Parts A and B. 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. 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.
You can opt-out of original Medicare Parts A and B and enroll in a Medicare Part C Advantage plan. These plans are the private insurance replacements of Medicare Parts A and B. With 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 premiums, deductibles, co-pays and coverages vary from state to state, county to county and plan to plan, even within the same insurance carrier.
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, like Medicare Part C Advantage plans, have varying premiums, deductibles, co-pays and coverages.
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 and 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 $422 per month in 2018. 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 2018 enrollees. If your income is above a certain level, your monthly premium could be as high as $428.60 in 2018. If you do not sign up for Medicare Part B when you are first eligible, then your monthly premium is permanently increased by a late enrollment penalty.
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 this, you can buy a Medicare supplement or Medigap private health insurance policy that will cover some or all 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/supplements-other-insurance/how-to-compare-medigap-policies.
As we discussed last week, the most popular Medigap policies, Plan C and Plan F, will be closed to new enrollees as of January 1, 2020. Although they do not cover dental, vision or medicine, they cover the most medical expenses. If you are enrolled in a C or F Plan prior to 2020, you may continue it thereafter. However, the premiums on these plans will likely increase as the pool of enrollees dwindles. Starting in 2020, the Medigap Plan G and Plan N will probably become the most popular since they will then offer the most coverages.
Carefully review any Medicare Part C Advantage plan in which you are considering enrolling. Medicare Part C Advantage plans do not have to cover everything that original Medicare Parts A and B do, and may have higher co-pays or deductibles. Medicare Part C Advantage plans are only prohibited from charging higher cost-sharing requirements than original Medicare Parts A and B for certain covered services such as chemotherapy, dialysis and skilled nursing care.
Many Medicare Advantage plans advertise that they cover vision, dental or other medical expenses that are not covered by original Medicare Parts A and B, some with no additional premium. In such instances, it is highly likely that there are also a number of medical expenses that would have been covered by original Medicare Parts A and B, but are not covered by the Medicare Part C Advantage plan.
Medicare Part C plans are oftentimes 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.
One of the biggest downsides 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 Part C Advantage plans are often referred to as Medicare Disadvantage plans. Many Part C Advantage plans include Medicare Part D prescription coverage as part of their plan. Insurance companies often advertise the convenience of these “all-in-one” plans. Convenience should be much less of a consideration than what the coverages of the plan are.
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.
Also, make sure your prescriptions are covered by the Medicare Part D prescription drug plan you choose, even if you do not change plans. Plans can change every year. I have known a number of seniors who were surprised to find out in January after they were locked into their Medicare Part D prescription drug plan, that their prescriptions were not covered by the plan they chose.
If your income is above a certain level, your monthly Medicare Part D prescription plan premium could be increased by as much as $77.40 in 2019. 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 permanent 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.
Published edited October 14, 2018 in The Times Herald newspaper Port Huron, Michigan as: The Parts of Medicaid.