If you are turning 65, Happy Birthday!
This Special Edition will take you through the process and explain simply what you need to do. You are not alone if you’ve received stacks of advertising and official looking documents and not sure where to start. A little Overwhelmed?
Be wary of misleading mailers that suggest you fill out a form and mail it in, or indicate that they are your new Medicare agent….This is a sales lead generator that will place you on a call list that is almost impossible to get off of!
OK, Here are the basics ~
Original Medicare (Parts A and B)
Medicare was started in July of 1965. It is provided by the government and pays fees for your care directly to the doctors and hospitals you visit. Part A helps with hospital cost and Part B helps with doctor and outpatient care. In 2005, the government added part D and this helps pay for prescription drug costs.
Medicare Part A (Hospital Coverage)
Part A helps with the cost of your inpatient hospital stays and skilled nursing care after a hospital stay. Medicare Part A is free to you so long as you have worked 40 Quarters/10 years in this country. Although the monthly premium is free, the deductibles and copays are not. This can leave you with a big financial exposure. The deductible is $1316 this year. If you are in the hospital longer than 60 days, the you will have a share in the financial responsibility. This is why you would choose to have a supplemental insurance plan in place.
Medicare Part B (Doctor Visits)
Part B helps with the cost of doctor visits including outpatient care, clinics, labs, etc. There is a monthly cost by activating Part B. Most people this year will pay $134 per month, but if you’re single making more than $85,000, or married and making over $170,000, you will pay a higher monthly premium.
You will have a deductible of $183 for Part B services, then Part B picks up 80% of your doctors fees, and you are responsible for the remaining 20%…There is NOT a ceiling on your 20% financial responsibility. This is why a supplemental insurance policy is important to protect you.
Medicare Part D (Prescription Drugs)
Part D helps with the cost of prescription drugs. This is not a part of Original Medicare and must be purchased. Part D plans are sold by private companies and can range in costs from $15/month to beyond $100/month. This is optional, but you will incur a penalty if this is not satisfied by enrollment into a plan or have a Medicare plan that includes “creditable” drug coverage. This penalty stays with you for life. Even if you do not currently take medications, you must satisfy this requirement.
As you have read above, Original Medicare Does NOT cover everything.
Original Medicare helps, but leaves holes in your Medical coverage, leaving you with a potential financial burden. Most people enroll in additional coverage to help them pay for the cost and benefits that aren’t covered by Original Medicare Parts A & B. And you must have Prescription drug coverage in place so as not to incur the penalties.
How do you fill in the HOLES of Original Medicare? With all the mailings you’ve received, likely you are seeing a new language called Medicare Supplemental Plans, or Medicare Advantage Plans…
Medicare Advantage Plans (Medicare Part C- Think of C for Combination)
Medicare Advantage plans are run by private companies. Here in Orange County, you’ve probably heard of companies like ~ Aetna, Anthem, Blue Shield, Humana, Scan, or AARP/United Healthcare, and there are more. These are all companies that offer Medicare Advantage plans you can choose from.
They combine coverage for certain hospital costs, doctor visits, and most include the required Part D (drug) coverage at no additional cost. In most plans you choose a primary doctor and your doctor has access to specialists within their group. Most plans offer additional benefits not offered by Original Medicare for example, Dental, Vision, Hearing, and Gym Memberships. Many Advantage plans here is Orange County have $0 monthly costs. The Advantage plans offer Out-of-pocket limits which is your financial protection.
YOU MUST CONTINUE TO PAY YOUR ORIGINAL PART B MONTHLY PREMIUMS.
Medicare Supplement Plans (Medi-Gap)
Medi-Gap plans do what the name implies, they fill in the Gaps of Medical Coverage that are not covered by Original Medicare A & B. This type of plan works along with your Original Medicare A & B. This can protect you against big financial exposure.
Medi-Gap plans are like a PPO, but more choices. You can see any doctor throughout the U.S. as long as the doctor participates with Original Medicare A & B. This solution does not require a referral from a doctor. There is a monthly cost for a supplemental plan and YOU MUST CONTINUE TO PAY YOUR ORIGINAL PART B MONTHLY PREMIUMS. Unlike the Advantage plans, on a Medi-Gap plan, you are required to enroll with a separate Part D (Prescription drug) plan. Medi-Gap plans offer greater Freedom, but it comes with a monthly cost.
HAVE YOU HEARD OF THE BIRTHDAY RULE?
For those of you that already understand all the basics above, here is something you may not already know…If you currently have a Medi-Gap Supplemental plan in place, during your birthday month, you can change from one company to another.
It must be “like" plans or lesser. Example from a Supplemental Plan F to another (equal plan F), or a Supplemental Plan F down to a Plan G (a slightly lower premium plan that just has a yearly deductible of $183).
Why would you do this? Well, did you get a Birthday card that wasn’t so nice indicating your new monthly costs will be higher because you are now a year older?
The great news is that you're able to make a move and not stuck with a higher payment. You do not lose ANY of your same doctors. You do not have to answer health questions. Its a simple process and worth a quick phone call during your bday month. If you wait until after your birthday, it will be too late.
Here is an example ~ If you are age 70, living in Orange County
Using the Birthday Rule, if these are lower than you are paying, you can make a change and save money.
Plan F current rate $206/month
Plan G current rate $175.91/month
Plan N current rate $136/month
Hope this was helpful.
I love helping Seniors understand and enroll with Medicare and in the plan that fits their needs. Feel free to contact me directly, or attend one of my Medicare 101 Educational meetings at Mission Hospital offered every month.
PS. Be sure to work with a local Medicare Insurance “Broker” to get a comparison on more than one company, and more than one plan in just one visit. Find someone that is familiar with doctors in your area. We get paid by the insurance companies so there is No Cost to you. We still make House calls!