MAKING SENSE OF MEDICARE

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What is Medicare?

Something big happened yesterday, it’s happening today and it’s going to happen again tomorrow. Every day 10,000 Americans turn 65. For some this might mean retirement, but for everyone, this means enrollment in Medicare. Currently, there are more than 55 million Americans enrolled in Medicare. Whether you’re currently enrolled, or will be soon, it’s always a good time to become Medicare savvy.

The healthcare industry continues to grow and evolve. Preparing and aligning your needs with Medicare will help you take control of your health and ensure you receive the highest quality coverage at the right price.

Medicare and Medicaid are often referred to together. In reality, they are actually quite different.

MedicaidMedicare
Healthcare assistance to low-income individuals and families, often at low or no cost.Healthcare insurance to individuals 65+ at all incomes for a monthly premium.

A Brief History of Medicare

Today’s concept of Medicare evolved over many years before becoming a reality. President Harry S. Truman originally brought the idea forward in 1945 with an idea of a national health insurance. This idea grew into a federal health program available to all seniors through President John F. Kennedy when it was discovered that 56% of Americans over 65 had no health insurance. The program failed, however it was not dead. It was finally President Lyndon B. Johnson who successfully established what we know as Medicare twenty years later in 1965.

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Coming full circle, President Truman became the first American to enroll in Medicare.

Medicare has since been adapted to fit the needs of the American public. It would be hard to imagine our country without such an expected benefit which now totals 15% of the Federal budget (almost as much as our military). Medicare humbly started out with just two services, Part A and Part B. Together, they were known as Original Medicare. Today, they continue to make up the foundation of Medicare, as 70% of consumers are enrolled in Original Medicare. Since its founding, Medicare has evolved in a few major ways:

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Who Pays for Medicare?

According to the Center for Medicare Advocacy, “Part A of the program is financed largely through federal payroll taxes paid into Social Security by employers and employees. Part B is financed by monthly premiums paid by Medicare beneficiaries and by general revenues from the federal government. In addition, Medicare beneficiaries themselves share the cost of the program through copayments and deductibles that are required for many of the services covered under both Parts A and B.”

The Parts of Medicare

Medicare Part A – Hospital Insurance

Part A Medicare covers hospital-incurred expenses. In almost all cases, Part A is required by law with a penalty or fine if not enrolled. Most Americans are automatically enrolled in Part A when they turn 65. It is only during special circumstance that you do not need Part A Medicare. Part A covers inpatient care, skilled nursing facilities, hospice care and home health services.

Learn more:

What it Covers / Who’s Eligible / Choose a Plan / How to Enroll / What it Costs

Medicare Part B – Medical Insurance

Part B Medicare covers medical expenses. Medical expenses include outpatient services, medical equipment and a number of screenings and preventative care. You are automatically enrolled in Part B if you are collecting social security. Failure to enroll in Part B will result in a fine every year you do not enroll. An exception may be made if another policy is approved as an alternative.

Learn more:

What it Covers / Who’s Eligible / Choose a Plan / How to Enroll / What it Costs

Medicare Part D – Prescription Drug Coverage

Medicare Part D offers prescription drug coverage to everyone with Medicare. Upon eligibility, if you decide not to join a Medicare Prescription Drug Plan (Part D), Medicare Advantage Plan (Part C) or other Medicare health plan that includes prescription drug coverage, you’ll likely pay a late enrollment penalty. On average, you’ll have 31 plans to choose from, and 17 Million Medicare consumers are enrolled in a Part D policy.

Learn more

What it Covers / Who’s Eligible / Choose a Plan / How to Enroll / What it Costs

Medigap – Supplemental Insurance

Medigap is another private Medicare option that provides supplemental insurance to the gaps of coverage in Original Medicare. Costs vary by plan since they are offered by third parties. Medigap is not required, but may be worth having if you predict your medical needs will outweigh the monthly premium. About 30% of Medicare beneficiaries choose to enroll in Medigap, making up about 11 million Americans. On average, you’ll have around 22 plans to choose from. Generally, Original Medicare will cover approximately 80% of your healthcare costs, and Medigap will cover the remaining 20%.

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Learn more:

What it Covers / Who’s Eligible / Choose a Plan / How to Enroll / What it Costs

Medicare Part C – Medicare Advantage Plans

Part C Medicare is offered as an alternative to Original Medicare (Part A + Part B). Also known as Medicare Advantage Plans, Part C plans are offered through private companies but are still overseen by the Federal government. With Part C, you are signing over your Medicare benefits to a third party who monitors and administers your benefits according to their network. A network is a group of approved doctors, hospitals and services that you are limited to use for coverage. This does not mean you are forbidden from seeing other doctors or getting care elsewhere by alternative means, but these costs will come out of pocket at your own expense.

Almost 18 million Americans (30% of Medicare beneficiaries) are enrolled in Part C. The “advantage” of these plans is that you do not have to coordinate between Part A, B and D, and they may also offer additional services like vision and dental. Additionally, Medicare Advantage plans often have lower monthly premiums.

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Find the plan that best covers your healthcare needs. Lower costs and a broad range of services does not always equal the best option for you.

Learn more:

What it Covers / Who’s Eligible / Choose a Plan / How to Enroll / What it Costs

How Medicare Works Together

When choosing a Medicare path, there are essentially two options:

  1.  Enroll in Original Medicare and you’ll be covered by Part A and Part B and may also choose to enroll in a Part D plan for prescription drug coverage. A Medigap plan may also be available if your healthcare needs call for it. When you apply for Social Security (or Railroad Retirement Benefits), it will trigger automatic enrollment in Medicare Parts A and B.
  2. Enroll in Part C, Medicare Advantage Plan
    The Medicare Advantage plan you select will take the place of Original Medicare. Your plan may or may not cover prescriptions drugs, so you need to check if yours does which will determine if you need Part D. Medigap plans are not an option if you have Part C.

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You may be able to keep your private healthcare policy! If you or your spouse are still employed at age 65, you may still be covered by a private healthcare policy through your employer. Talk to your healthcare provider or a healthcare insurance agent to determine how your private plan and Medicare can work together.

What’s Covered by Medicare?

Below you will find comprehensive lists of what each Medicare Part will provide coverage for. Make sure you check what your plan covers every year before open enrollment.

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These lists are subject to change, especially private coverage like Part C, Part D and Medigap.

Part A Coverage

There is only one Federal plan to choose from.

CoveredNot Covered
  • A semi-private care room (unless a private room is medically necessary)
  • Meals
  • Prescription drugs
  • Up to 100 days of hospital time
  • Changing of sterile dressings and other medical supplies
  • Hospice care and home health care services (when medically necessary)
    • Intermittent skilled nursing
    • Physical therapy
    • Speech-language pathology
    • Some medical supplies and equipment
    • Care by home health aides
    • Occupational therapy
    • Medical social work
  • Inpatient care in a religious nonmedical health care institution
  • Blood (if no free blood bank blood is available, Part A pays for patient’s blood after the enrollee pays for the first three units)
  • Inpatient mental health care in a psychiatric facility (limited to 190 days in the enrollee’s lifetime)
  • Private-duty nursing
  • A TV or phone in the care room
  • Long term care (over 100 days)
  • Full-time personal care
  • Homemaker services (shopping, cleaning, laundry)
  • Home meal delivery
  • Dental care
  • Acupuncture
  • Hearing aids
  • Chiropractic services (does cover spinal manipulation to correct a subluxation)
  • Custodial long-term care, such as assistance with activities of daily living (including dressing and bathing)

Part B Coverage

There is only one Federal plan to choose from.

CoveredNot Covered
  • Physician and nursing fees
  • One-Time “Welcome to Medicare” preventive visit (within the first 12 months of having Part B)
  • X-rays
  • Diagnostic tests
  • Blood transfusions
  • Chemotherapy
  • Renal dialysis
  • Some vaccinations
  • Preventive and Screening services
  • Ambulance services
  • Second Opinions before Surgery
  • Mental health care
  • Physical therapy
  • Transplants
  • Urgent care (emergency room visits)
  • Screenings (such as pap tests, HIV screening, glaucoma tests, hearing tests, diabetes screening and colorectal cancer screenings)
  • Durable medical equipment (such as wheelchairs, hospital beds and oxygen equipment)
  • Observation stays in the hospital that aren’t regular admission
  • IV medications that are given at a nursing home or an infusion center (including cancer chemotherapy)
  • Full-time personal care
  • Homemaker services (shopping, cleaning, laundry)
  • Home meal delivery
  • Dental care
  • Acupuncture
  • Hearing aids
  • Chiropractic services (does cover spinal manipulation to correct a subluxation)
  • Custodial long-term care, such as assistance with activities of daily living (including dressing and bathing)

Part D Coverage

Medicare.gov provides a plan finder tool. There you can enter the medication(s) you currently take or will be taking to help find the local plan that fits you prescription drug needs.

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The medications supported in each plan’s formulary (approved medications list) can change each year. Check with your provider and prospective provider for coverage details.

Medigap Coverage

Medigap, also known as “Medigap Supplement Insurance” is just that — a supplement to your Plan A and B coverage. Medigap comes in ten different lettered plans. These lettered plans offer different benefits when comparing one to another. However, one lettered plan will offer the same benefits regardless of the provider. However, the quality and price may be different between providers. Choosing a Medigap lettered plan depends on your healthcare needs, budget and what lettered plans are offered by providers in your area.

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Medigap is also the only part of Medicare that allows delay coverage based on preexisting conditions. Medigap coverage varies from state to state, and not all plans are available in all states. However, all states are required to at least carry plan A, C and F.

CoveredNot Covered
Compare Medigap plans side by side
  • Long-term care in a nursing home
  • Vision
  • Dental
  • Hearing aids
  • Eyeglasses
  • Private-duty nursing care
  • Prescription drugs

Part C Coverage

Part C has multiple plans to choose from, so coverage will vary from plan to plan. However, since Part C takes the place of Original Medicare, it will generally cover most of the same services.

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Check with your provider and prospective provider for coverage details.

CoveredNot Covered
  • See Parts A or B
  • Vision - See exceptions
  • Hearing
  • Health and wellness programs
  • Dental

Are you Eligible for Medicare?

You are first eligible for Medicare three months before your 65th birthday and three months after, totaling seven months of eligibility for first-time applicants.

However, each Part of Medicare carries special exceptions and requirements that must be met in order to enroll, or not enroll.
Enrollment Period for Medicare

Part A Eligibility

Requirements

  • You have been a legal resident of the U.S. for at least five years
  • You must be an American citizen, or a legal immigrant (green card holder)
    • If you are a green card holder, you must have been married for at least one year to a U.S. citizen or legal immigrant who qualifies for full Medicare benefits
  • You must disclose whether you have end-stage renal disease (ESRD)
  • You must prove that you’ve paid FICA taxes for 10 or more years

Special Situations

Refer to AARP for special situations when applying for Part A. For example, if you had private coverage through your spouse who just enrolled in Medicare, or if you live internationally.

Part B Eligibility

As part of Original Medicare, Part B follows the same eligibility requirements as Part A.

Requirements

See Part A Requirements.

Part D Eligibility

Part D is available to anyone who qualifies for Original Medicare and cannot be denied based on income or health. There are additional requirements exclusive to Part D that should also be reviewed.

Requirements

See Part A Requirements.

Additional Part D Requirements

  • You must live within your Part D plan’s service area
  • You cannot be enrolled in more than one Part D plan at a time
  • If you’re eligible for Part D because you’re disabled, you can enroll starting 21 months after you began receiving Railroad Retirement Board (RRB) or Social Security benefits. You will have until the 27th month to enroll. Your Part D coverage will start at the beginning of your 25th month of receiving RRB or Social Security benefits.

Medigap Eligibility

Medigap is available to anyone who qualifies for Original Medicare. Keep in mind, there are some additional requirements exclusive to these plans.

Requirements

See Part A Requirements.

Special Situations

Refer to your rights and protections for special situations when applying for Medigap. For example, if your plan moves areas or if you lose coverage by no fault of your own.

Denial Criteria

Part C Eligibility

A Medicare Advantage Plan follows the same eligibility requirements as Original Medicare. However, additional requirements may be needed as these plans come from a provider.

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Even though Advantage enrollees have rights and protections under Medicare guidelines, the services offered and the fees charged by private insurers vary widely, check with your provider for details.

Requirements

See Part A Requirements.

Additional Requirements

How to Choose a Plan That’s Right for You

Deciding which Medicare plan(s) to enroll in can feel overwhelming. Thankfully, Medicare allows you to review and change your plan every year letting you adapt and evolve with your healthcare needs. It’s important to record, document and reflect on what expenses you have acquired, what medication(s) you are taking or will need to take, and prepare for what ailments or treatments may be in the upcoming year. Medical needs can be difficult to plan for, but taking control of what you can plan for will greatly improve your peace of mind and quality of care.

Medicare Plan(s) Pros & Cons

ChoiceProCon
Original Medicare Part A + B + (D) + (Medigap)Access to providers who accept Medicare nationwide.More paperwork and responsibility to coordinate benefits, generally higher costs.
Medicare Advantage Plan Part C + (D)Easy single-payer system, similar to private insurance, lower premium cost.Less coverage than Original Medicare, provider network is restricted.

To identify these healthcare needs, take the AARP Medicare Needs Assessment to help find the right plan for you.

Ask Yourself These Questions Every Year

My HealthYesNoComments
Have I had any major health changes?
Have I started or stopped any medications?Which medications?
What pharmacies do I get them from?
Do I have any chronic conditions?
Have I moved in or out of a nursing home?
My CircumstancesYesNoComments
Have I traveled or plan on traveling more?
Am I relocating? Have I moved out of my plan’s service area?Medicare costs may change based on where you live.
Has my plan changed or has the cost changed?
Do I have health insurance from another source?
Which doctors and hospitals do I use?
Do I qualify for Extra Help?

Narrow In On Your Needs With These Questions

When you’re evaluating options, also ask yourself these questions:

  • How much will I have to pay for premiums, deductibles, doctor visits and hospital stays?
  • Will I have to choose hospital and health care providers from a network?
  • Will my doctors accept the coverage? If not, are there doctors near me who will?
  • Will I need referrals to visit specialists?
  • Will the plan cover me if I get sick while traveling in another state?
  • What will my prescription drugs cost?
  • Are my drugs on the plan’s approved drug list (formulary)?
  • Does the plan include the pharmacies I currently use?
  • Can I get my prescriptions through the mail?
  • Does the plan have a good quality rating?

Medicare Advantage Star Quality

Part C Medicare Advantage Plans ranks plans with a star rating from 1 (worst) to 5 (best) stars. Ratings are based on the following criteria:

  • Overall member satisfaction
  • Customer service
  • Healthcare provider performance
  • Customer health
  • Level of care

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As a general rule of thumb, each half-star is roughly equal to an additional $50 in membership costs per month. It is important to find the right mix between coverage and cost.

Ask Yourself These Questions To Determine Your Part D Needs

If you…You might want to…
…currently take specific prescription drugs.…look at drug plans that have included your drugs on their formularies. Then, compare costs.
…want extra protection from high prescription drug costs.…look for plans that offer coverage in the coverage gap, and then check with those plans to be sure your drugs would be covered during the gap. (The plans may charge a higher monthly premium.
…want your drug expenses to be balanced throughout the year.…look at plans with low or no deductibles or with additional coverage in the coverage gap.
…take a lot of generic prescriptions…look at plans with tiers that charge you nothing or low copayments for generic prescriptions.
…don’t have many drug costs now, but want coverage for peace of mind and to avoid future penalties.…look for plans with low monthly premiums for drug coverage. If you need prescriptions in the future, all plans still must cover most drugs used by people with Medicare.
…like the extra benefits and lower costs that are available by getting your health care and prescription drug coverage from one plan and are willing to accept the plan’s restrictions on what doctors, hopsitals, and other health care providers you can use.…look for Medicare Advantage Plans with prescription drug coverage.

*The above table is sourced from a Medicare.gov pdf Things to think about when you compare Medicare drug coverage.

How do I Enroll in Medicare?

Important Enrollment Dates

Each year, you will need to review and evaluate if the Medicare plan(s) you are enrolled in are still the best options for your healthcare situation. Plan information will become available on October 1 for you to begin comparing costs and benefits, two full weeks before Open Enrollment begins on October 15. You will then have close to two months to change or keep your plan by December 7. If you successfully enroll during this period, your plan will go into effect on January 1. Failure to do so will result in both a delay in coverage as well as financial penalties. To avoid this, you must wait an additional year for the following open enrollment to change your plan.

PeriodWhat You Can DoEnrollment Dates
Open Enrollment Period (OEP)View choicesOctober 15 - December 7
Initial Enrollment Period (IEP)Sign up for Medicare for the first timeThree months before your 65th birthday and three months after (7 months). Failing to enroll delays coverage at least two months.
Special Enrollment Periods (SEP)View choicesDependent on situation
Medicare Advantage Disenrollment Period (MADP)Switch from a Medicare Advantage Plan to Original Medicare and pick up Part D drug coverage for those who did not already have itJanuary 1 – February 14 (effective date of disenrollment from the plan is the first day of the month following the date the disenrollment request is received)
General Enrollment Part A & BIf you weren’t automatically enrolled in Medicare, and you missed your IEP, you can still apply for Medicare Part A and/or Medicare Part BJanuary 1 - March 31 (coverage begins in July)
Medigap EnrollmentEnroll in MedigapThis period lasts six months and begins the first day of the month in which you are 65 or older and enrolled in Medicare Part B.

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A “year of coverage” refers to a calendar year, regardless of when you enroll. For example,  January, 1 through December, 31. The cycle of coverage (deductible, initial coverage period, coverage gap, catastrophic coverage) starts over each year on January, 1. Keep in mind, the best time to buy a Medigap policy is during your 6-month Medigap open enrollment period. During this time, you can buy any Medigap policy sold in your state, regardless of health conditions.

Part A & B Enrollment

Knowing when and how to enroll in Part A & B Medicare is extremely important. Failure to enroll during the correct timeframe will result in financial and coverage penalties. Learn when to sign up, how to sign up, where to sign up and special enrollment situations at Medicare.gov.

Part D Enrollment

If you require coverage for medication(s) that you are currently taking or will be taking in the upcoming year, you can either enroll in a Part D prescription drug plan or Medicare Advantage Plan, some of which include prescription drug coverage. Using the Medicare Plan Finder, you can search both Part D and Part C plans to receive assistance in selecting the plan that will provide you the lowest cost and most coverage for your prescription drugs.

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Your right to enroll in a Part D Prescription Drug Plan during the Medicare Advantage disenrollment period has some restrictions. However, you do have a right to disenroll from your Medicare Advantage plan during the disenrollment period and switch to Original Medicare. Click here to find out more.

Medigap Enrollment

If you are enrolled in Original Medicare and decide you require additional coverage for the remainder of the services you need, or if you are just curious what that coverage may look like, use the Medigap Plan Finder provided by Medicare.gov.

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It pays to stay on top of Important Medicare Dates, literally.

  • If you miss your enrollment period, you may still be able to buy a policy, but an insurance provider may charge you more for the policy.
  • However, missing an enrollment period could also result in an insurance provider declining the Medigap policy entirely.

Part C Enrollment

With so many Medicare Advantage Plans to choose from, it might feel impossible to pick the right one for you. It is recommended to know what you will need to have covered for in the upcoming year, but luckily Medicare has a helpful Medicare Advantage Plan Finder tool to assist in your search.

You can also work with an independent insurance agent, or purchase plans directly from the insurance company.

What Does Medicare Cost?

Costs for Medicare can vary depending on the coverage you require your deductibles, and even where you live. To get an idea of what different types of plans can look like check out AARP Medicare Cost Examples.

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There are no price breaks for a couple joining the same plan. You will each have your own individual plan, exclusive to you.

Medicare Part A – What it Costs

Part A costs are a mix of monthly premiums + deductibles + coinsurance + penalties.

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Monthly Premiums

Free Premium

You do not have to pay a monthly premium for Part A if you meet one of the following criteria:

  • If you’re not yet 65, but you’re disabled and you’ve been receiving Social Security benefits or Railroad Retirement Board disability benefits for two years
  • You have end-stage renal disease (ESRD) and are receiving dialysis.
  • You have amyotrophic lateral sclerosis (ALS) and are eligible for Social Security Disability Insurance
  • Maximum Out of Pocket Cost: No limit
How long did you work / pay into Medicare?Monthly Premium
7.5 - 10 years (or more)$224/mo*
Less than 7.5 years$411/mo*

*Subject to increase.

Deductible, Coinsurance and Copayment

  • $1,288 deductible for each benefit period**

**Your benefit period begins the day that you enter a hospital or skilled nursing facility and ends when you have not received care for 60 days straight. A benefit period is not tied to the calendar year.

Days In HospitalCoinsurance Amount / Benefit Period
Day 1 - 60$0
Day 61 - 90$322
91+$644 coinsurance per each "lifetime reserve day" (up to 60 days over your lifetime)
Beyond lifetime reserve daysAll costs out of pocket

Medicare Part A Penalties

If you don’t sign up for Part A when you’re first eligible, you may have to pay a penalty equal to 10% of the Part A premium. The 10% premium penalty applies no matter how long you delay Part A enrollment. You’ll have to pay the premium penalty for twice the number of years you could have had Part A, but didn’t sign up.

Usually, there’s no late enrollment penalty (10% for each full 12-month period) if you sign up for Part A and/or Part B during a Special Enrollment Period. If you think you may need to sign up during the Special Enrollment Period, check to make sure you qualify.

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If you qualify for premium, free Medicare Part A and have a spouse or same-sex partner, your partner is eligible for premium-free Medicare A after the Defense of Marriage Act was ruled unconstitutional in 2013.

Medicare Part B – What it Costs

Part B will cost you differently based on the following situations:

Monthly Premium

  • Most people pay $121.80 each month (depending on your income)
  • Maximum Out of Pocket Cost: No limit

Deductible, Coinsurance and Copayment

  • Most Part B plans require out of pocket copayments, coinsurance and monthly premiums determined by your income and assets. The yearly deductible for all plans is $147
  • Generally, you will pay $166 per year for your Part B deductible. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you’re a hospital inpatient), outpatient therapy, and durable medical equipment

Medicare Part B Penalties

If you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty. The monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn’t sign up for it.

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You will have to pay the premium penalty for a long as you have Medicare.

Usually, there’s no late enrollment penalty (10% for each full 12-month period) if you sign up for Part A and/or Part B during a Special Enrollment Period. If you think you may need to sign up during the Special Enrollment Period, check to make sure you qualify.

Part D – What it Costs

Monthly Premium

  • In 2015, the average stand-alone prescription drug plan premium was just under $37/month, although there is wide variation in price from one plan to another.

Premiums can change from one year to the next, making a plan a better or worse value when compared with the other available options for the coming year. The plan with the lowest premium doesn’t necessarily provide the best value because you may incur higher out-of-pocket costs when you get your medications.

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There are four ways to pay the Part D premium:

  1. Deducted from your personal account
  2. Charged to credit or debit card
  3. Billed monthly in the mail
  4. Deducted from your Social Security check (contact carrier)

The Part D Donut Hole (Deductible and Coinsurance)

The Donut Hole is a coverage gap exclusive to Part D Medicare. Like a traditional doughnut that has dough – then a hole – then more dough, the Plan D provides coverage for prescription drugs — then a hole — then more coverage.

This gap has been shrinking and is projected to not exist by 2020. However, since it is still currently very real, you can educate yourself on how it may impact your coverage below.

Donut Hole Highlights

  • 1 in 5 medicare beneficiaries enrolled in Part D will fall into the donut hole
  • 71% of those who reach the donut hole will do so again every year
  • If you enter the donut hole in 2016 you’ll receive a $250 rebate check
  • If you enter the donut hole in 2017 you’ll receive a 50% discount on brand-name prescription drugs

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Use the Medicare.gov ‘Part D Plan Finder Tool’ to help you select the best prescription drug plan to meet your needs.

How the Donut Hole Works

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For more information about the Donut Hole, refer to Medicare.gov.

Part D Penalties

Like Part B, you are still eligible for Part D prescription drug coverage if you don’t enroll when you’re first eligible, but you may pay higher premiums if you enroll later on. The fine is 1% of the average Part D premium price for each month you delay buying into a Part D plan. In 2015 the average Part D premium price is $34.10 per month. That means you’ll owe about $4.09 per month extra for every year you delay.

Medigap – What it Costs

Medigap plans will cost you differently based on the following situations:

Monthly Premium

  • There are 10 different Medigap “letter” plans. Coverage of each type of plan must be identical. However, premiums can vary. Shopping around for the best rate is a must.

There are three ways in which insurers set Medigap rates*:

1. Community-Rated Pricing2. Issue-Age-Rated3. Attained-Age-Rated
Enrollees are charged the same premium regardless of age. So, a 65 year-old enrollee will pay the same premium as an 85 year-old enrollee. Premium can change over time, but they change by the same amount for all enrollees.Premiums are based on the age of the purchaser. So, the older the person is at the time of purchase, the higher the premium. For plans with this rating structure, enrolling as soon as you’re eligible for Medicare coverage will help ensure lower premiums.Premiums go up as the insured person ages. These plans are often the least expensive option when you first become eligible for coverage. However, the premium will increase as you age.

* Other factors like inflation and medical cost trends will also affect price of the plan

Medigap Penalties

If you don’t enroll during your initial enrollment period, you may have to pay a higher premium. Unfortunately, you may be declined altogether if you’re in poor health, as carriers are allowed to use medical underwriting after your initial enrollment period has passed.

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How can I pay less for Medigap coverage?

  • Make sure you enroll as soon as you turn 65. This will help guarantee coverage with no premium rate-ups based on your medical history
  • Some Medigap carriers offer discounts that might apply to you. Some insurers offer discounts for women, non-smokers, married people, and for paying annually. Many states also offer a health insurance assistance program, providing up-to-date Medigap insurance information and a list of qualified private insurers.

Part C – What it Costs

Part C will cost you differently based on the following situations:

Monthly Premium

  • Whether the plan charges a monthly premium
  • Whether the plan pays any of your monthly Medicare Part B (Medical Insurance) premium
  • All Medicare Advantage plans must limit maximum out-of-pocket (not counting prescriptions) to no more than $6,700. Many plans have out-of-pocket limits below this threshold. However, it’s important to consider the maximum out-of-pocket when comparing policies. The median out-of-pocket amount for Medicare Advantage plans in 2016 is $5,800. This is a 3.5 percent increase from 2015’s median out-of-pocket limit, but it’s still well below the maximum allowed by law
  • Maximum Out of Pocket Cost: Plan dependent, but always a limit

Deductible, Coinsurance and Copayment

  • Some plans have deductibles, others do not
  • Copayments for doctor’s visits differ dramatically, as do the actual health care services and how often enrollees receive those services. Close attention to the details is called for when assessing these plans.
  • These plans come at a lower cost, however, since you are limited to network, you must adhere to supported services to get these benefits.

How to Save Money on Medicare Plans

Here are some ways you can lower the cost of your Medicare expenses:

  • Seek alternative treatments that are less expensive (consult with your doctor first)
  • Use preventative screenings to find issues at an earlier stage
  • Switch to generic drugs
  • Use a home delivery pharmacy service to save on gas and time, and are sometimes even cheaper than retail
  • Buy prescriptions in bulk, such as a 90 day supply rather than a 30 day supply which may be cheaper
  • Use dose optimization by taking fewer pills at a higher strength (consult with your doctor first)
  • Adhere to your medication as prescribed – at the right time, dose and as long as your doctor recommends which will avoid re-treating the same problem
  • Don’t pay cash because it won’t count toward your deductible

What is a Medicare Summary Notice?

Your Medicare Summary Notice (MSN) documents all of the healthcare expenses you have acquired over the previous three months. It also will detail what was covered and not covered by insurance. If Medicare owes you a refund, the MSN will be mailed as soon as the claim is processed. Also, the MSN is not a bill, but rather a list of the services you received and the amount you were or are projected to be billed by a hospital, doctor, or another provider

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Keep receipts and bills for comparison to the MSN. This will help ensure accuracy for both parties.

  • If you have other coverage, check to see if it covers anything that Medicare did not.
  • If you paid a bill before getting the MSN, compare the MSN with the bill to make sure you paid the right amount for the services.
  • File an appeal if you disagree with the summary.

If you don’t agree with a bill, Medicare gives you the option to appeal your charge. Billings errors can occur through various means such as insufficient or lack of documentation or incorrectly filing information. Make sure to keep accurate and thorough records of your Medicare bills to compare to.

How to File an Appeal

  1. Complete an “Appointment of Representative” form

After review: Your appeal is approved, and a new MSN is sent with an updated summary

– Or –

Your appeal is not approved, in which you can appeal the decision and pursue through:

  • Redetermination — asking the plan to reconsider its denial
  • Reconsideration — asking an Independent Review Entity to review a redetermination denial
  • Administrative Law Judge Hearing — asking a special judge to review an unfavorable decision by the IRE
  • Medicare Appeals Council Review — asking the Council to review an unfavorable decision by the administrative judge
  • Federal Court Hearing — asking a court to review an unfavorable decision by the Council.

About Amazing Healthcare Consultants

Founded in 2011 by Dr. Carol DeVore and Rachel Decena, Amazing Healthcare Consultants provides clear sightlines into your loved one’s healthcare through personal patient advocacy and insurance advocacy. Making confident and educated healthcare decisions is the ultimate peace of mind, and as an independent agency, Amazing Healthcare Consultants puts the patient first and fights for the best care and coverage possible.

To learn more about Amazing Healthcare Consultants or to schedule a free consultation, request a call from us.