Understanding Medicare: Parts, Plans and Meeting Your Needs

UNDERSTANDING MEDICARE:

Parts, Plans and Meeting Your Needs

Courtesy of Sharon Wagner, seniorfriendly.info

Many Americans who enter into Medicare do so with a sketchy understanding of how the system works. That’s rather alarming considering how much older Americans rely on Medicare for their health care needs.

It’s essential that seniors and their caregivers understand how the program works to avoid missing out on important benefits and paying unnecessarily high costs. Sometimes, the best approach is to start from the beginning when unraveling a complex subject like Medicare.

PARTS OF MEDICARE

When you sign up for Medicare at age 65 you’re automatically enrolled in Plan A, which is hospital coverage, and Plan B, which covers outpatient coverage. Part A covers room and board in a hospital or skilled nursing facility, while Part B covers things like doctor visits, surgeries, lab work, equipment and diagnostic tests.

Prescription drugs are covered under Part D, which provides a card that allows you to buy prescription medications at a significantly lower cost than retail. Part D insurance is voluntary coverage, but it’s a key part of the system because paying out-ofpocket for medications can be extremely expensive.

HOW THE PARTS WORK

Your Medicare Part B coverage is based on income, with enrollees starting at a base rate of $135.50 while higher-income enrollees pay an “income adjustment” (meaning they pay more for Medicare). Part B is a necessity; you can’t purchase supplemental insurance unless you have both Part A and B. If you’re working for a large employer, your health insurance there continues as your primary with Medicare playing a secondary role, meaning you can delay enrolling in Part B if your group insurance already includes outpatient benefits.

Part B covers 80% of medical services, with your share being the remaining 20%. Certain treatments and procedures can be quite expensive, which means you could end up with a hefty co-pay. Part D has built-in co-pays for medications, so you won’t need supplemental insurance for the cost of needed medications.

MEDICARE ADVANTAGE

Choosing the right supplemental coverage is one of the most important decisions you’ll make as a Medicare enrollee. Fortunately, you can select plan options based on your budget. Medicare Advantage, also known as Part C, offers plans that provide a low-cost alternative to Medicare. These plans have their own local network of providers and usually have lower premiums than Medigap, though there are co-pays for hospital stays, doctor visits and other approved services. Medicare Advantage also has a folded-in version of Part D, though it’s important to remember that it may not include the specific medications you need.

MEDIGAP

As mentioned, Medicare pays 80%. A Medigap plan pays the other 20% of your Part B outpatient expenses. Some Medigap plans also cover Part A and B deductibles, though you purchase your own stand-alone Part D coverage since Medigap doesn’t cover prescription medications.

DECIDING WHETHER MEDICARE ADVANTAGE COULD BENEFIT YOU

Check to make sure your doctor is in-network and accepts Medicare Advantage (some accept original Medicare instead). Keep in mind, most Advantage plans are good about pairing you with a specialist if your doctor is out of network. You’ll also want to make sure any medications you take are covered. If you take several prescriptions and have reached the “donut hole,” the annual limit on what Medicare Advantage will cover (between $3,820 and $5,100 on covered medications), bear in mind that Part D enrollees get a 75% donut hole discount on brand-name drugs starting at $3,800.

Consider also your out-of-pocket costs if you anticipate health care expenses. You can always choose a plan with lower out-of-pocket costs. Check out the plan finder at Medicare.gov to find Medicare Advantage plans in your area that meet your needs. Note that plans such as Humana Medicare Advantage have extensive benefits, including vision and dental coverage as well as an innovative fitness program called SilverSneakers, which provides access to over 13,000 fitness centers.

It’s important to understand the Medicare system so you can find the coverage you need. As you compare and contrast plans, carefully check network provider and covered prescription medication lists. And stay abreast of the changes which frequently occur with Medicare. It also helps to know that if your plan doesn’t work for you this year, you can change it next year.