Medicare 101

Medicare Card Sample

What is Medicare and How do you get it?

Medicare is a federally funded program that’s administered and regulated by Centers for Medicare & Medicaid Services (CMS). Medicare is available for people age 65 or older, younger people with disabilities and people with End Stage Renal Disease (permanent kidney failure requiring dialysis or transplant). You are eligible for premium-free Part A if you are age 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years or 40 quarters.

Parts of Medicare

Original Medicare

Original Medicare Medicare Part A: helps cover hospital, skilled nursing, home health and hospice care. You will have out-of-pocket costs for these services such as deductibles and co-insurance. Medicare Part B: helps cover costs of doctor visits, outpatient services & preventative care. With Part B, there are additional costs, such as monthly premiums, annual deductibles & coinsurance you have to pay. Medicare pays 80% after the Part A & Part B deductibles have been paid while the beneficiary pays 20% with no out-of-pocket maximum or cap. This is why it’s wise to either buy a Medicare supplement or go with a Medicare Advantage plan. Medicare Part D

Prescriptions

Medicare Part D: helps cover the cost of prescription drugs for people on Medicare. This insurance is offered by a private insurance company and must offer the basic benefits required by Medicare. There’s two ways to get Part D, either purchase a Stand-Alone Prescription Drug Plan or enroll in a Medicare Advantage Plan that includes Prescription Drug Coverage (aka Part D).
Medicare Part D

There’s Another Option To Your Medicare Coverage…. Medicare Advantage

Medicare Part C: (also called Medicare Advantage or MA Plans) Medicare Advantage is an “all in one” alternative to Original Medicare. These “bundled” plans include Part A, Part B, and usually Part D. Plans may have lower out-of- pocket costs than Original Medicare. It covers everything Original Medicare covers; most of the times, it covers additional benefits like dental, vision and hearing at no additional cost. It’s administered by a private insurance company and available to anyone who has Medicare Part A, Part B and is a permanent resident of the plan’s service area. There are different types of Medicare Advantage plans but the generally it’s either an HMO or PPO.

Medicare Supplement or Medicare Advantage?

After you enroll in Original Medicare, there are two options for additional coverage and protection.

Medicare Supplement or MAPD (Medicare Advantage Prescription Drug )?

Original Medicare

Original Medicare provides benefits for Hospital and Medical Coverage (like doctor visits) but it doesn’t cover 100% of these procedures. This creates potential costly gaps in your out of pocket especially as we get older and need increased medical attention. These gaps can be significant for individuals without additional coverage.

Do I need a Medicare Supplement?

YES. You would need to enhance your coverage by purchasing a Medicare Supplement to help cover costs not covered under Medicare Parts A and B. Whether it is gaps created by Medicare co-payments, coinsurance, or deductibles they can add up to a substantial amount. There is no limit to your out-of-pocket costs each year if you do not purchase a Medicare supplement.

Do I need a Stand-Alone Prescription Drug Plan?

YES. Part D (prescription drug coverage) is not included and you would have to purchase a stand-alone prescription drug plan to have coverage and avoid a Late Enrollment Penalty (LEP).

Medicare Advantage

Medicare Advantage plans include Part A and Part B benefits and most include coverage for prescription drugs (Part D) at no additional costs. Also, most plans include coverage for dental, vision and hearing (benefits not offered by Original Medicare). Majority of our Medicare Advantage plans have no additional premium and a cap to your yearly out-of-pocket expenses. If you reach the maximum out-of-pocket amount, you pay nothing for your covered in-network services for the rest of the calendar year.

Medicare Advantage Plan Types (Common Types of Medicare Advantage Plans)

HMO (Health Maintenance Organization)

Generally speaking; primary care physician arranges your healthcare in the plan’s network. PROS: Costs are very low and some plans offer extra benefits like money back in your Social Security check. CONS: Must stay in the plan’s provider network and get referrals to most specialists.

PPO (Preferred Provider Organization)

Have the ability to see doctors in and out of network without a referral however costs will be less from in-network provider. Copays may be higher than an HMO and have fewer extra benefits but you don’t need referrals and have larger network of providers.

SNP (Special Needs Plans)

SNPs are plans designed for certain subgroups within the Medicare population. There are two types of special need plans; Dual Special Needs (DSNP) and Chronic Special Need Plans (CSNP):
  • Dual Special Need Plans (DSNP): Plans designed for people with both Medicare and Medicaid
  • Chronic Special Need Plans (CSNP): Plans designed for people who have certain chronic conditions like Diabetes or COPD.

Is Medicare Advantage as good as Original Medicare?

Medicare Advantage plans are required to cover everything that Original Medicare covers, including services Medicare considers medically necessary. If you decide to enroll in a Medicare Advantage plan, you still have Medicare coverage, rights and protections; you just choose to receive your Medicare benefits through a private insurance company.

Medicare Election Periods

Medicare Card Sample This is when someone first becomes eligible and can sign up for Medicare. It is a 7-month period that begins 3 months before the 65th birth month, the birth month and lasts three months after. Medicare eligible people can enroll in, dis-enroll from or change to a Medicare Advantage or Medicare Prescription Drug plan to start Jan. 1st following year. During this period, people with Medicare Advantage can make plan changes to another Medicare Advantage plan (with or without prescription drug coverage) or Original Medicare (with or without prescription drug coverage). You could qualify for a special enrollment period during any month when certain events happen even if it’s outside of AEP and OEP. There are many types of SEPs but some common ones are:
  • If you moved out of your service area
  • If you qualify for Medicaid or Extra Help w/ Prescriptions (LIS)
  • If you moved into/from an institution like a nursing home/skilled nursing facility
  • If you enroll into a plan with a 5-Star Overall Quality Rating

Signing up late can affect premium costs

You may have to pay a Late Enrollment Penalty (LEP) if you sign up late for Part B or Part D when you first become eligible for Medicare. Find out more by visiting www.medicare.gov and searching for:
  • Part B Late Enrollment Penalty
  • Part D Late Enrollment Penalty
  • Special Circumstances (Special Enrollment Periods)

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