Medicare is something we Americans eagerly anticipate most of our lives.
Imagine! All of our medical bills paid for with no muss or fuss.
Until you start to apply. It’s a fairly complex system, and it’s
daunting—even for the most system-savvy person (sure, you aced the
FAFSA forms, but this is entirely different). It pays to educate yourself,
both before applying for the first time as you approach age 65 and also
as the Annual Enrollment Period (AEP) looms,
December 7—that’s when you can make changes to your existing plan.
First-Time Medicare Applicants
You become eligible for Medicare when you turn 65, or if you have certain
disabilities or conditions that make you eligible at a younger age. The
program is funded by the taxes we pay on our income, premiums paid by
Medicare members and by the federal government. Once you’re eligible,
you have the choice of Original Medicare, the fee-for-service program
run by the U.S. government, or a Medicare Advantage Plan, a type of private
insurance offering either an HMO or PPO product.
You can enroll in Medicare for the first time during your
Initial Enrollment Period
(IEP), which is the seven-month period surrounding the month you turn 65. You
can enroll three months before the month in which you turn 65, the month
of your birthday or the three months following your 65th birthday.
Read on to learn about the different plans or “parts” of Medicare.
Medicare Part A (Hospital insurance)
Part A covers inpatient hospital stays, care in a skilled nursing facility,
hospice and some in-home health care. For most people, Medicare Part A
has a $0 monthly cost, because of what they have paid into Social Security taxes.
Medicare Part B (Medical insurance)
Part B covers certain doctor’s services, outpatient care, medical
supplies and preventative services. For most services, Part B covers 80%
of charges with no out-of-pocket maximum. There is a monthly cost for
Part B, and this year (2017) for people new to Medicare, the cost is $134/month.
For people who have been on Medicare this year they have been charged
an average of $110/month. High-income earners pay more than $134/month.
Details can be found on the official Medicare website, medicare.gov.
Medicare Supplement Insurance Plans
Medicare Part A and Part B are considered Original Medicare and by design
cover only certain percentage of cost. There is a high hospital co-payment
charge with both. This is why consumers should consider adding a Medicare
Supplement insurance plan (also known as a Medigap plan) to help cover
costs not covered by Original Medicare. The best time to get a Medicare
Supplement plan is when you are new to Medicare because the premiums will
be the lowest they are ever going to be. Between age and inflation, premiums
always increase over time.
When you first apply for Medigap there are certain situations that require
insurance companies to sell or offer you a Medigap policy. These are called
“guarantee issue rights”. In these situations an insurance
company can’t refuse to sell you a Medigap policy.
You have a guaranteed issue right, in situations including: when a person
on Medicare Advantage HMO moves out of the area, or when a person leaves
their retiree group health insurance plan. For a list of these situations,
visit Medicare.gov or talk to your insurance agent.
Medicare Part C (Medicare Advantage plans)
Medicare Advantage plans are offered by private insurance companies contracted
by Medicare (see below) and include HMOs and PPOs. Medicare Advantage
plans cover everything that Original Medicare Parts A and B do–including
all the benefits plus additional perks such as discounts to gym memberships,
dental and vision plans, durable medical equipment and even transportation–and
usually also offer prescription drug coverage and options for you to choose
a medical group or an independent physician association (IPA) contracted
with them. The upside: optimal coverage for just about anything that might
arise in your life and the option to change your plan every year. One
downside: you are limited to routine medical services within the network
of your IPA or medical group.
Medicare Advantage plans require you to choose an HMO insurance company
such as Aetna, Anthem Blue Cross, Care1st, Blue Shield of CA, Health Net,
Humana, SCAN or AARP Medicare Complete (through United Healthcare) and
a medical group such as nonprofit Torrance Health IPA (THIPA) or HealthCare
Partners. THIPA, which is a division of Torrance Memorial Health System,
contracts with all eight HMO insurance companies listed.
Medicare Part D (Prescription drug coverage)
Part D adds benefits for drug coverage to Original Medicare Parts A and
B, and these plans are offered through private insurance companies. Note:
Many Medicare Advantage plans offer similar prescription drug coverage
included in the plan. You have to do a bit more homework on all your options,
but it will probably be worth it.
An experienced certified independent insurance agent can review all your
needs and make a recommendation that works best for you.
Other Options For New And Existing Medicare Members
“Three months before people turn 65, they get bombarded with flyers,”
admits independent insurance agent Rose Straub*. “You start to have
so many questions: What type of plan do I need? When should I enroll?
What happens to my spouse and family?” Medicare does the best they
can to explain the options, but that’s where an insurance advisor
who specializes in Medicare can help,” says Straub. “We bring
people in at no cost, review all their options and make sure that the
services and doctors they already have and value will be part of their
Medicare plan, if that’s important to them.”
Questions about Medicare? Contact the Medicare HICAP counselor at 310-517-4666
for a free individual Medicare insurance consultation.
*Rose Straub and Vince Kelly are independent licensed agents and not employed
by Torrance Memorial Medical Center.