10 THINGS about Medicare
Medicare can be confusing for many of us. We have compiled a list of 10 things we think will help clarify how Medicare works and what the you need to consider when evaluating choices for Advantage and Supplement plans.
1. What is Medicare?
2. How to enroll in Medicare
3. Understanding Part A,B, C and D
4. What does Medicare pay for?
5. What does Medicare cost?
6. Medicare Advantage Plans
7. Medigap/Supplement plans
8. Advantage plans vs Medigap plans
9. Social Security and age
10. Medicare vs Medicaid
1. What is Medicare?
Medicare is a federal health insurance program for those 65 and older who have worked for 10 years in Medicare covered employment. Medicare also covers younger people with disabilities who have been on social security for 24 months. Medicare can be used as your sole health insurance coverage or in conjunction with insurance you have through your employer, spouse, former employer or union. Medicare is separated into parts, that we will discuss in section 3.
2. How to enroll in Medicare.
You can fill out an application on the social security website or at your local social security office. The enrollment period begins 3 months before you turn 65 and continues for 7 months after turning 65. If you miss the enrollment period, the next available sign up date is Jan. 1st with parts of the coverage not becoming active until July. It is always best to sign up for at least Part A immediately, even if you still receive employer sponsored benefits. If you receive Social Security benefits, you are automatically enrolled in Part A and Part B.
3. The “parts” of Medicare.
Original Medicare includes two parts:
* Part A covers hospital bills. Most people don’t have to pay a premium for Part A.
* Part B covers medically necessary doctors visits, lab tests and supplies, such as wheelchairs and walkers and preventive care, such as flu shots. You pay a premium for Part B.
* You can add coverage for prescription medicine by purchasing a Medicare Prescription Drug Plan – called Part D – from a private company approved by Medicare. Drug plans vary by cost and the drugs they cover
* Instead of choosing original Medicare, you can opt for a Medicare Advantage plan, also known as Part C. More than one-third of Medicare enrollees have a Medicare Advantage plan in 2017.
4. Advantage Plans.
Medicare Advantage plans cover everything original Medicare covers. Most plans include drug coverage, and some cover additional services, such as vision and dental care. Private companies approved by Medicare sell Medicare Advantage Plans.. Generally, your choices are less restricted with traditional Medicare than with most Medicare Advantage plans. With original Medicare, you can go to any doctor, hospital or other healthcare provider who accepts Medicare. With many Medicare Advantage plans, you pay more out-of-pocket to see providers outside a plan’s network. However, your overall out-of-pocket costs might be lower with a Medicare Advantage Plan than with original Medicare.
5. What does Medicare pay for?
- Part A pays for your first 60 days in the hospital. Your share of that cost is a hospital deductible, which will be $1364 in 2019. After 60 days consecutive days in the hospital, Medicare pays a diminishing share of your benefits. You begin paying a larger share in the form of a daily hospital copay. This can be hundreds of dollars per day, so you need supplemental coverage to protect you from those expenses on Part A services.
- Part B pays for your outpatient care. This includes things like doctor visits, lab-work, imaging tests, surgeries, durable medical equipment, and even things like chemotherapy, radiation, and dialysis. After a small deductible that you pay once per year ($185 in 2019), Part B will cover 80% of all of these services for you.
Your share is the other 20% of all of these services, with no cap.
Part D helps to pay for retail prescription medications.
5. What does Medicare cost?
Medicare Part A is free for most people, as long as you or a spouse have worked at least 10 years in the United States. Medicare Part B depends on your income. People new to Medicare 2019 have a base rate of $135.50/month. However, people in higher income brackets will pay an “Income Adjustment.” Most states have more than 20 different Part D plans to choose from. The national average Part D premium is currently around $35/month. Part D plans have different drug formularies, so you’ll choose one that offers your medications at decent prices. The Medicare website has a tool for making this decision.
6. Supplemental/Medigap plans. Medigap plans pay AFTER Medicare. They pay for the things that are normally your share. For example, all Medigap plans cover the 20% that we mentioned above. So Medicare will pay 80%, and your Medigap plan will then pay the other 20% of your Part B outpatient expenses. Some Medigap plans also cover your Part A and B deductibles. You can choose your own Part D drug plan to go alongside this coverage. Medigap plans also allow you freedom of choice in your medical care. You can see any physician or healthcare provider that participates in Medicare (nearly 900,000 providers across the nation). These plans cost more than Advantage plans because they are more comprehensive. They also give you more freedom of choosing your providers. In order to get guaranteed access to Medigap, you must enroll within six months of signing up for Medicare Part B, assuming you're at least 65 (otherwise, you must enroll within six months of your 65th birthday). After that initial enrollment period, you can be turned down for Medigap coverage due to pre-existing conditions. At the end of every year, Medicare Advantage plans have open enrollment periods during which you can freely change plans
8. Advantage plan vs. Medigap.
Medigap coverage usually has a higher monthly premium, but could result in lower out-of-pocket expenses than some Medicare Advantage plans. Medicare Advantage plans generally limit you to the doctors and facilities within the HMO or PPO, and may or may not cover any out-of-network care. Traditional Medicare and Medigap policies cover you if you go to any doctor or facility that accepts Medicare. Medicare Advantage plans often only operate within a certain region. If you live in more than one state throughout the year, traditional Medicare plus Medigap is probably a better choice than an Advantage plan. Medicare Advantage plans may include drug coverage options; Medigap plans never do, requiring you to buy a Part D plan if you want to cover your prescription costs
9. Social Security.
Once Social Security has determined what you’ll pay based on your income, they will deduct your Part B premiums from your monthly income benefits. If you have delayed enrollment into your Social Security income benefits, then they will invoice you for Part B on a quarterly basis.
Medicaid can help pay for Medicare premiums and out-of-pocket medical expenses. It also covers, as the medicaid.gov website notes, services that aren’t fully covered by Medicare. That includes long-term care in a nursing facility, or home nursing care. In short, for seniors unable to afford some healthcare costs, Medicaid can help cover the gaps that are left by Medicare. While Medicare is a federal program, Medicaid is a partnership between the federal and state governments, it has a different name in each state. It also means that states have flexibility on how they design their Medicaid programs.
In Pennsylvania, it's $1,075 for a single individual to get Medicaid when you're on Medicare. Also, you can't have over $2,000 in liquid assets, not counting your automobile and your home. If you had a life insurance policy with a $3,000 cash value, you can't get Medicaid.