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The Basics of Medicare Plans

16 November 2012
By Senior LivingTopics November 16th, 2012 4:07 pm Senior LivingTopics
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Turning 65? Welcome to the crowd! Beginning in 2013, over 7,600 seniors will turn 65 every day. This age is a landmark for many seniors who now have the chance to choose Medicare coverage. There are many options to consider when considering Medicare. However, it is important to select a plan that best meets your individual health needs.

Who is entitled for Medicare?

Medicare is a Federal health insurance program that pays for an array of health care expenses. The Centers for Medicare and Medicaid Services (CMS) is the plan administrator. Currently, citizens of the United States who are 65 years of age and older or under 65 years of age adults with certain approved medical conditions or disabilities may be eligible for benefits.

There are four different parts to the Medicare program. The following is a brief description of each component.

Medicare Part A is a part of the original Medicare Plan. This plan is your Hospital Insurance or (HI). HI helps pay for inpatient hospital care, skilled nursing and rehab care, medically deemed home health and hospice care. Enrollees in Medicare Part A do not have to pay a monthly premium to be covered. Currently, Medicare Part A does not cover the full amount of a hospital bill. Enrollees must share the cost by paying a deductible before Medicare benefits begin. Medicare will then pay 100 percent of the cost up to 60 days in a hospital or 20 days in a skilled nursing facility. After that, you pay a flat amount up to the maximum covered days. Medicare benefits cover a total of 150 days in a hospital and 100 days in a skilled nursing facility.

Medicare Part B is the medical insurance. Enrollment in Part B is optional. However, it covers non-hospital expenses like physician visits, blood and lab work, X-rays, and outpatient services. Enrollees pay a monthly premium for this part of Original Medicare. Enrollees with a higher income may pay an increase in the monthly fee. Costs for this program are also shared. Enrollees may a small yearly deductible before Part B benefits begin. Generally, physicians who accept Medicare require the enrollee to pay 20 percent of the bill. Medicare will pay 100% of lab services that help physicians determine a diagnosis.

Part C is considered private insurance. This is referred to as “Medicare Advantage” regardless of the insurance carrier you select. Medicare Advantage is optional, but to have this private coverage, you must also have Medicare Parts A and B. Although, Medicare Advantage plans must provide Medicare Part A and B benefits, each Medicare Advantage plan varies with their benefit options.

Part D is the prescription drug insurance. This optional Medicare benefit will be a separate monthly fee for the enrollee. Medicare Part D is only offered through a private insurance company and the fee will vary with each insurer. Generally, you will share in the costs of your prescriptions drugs according to the parameters of the selected policy.

What is the difference between a Medigap plan and Medicare Advantage Plan?

Both of these plans are options for people with Medicare. According to AARP, Medigap counts as “Medicare supplemental insurance.” However, Medicare Advantage plans may provide some extra benefits that supplement Medicare. Medigap can be used only by people enrolled in traditional Medicare. It is private insurance you can purchase to cover some or most of your out of pocket expenses that original Medicare doesn’t cover. (for example: co-pays and deductibles on physician appointments or hospital stays.) Fortunately, each of the ten types of Medigap policies is standardized by law. The law requires the same benefits. However, the insurer has the right to charge different premiums.

Medicare Advantage (sometimes know as Medicare Part C) comprises a variety of private health plans. These plans allow enrollees to design a custom plan that reflects their medical needs. Although, every Medicare Advantage plan must cover all the same benefits of original Medicare, you may see extra benefits with different copayments. Almost all Medicare Advantage plans have prescription coverage so you do not need a separate Part D. Another difference from the original Medicare plan is that most of the Medicare Advantage plans require you to go to providers within their service network. It is important to note that if you enroll in a Medicare Advantage plan you cannot, by law also purchase a Medigap policy, even if you have out-of pocket expenses under Medicare Advantage.

When are seniors eligible for Medicare enrollment?

Seniors turning 65 are eligible in original Medicare three months prior to their 65^th birthday. During this time, seniors should take inventory of their medical needs to see how the original Medicare benefits their lifestyle and how to bridge the gaps with a supplemental policy. A great way to compare plans is through the Medicare web site: http://www.medicare.gov