Not so fast my friends here’s a guide to understanding medicare benefits…
The big surprise to most when get their Medicare is how many expenses are still involved. There’s the Part B premium $121.80 in 2016 for most, (those with higher incomes may be required to pay more), hospital and physician co-insurance, as well as an annual deductible. In addition you may decide to add a Medicare Supplement policy, which would off-set some of these expenses, but these also cost money and can be expensive. Prescription drug coverage is available through Medicare Part-D but of course this is ANOTHER expense.
Example: Wanda Paysalot age 65
- Medicare Part B premium $121.80
- Medicare Supplement premium $192
- Part D drug plan $32
So in this example total premium expense for the year is almost $3,600….and for a couple you can usually about double that expense. Are you kidding me?
$7,000 a year for something you thought you earned? Think of what you could do with $7,000 a year times 20 years (for those of us not prone to great math skills that’s $140,000).
The good news is, there are many cost savings alternatives.
FOR YOUR FREE TURNING 65 DECISIONS CHECKLIST GO TO CONTACT US OR
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EVEN IF YOU ARE ALREADY ON MEDICARE WE CAN STILL HELP
We proudly work with : Medicare Advantage Prescription Drug Plans (MA-PDP), Medicare Advantage (MA only) Medicare Supplements or “Medigap” plans, Prescription Drug Plans (PDP) as well as individual health policies for under those under 65 and not otherwise entitled to Medicare.
Know Your Medicare ABC’s
To truly understand Medicare you must break it down to the ABC’s…and let’s not for get good old D. That is A to cover eligible hospital charges. Part B is to cover claims from attending physicians. part C got it’s name from when, what are now known as Medicare Advantage plans were called Medicare Choice. And finally when Medicare started covering prescription drugs they needed another letter and conveniently D was still available and the rest is history. So there you have it. But for more thorough examination please refer to the detailed descriptions provided below.
Medicare Part A- Hospitalization
When someone refers to Medicare Part A, what they are referring to is the hospitalization or more accurately the inpatient hospitalization portion of your Medicare. In short, this is what covers you for hospital admissions, short term stays in a skilled nursing facility or admission to a mental health facility.
And for those hungry for detail, the version provided by Medicare reads like so:
It sounds like a lot, and it is, but you need to know that there is a deductible involved with admissions which right now is $1132! That’s per admission not per year, meaning it is possible to have to pay this fee more than once a year. Please note, it doesn’t say anything about physicians that see you in the hospital. That is because physician services fall under Part B, and Part B is a whole different animal with its own rules and deductibles.
So at the end of the day, if you or your spouse has worked for 10 years and were contributing to social security you probably have already earned your Part A eligibility, as no further premiums are required
Medicare Part B- Medical or Physician
The same 10 years, of social security contributions for eligibility that apply to Part A also apply to Part B. But, the bad news is you will probably have to pay a monthly premium for it.
Unless you are still working and covered by your employers health plan, you need to elect coverage with Medicare and start paying any applicable premium before you turn 65. “You better be there, or be square,” because if you’re late, for his date, you’re not going to skate….In fact, you may have to pay a late enrollment penalty. That is unless you have comparable coverage through your employer. So, knowing when to sign up is important! Again, for those not already collecting social security, you must enroll to begin receiving coverage. To make it easy we are providing the following chart:
Unless you do your home work, and get the paper work in the 3 months before the first day of your birthday month, enrollment will be delayed. So don’t wait until your birthday party to start thinking about it.
So What Does Part B Cover? Basically, Part B is for physician services. Or generally, anything that doesn’t include a hospital admission is going to fall under “Part B”. Part B also has a separate deductible and co insurance from Part A hospital services.
Right now, if you have Medicare only, you would have to pay the first $166 of physician services, doctor visits, chiropractor, specialists, outpatient hospitalization (i.e. this means you went in for a procedure but could go home afterward without actually being admitted), and 20% of the Medicare allowable charge. So even though you paid for Medicare through your social security contributions, you will probably still have some health care expenses. Unless you qualify for social security assistance, full Medicaid etc. and you are new to Medicare, you are most likely going to have to fork over $99.90 or more per month for your Part B Premium.
But that’s not the bad news. To be fully covered many people new to Medicare acquire additional coverage to cover the gaps in Medicare (Part A or hospital co-insurance $1,288 per admission, Physician or Part B deductible $166 annually and 20% of Medicare allowable charge).
Medicare Part C
Those new to Medicare, and seasoned veterans alike, have found that joining a Medicare Advantage plan offers certain perks, like additional benefits without an increase in premiums, the opportunity to choose a personal physician to help you to coordinate your care, and proactive disease management and more.
Medicare Advantage plans sometimes offer additional value added services including vision, hearing, dental, prescription drug coverage and in some cases gym membership! Best of all, most cases require no additional premium beyond what you are already paying Medicare for Part B. In fact at this point some plans are even rebating some of the part B premium. (Please have a licensed agent certified by the health plans review all benefits before deciding on coverage).
If you are accustomed to getting HMO or PPO coverage at work, you know how these plans work.
These plans used to be called Part C, or Medicare Choice, or even more recently, Medicare Advantage Part D (MA-PDP). They cover Part A (hospitalization), Part B (physician) and Part D (prescription drugs). Many offer additional perks like gym memberships, transportation and over-the-counter vitamins or medications. As long as you have both Medicare A and B, live in the approved service area, and do not have ESRD (end stage renal disease) or are hospice you qualify for these plans anytime regardless of health condition.
Medicare Advantage is a great example of private industry working with the Federal Government. In most urban markets there are multiple plans to choose from that will compete for your business.
When someone new to Medicare hears about these plans for the first time… More benefits… Lower or no premium… Drug coverage included… the typical reaction is, “What’s the catch?”
If there is a catch, it is only that plan members pick from a list of physicians, and generally can only be referred to specialists and hospitals “in the network”. Typically, you will find that your doctor, or a doctor that you know of, is part of the network, as is your preferred hospital. Remember there are many to choose from. However, when you look at it statistically most Medicare Advantage members stay with Medicare Advantage plans. So the value proposition must be strong.
As part of the Medicare Modernization Act, prescription drugs were included as a Medicare covered benefit. You do have to select the coverage you want and pay for it. Stand-alone Part D products are available across the country. You can generally get your prescriptions filled at a wide variety of locations, including the national chains or through mail order.
You can select this coverage when you first get Medicare or during the Annual Enrollment Period (AEP). The AEP is again earlier than in prior years. Last year AEP moved from November 15st through December 31st to October 15th through December 7th.
For an AEP policy review or update call 855-228-3900
If you don’t enroll when you are initially eligible and lack any other comparable coverage (like group health insurance if you are still working) you may be subject to late enrollment penalties.
If you select a Medicare Advantage plan that has Part D (so an MA-PDP plan) you don’t need a “stand-alone” Part D plan. You already have one included in you Medicare Advantage plan. MA-PDP covers Part D and usually carries a $0 premium.
If you choose to go the Medigap route you will need to select a Part D-only plan as well to have prescription coverage.
One solution is to go out and purchase what’s called a Medigap Policy, (For obvious reasons. Get it? It covers the gaps in Medicare). Generally, with this type of coverage you have the “freedom” to go directly to specialists without a referral from another doctor or the health plan. But they do add a significant expense in the form of a plan premium.
Plans are standardized so each insurance company offers the same exact benefits by plan letter. The variables to consider are premiums charged and the how they implement administrative services, you know, things like customer service.
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