Understanding Medicare and taking the next step

The Island Now

By Julie Ward-Abdo

Medicare is a federal health insurance program available to people 65 and older, or those under 65 who have been receiving Social Security disability benefits for more than 24 months.

While this valuable program helps with your health-care costs, Medicare does not cover all medical expenses. It’s important to understand what Medicare covers and the coverage choices available to you.

Medicare consists of four parts. Part A covers inpatient hospital stays, skilled nursing facilities and hospice care. Part B covers doctors’ visits, outpatient care, diagnostic tests, lab services and preventive services. Medicare Part A and Part B are considered Original Medicare and are provided by the federal government.
Part C and Part D are offered through private insurance companies. Part D is prescription drug coverage. Part C is more commonly known as Medicare Advantage.

Medicare Advantage plans provide the benefits of Part A and Part B and usually includes Part D. Many Medicare Advantage plans offer additional services such as vision care, dental benefits and wellness programs.

Once you enroll in Original Medicare it is very important to understand your medical
costs and coverage choices and to choose carefully. Medicare Part A has a benefit period deductible of $1,340.

A benefit period is 60 days. Part B Medicare has an annual deductible of $183.

Once the deductible is met you are responsible for 20 percent co-insurance. It is important to know that Medicare does not have a maximum out of pocket so there is no cap on the costs you might incur.

To determine the type of coverage that would work for you, you need to analyze the doctors you use, the medications you take, where you live and your financial budget.

The minimal coverage that is considered creditable coverage is original Medicare with a prescription drug plan. If you decide not to enroll in Part D when you’re first eligible for Medicare, you’ll likely be subject to a late enrollment penalty.

If you decide to enroll in a prescription drug plan you have to choose one. Each prescription drug plan has a formulary, which is a list of covered drugs. The formularies vary by plan. The key is to find a plan that offers coverage for the drugs you take at a price you can afford.

Many people look at Supplemental Insurance more commonly known as Medigap Insurance, to help pay for the Medicare deductibles, coinsurance and copayments.

By choosing a Medigap plan, Medicare remains your primary insurance enabling you to go to any doctor or hospital that accepts Medicare nationwide. There is a range of choices available.

Medigap policies are standardized so that all policies identified by letters (A, B, C, F, G, K, L & N) offer the same benefits no matter which insurance company you purchase it from. For this reason, premiums and customer service are important when looking for a plan. Medigap plans do not include prescription drug coverage. If you purchase a Medigap plan you must also purchase a stand-alone prescription drug plan.

Medicare Advantage plans (Part C) are offered by private insurance carriers that contract with Medicare. If you choose to get your coverage through a Medicare Advantage plan (MAPD) you will use the plan for all of your healthcare needs, rather than Original Medicare.

You still have to pay your Part B premium. The premiums for Medicare Advantage plans tend to be low and you pay co-pays and/or co-insurance for medical services. Medicare Advantage Plans must have annual limits on out of pocket costs to protect you from excessive charges.

These plans may require you to see health care providers in their network and can insist on referrals from your primary care physician before seeing a specialist.

Most Medicare Advantage plans include prescription drug coverage. Every year you have the ability to review and change your plan during the annual enrollment period which is between Oct. 15 and Dec. 7 and the new plan starts on January 1st.

With all of these choices it is important to do your homework before making any decisions
regarding the direction you want to take for your healthcare needs.

Julie Ward-Abdo senior health plan finder

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