10 Frequently Asked Questions about Medicare
1. What is Medicare?
Medicare is a federal health insurance program for those 65 and older (and spouse) 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.
2. What are the parts of Medicare?
There are three basic parts to Medicare:
* Part A covers hospital bills. Most people don’t have to pay a premium for Part A.
* Part B covers outpatient care. This includes medically necessary doctors visits, lab tests, supplies (such as wheelchairs and walkers), and preventive care (such as flu shots). You pay a premium for Part B.
* Part D covers prescription medicines. Part D is optional and is provided by private insurers approved by Medicare. You pay a separate premium for Part D.
3. How do you enroll in Medicare?
If you are already receiving Social Security benefits, you are automatically enrolled in Parts A and B when you turn 65. Otherwise, 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.
Special Note: If you miss the enrollment period, the next available sign up date is the following January 1st with parts of the coverage not becoming active until July. It is always best to at least sign up for Part A immediately, even if you still receive employer sponsored benefits. If you do not sign up for Part B at 65, you must be covered through an employer plan or you will be penalized for signing up later. The penalty can be quite expensive, so please don’t miss the deadlines!
4. What does Medicare cost?
* Part A is free for most people, as long as you or a spouse have worked at least 10 years in the United States.
* Part B premium may vary. People new to Medicare 2019 have a base rate of $135.50/month. However, people in higher income brackets will pay an “Income Adjustment.” As an example, an individual who earned $500,000 or more in 2017 will pay a monthly Part B premium of $460.50
* Part D premiums vary by insurer. The national average Part D premium is currently around $35/month. Part D Plans have different drug formularies, so you’ll want to choose one that provides the best coverage for your medications. The Medicare website has a tool to help you choose the best plan for you. The “drug coverage” section on the Medicare website is a great place to start: https://www.medicare.gov/drug-coverage-part-d
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 $1,364 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 co-pay. This can be hundreds of dollars per day.
* 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. Deductibles and co-pays vary by insurer.
Since you could still be left with considerable healthcare costs with basic Medicare, it is best to consider a Medicare Advantage or Medicare Supplement Plan.
6. What are Medicare Advantage Plans?
Medicare Advantage Plans (also known as Part C) cover everything basic Medicare (A and B) covers as well as some costs not covered by Medicare. Most plans include drug coverage so you will not need a separate Part D Plan. Some also cover additional services such as vision, hearing, and dental care. Private companies, approved by Medicare, sell Medicare Advantage Plans. You may pay an additional premium for some of these plans. Generally, your choices are restricted to healthcare providers within the plan’s network. With most 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.
7. What are Medicare Supplement Plans?
Medicare Supplement Plans (also known as Medigap) pay most/all medical costs not covered by Medicare. For example, all Supplement Plans cover the 20% of outpatient costs not covered by Plan B. Some Supplement Plans also cover your Part A and B deductibles. You would still need to choose your own Part D drug plan to go along with this coverage. Medicare Supplement 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. In order to get guaranteed access to a Supplement Plan, 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 a Supplement Plan coverage due to pre-existing conditions.
8. What are the differences between an Advantage Plan and a Supplement Plan?
Supplement Plans are generally more expensive but could result in lower out-of-pocket expenses than Advantage Plans. Supplement Plans allow you to use any healthcare provider that accepts Medicare. If you live in more than one state throughout the year, a Supplement Plan is probably a better choice. Supplement Plans do not include prescription coverage. After the initial enrollment period, you can be turned down for Supplement Plans.
Advantage Plans are typically less expensive and often include drug coverage and additional benefits. But Advantage Plans limit you to the doctors and facilities within the HMO or PPO, and may or may not cover any out-of-network care. Advantage Plans often only operate within a certain region.
9. Does Social Security pay my Medicare premiums?
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.You can also choose to have your Part D premiums deducted from your monthly benefits.
10. How does Medicaid work with Medicare?
Medicaid provides health insurance to low income people regardless of age. Once a recipient becomes eligible for Medicare, it can help pay for Medicare premiums and out-of-pocket medical expenses. For seniors unable to afford some healthcare costs, Medicaid can help cover the gaps that are left by Medicare.
An important difference between Medicaid and Medicare is Medicaid may also cover long-term care in a nursing facility, or home nursing care. These are services that are not covered by Medicare.
While Medicare is a federal program, Medicaid is a partnership between the federal and state governments. All states have a Medicaid program, though the amount of coverage will vary by state. A good starting point for finding contacts for your state’s Medicaid program can be found at:https://www.medicaid.gov/about-us/contact-us/contact-state-page.html