As you transition into Medicare, it’s important to know the basics.
You are generally eligible for Medicare if you or your spouse worked for at least 10 years in Medicare-covered employment, and you are 65 years old and a citizen or permanent resident of the United States.
If you are not 65, you might also qualify for coverage if you have a disability or end-stage renal disease (permanent kidney failure requiring dialysis or transplant).
Original Medicare has two main parts: Part A is hospital insurance. Part B is medical insurance. Premiums for each part work differently:
Medicare Part A – Hospital Insurance
Most people don’t have to pay a premium for Part A because it has already been paid for through payroll taxes while working. Medicare Part A (hospital insurance) helps cover inpatient care in hospitals, including critical access hospitals and skilled nursing facilities (but not custodial or long-term care). It also helps cover hospice care and some home health care.
Medicare Part B – Medical Insurance
Most people do have to pay a monthly premium for Part B. Medicare Part B (medical insurance) helps cover doctors’ services and outpatient care. It also covers some other medical services that Part A doesn’t cover, such as some of the services of physical and occupational therapists and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.
Medicare Advantage Plans are health plan options that are part of the Medicare program. A Medicare Advantage Plan is offered by a private insurance company that contracts with Medicare to provide you with all your Part A and Part B benefits.
If you join one of these plans, you will get all your Medicare-covered health care through the health insurance company’s Medicare Advantage Plan. This coverage can include prescription drug coverage. Medicare Advantage Plans include:
- Medicare Health Maintenance Organization (HMOs)
- Preferred Provider Organizations (PPO)
- Private Fee-for-Service Plans
- Medical Savings Accounts (MSA)
- Medicare Special Needs Plans
When you join a Medicare Advantage Plan, you use the health insurance card that you get from the plan for your health care. In most of the plans, you generally have extra benefits and lower co-payments than original Medicare. Most Medicare Advantage Plans are managed care plans, usually a health maintenance organization (HMO) or a preferred provider organization (PPO), and you may have to see doctors that belong to the plan or go to certain hospitals to get services.
To join a Medicare Advantage Plan, you must have Medicare Part A and Part B. You will have to pay your monthly Medicare Part B premium to Medicare. In addition, you may have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer.
Medicare Part D – Prescription Drug Plans
Medicare Part D offers prescription drug plans. You can sign up for Part D, and with Medicare starting three months before your 65th birthday.
It’s important to do this on time because there’s a permanent premium surcharge for enrolling more than three months after your 65th birthday if you don’t have insurance for drug coverage from another source.
If you are enrolled in a Part D “standalone” plan or a Medicare Advantage plan that incorporates drug coverage, you can switch plans during the open-enrollment period, which runs from Oct. 15 to Dec. 7 every year.
A Medicare Supplement (Medigap) insurance, sold by private companies, can help pay some of the health care costs that Original Medicare doesn’t cover, like co-payments, coinsurance, and deductibles.
If you have original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs and then your Medigap policy pays its share.
A Medigap policy is different from a Medicare Advantage Plan. A Medigap policy will only supplement original Medicare benefits and doesn’t work with a Medicare Advantage Plan.
Medigap policies are standardized and must follow federal and state laws designed to protect you. Insurance companies can only sell you a “standardized” policy identified in most states by letters.
All policies offer the same basic benefits, but some offer additional benefits, so you can choose which one meets your needs. There are many options from which to choose. As a licensed insurance agent, I can help you understand the differences between the plans so that you can decide on the right plan for you.
Some important things to know about Medigap policies:
- You must have Medicare Part A and Part B.
- If you have a Medicare Advantage Plan, you can switch to a Medicare Supplement insurance policy, but make sure you can leave the Medicare Advantage Plan before your Medicare Supplement insurance policy begins.
- You pay the private insurance company a monthly premium for your Medicare Supplement insurance policy. This is paid in addition to the monthly Part B premium that you pay to Medicare.
- A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
- You can buy a Medicare Supplement insurance policy from any insurance company that’s licensed in your state to sell one.
- Any standardized Medicare Supplement insurance policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medicare Supplement insurance policy as long as you pay the premium.
- Medicare Supplement insurance policies sold after January 1, 2006, aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
- It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage plan unless you’re switching back to original Medicare.
You don’t have to navigate all of this alone! Schedule an appointment with Thomas to get all your questions answered and find the perfect plan for you or a loved one…at no cost to you!
Portions of this page were sourced from medicare.gov.