Medicare

Medicare is a health insurance program available to you when you reach age 65, or under other specific circumstances. Some parts of Medicare are offered through the federal government, while other parts through private insurance companies.

Understanding Parts A,B,C, and D

Part A - Hospitalization

In general terms, Part A refers to services related to inpatient hospital services, skilled nursing facilities, home health care, and hospice care. You will likely pay no premium for Part A, because you already paid for it during your working years through payroll taxes. If you didn't, you may purchase Medicare Part A.

Part B - Doctor Visits

Covers costs related to doctor visits, ambulance, tests, and other outpatient care. Part B is optional, and you will be paying the federal government a monthly premium to receive this coverage.

Parts A and B are referred to as "Original Medicare", as this is coverage available through the federal government. You can choose to add on a Medigap supplement policy from a private insurance company to pay for most of the deductibles, copays, and other costs that Original Medicare doesn't cover. If you choose to purchase Medigap, your doctor and hospital will bill both Original Medicare and your Medigap company.

Part C - Medicare Advantage

Refers to plans that include Part A and B, and most also include Part D, as well as additional benefits, such as hearing or vision coverage. Usually referred to as "Medicare Advantage", Part C is offered by private insurance companies as a substitute for Original Medicare. Choosing this option requires you to be enrolled in Medicare Parts A and B, and that you continue to pay your Part B premium. If you choose a Medicare Advantage plan, you will get one insurance card and all your bills will go to one insurance company.

Part D - Prescription Drugs

This refers to optional prescription drug coverage which you will need to buy from a private insurance company, unless you choose to buy a Medicare Advantage plan that has prescription drug coverage included.

Medicare Enrollment Period

While an explanation of various Medicare enrollment opportunities can get somewhat complicated, we will try to simplify this by narrowing it down to the main three enrollment periods.

Your Initial Enrollment Period - a period of 7 months, including the three months prior to the month in which you turn 65, your birthday month, and the three months following. If you're already receiving Social Security, you will be enrolled in Medicare automatically. Otherwise you will need to sign up.

The Annual Election Period - between October 15 and December 7, you may make changes to your Medicare plan. You can switch to a different Medicare Advantage plan, Medigap Supplement plan, Prescription Drug plan, or change insurance companies. Your new plan benefits will take effect on January 1 of the next year.

Medicare Advantage Disenrollment Period - between January 1 and February 15, you may disenroll from your current Advantage plan and go to Original Medicare. You will not be able to add a Medigap Supplement plan during this period; however, you do have the option of adding a prescription drug plan.

In some cases, a special election period allows you to switch Medicare plans outside of these normal time frames. These circumstances usually involve your moving outside of the area which your current plan covers, or your current plan is either altered or discontinued.

What to Consider when Choosing a Medicare Plan

The Medicare plan you choose depends on your individual situation and preferences. You might prefer a Medigap (Medicare Supplement) Plan if you:

• Travel a lot, or spend a part of each year out of your local area
• Want a greater choice of health care providers
• Have more frequent need of health care services
• Prefer to have few, if any, out-of-pocket expenses

You would likely prefer a Medicare Advantage plan if you:

• Want all your medical and prescription drug coverage through one company
• Desire to have lower premiums, and also save money by using in-network providers
• Have less frequent need of doctor visits or other health care services

Consulting with a trusted, independent insurance advisor will ensure that the choice you make will best suit your needs and individual circumstances.

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