Understanding Medicare
I’m going to explain the basics of how Medicare works for most people. I can’t go over everything here but this should give you a general understanding of the system.
In general, Medicare is an 80-20 health insurance program ran by the Federal Government. Those eligible for Medicare are those 65 and older, those under 65 and disabled and some with chronic conditions. The 20 percent of your health cost that you are responsible for is what you’re looking to cover.
The ways to cover your cost are:
- Stay on original Medicare and pay the out of pocket expenses for hospital and doctors. You will need to purchase a Prescription Drug Plan.
- You stay on original Medicare and purchase a Medicare supplement to cover your out of pocket expense for hospitals and doctors. You will also need to purchase a Prescription Drug Plan.
- Enroll in a Medicare Advantage Plan that covers your hospital and doctor cost along with many other services after you pay your co-pay for the service you receive. Some but not all Medicare Advantage Plans have a Prescription Drug Plan included in them.
Medicare uses letters to describe the different parts in the Medicare program:
- Part A Hospital cost. You get this if you have worked forty quarters (10 years) in your working career. This covers hospital stays, skilled nursing, home health care and 3 pints of blood.
- Part B Doctors cost. Including primary doctors, specialist, emergency room, preventive services, lab test, x-rays, diagnostics, and other service including medications dispensed at the doctor office. There is a premium for Part B coverage.
- Part C Advantage Plans
- Part D Prescription drugs. Think of this as medications you get at the Drug store or you order from a mail-order pharmacy. If you get a stand-alone Prescription Drug Plan there is usually a premium.
This is a very brief explanation of how the Medicare program works. Please contact me for more information if you have questions or would like an appointment.
Here are a few websites you can go to and learn more:
Medicare Advantage
Medicare Advantage is one way you can get your Medicare coverage.
These plans are called Part C under the Medicare system. Medicare Advantage Plans work differently than straight Medicare. Your coverage is provided through insurance companies. These insurance companies sign contracts with Medicare to provide the plans. The Center for Medicare and Medicaid Services (CMS) oversee all Medicare Advantage Plans, benefits and services.
All advantage plans must have at least the same and in most cases better benefits than straight Medicare. Some Medicare Advantage Plans also have a Prescription Plan included with them. Medicare Advantage Plans may be networked plans such as PPO’S and HMO’S or they may be non networked PFFS. Where you live makes a difference in the plan you can enroll in. These plans are co-pay based, you only have to pay your co-pay or coinsurance and the plan pays the balance. Usually these plans have lower premium cost than a Medicare Supplement and some even have a zero dollar premium.
There is only one health question asked to qualify for coverage and there is a maximum dollar amount you will be responsible for each year in co-pays.
If you have questions or an interest in learning more please contact me.
Here are a few websites you can go to and learn more:
Medicare Supplement
Medicare Supplements are just what they say, they help to supplement your Medicare.
Supplements pay in addition to original Medicare for Part A (hospital) and Part B (doctor) costs. There are no supplements that you can purchase that include a Medicare Prescription Plan. Letters are used to distinguish between the different types of plans (i.e. A, C, F, G and N). All insurance companies must use the same letter format. This means a plan F offered by one insurance company will have the same exact coverage as a plan F by another insurance company. Supplements do not have a network that you have to stay in. If the provider accepts original Medicare you can see them for your services.
Things to remember about supplements:
- They are sold by insurance companies
- Letters are used to distinguish between the different supplement plans
- Prescription Plans are not included with supplements
- There is a monthly premium
For more information, questions, or to purchase a supplement don’t hesitate to contact me.
Here are some of the insurance companies that we represent with Medicare supplements:
Medicare Rx Plans
Medicare Prescription Plans are covered under Part D in Medicare.
Medicare Prescription Plans are offered by insurance companies but regulated by the Medicare system. A prescription list, also known as a formulary, is used by all prescription plans to inform you how the prescription drug will be covered and if there are any special circumstances the prescription drug has with its use. The medications in the formulary are grouped into different tiers. These tiers are used to group different prescription drugs according to their cost. Prescription drug plans are either grouped in a 4 tier or 5 tier formulary. The higher the tier the more expensive the drug cost, therefore the higher your co-pay will be.
There is a coverage gap (donut hole) in these prescription drug plans that if you reach it you will be responsible for more of your prescription drug cost. There is usually a monthly premium to have a prescription drug plan. There is a program called Low Income Subsidy (LIS) that if you qualify financially you may get part or all of your prescription premium paid and have lower or no co-pays for your prescription drugs and with no donut hole.
Medicare encourages you to apply if you think you qualify. You can apply at www.ssa.gov and fill out an application or pick up an application at your local Social Security office. There is a penalty for not enrolling in a prescription plan if you don’t have prior prescription drug coverage. You can change your Medicare Prescription Plan during the Annual Election Period (AEP).
For more information, questions, or if you need to enroll into a Medicare Prescription Plans don’t hesitate to contact me.
Here are a few websites you can go to and learn more:
Are you paying too much for prescriptions? Click here to find out.