Medicare Coverage, Eligibility and Options
There are more than 10,000 adults aging into Medicare everyday in the United States. Medicare eligibility begins at age 65, regardless of your beginning date for social security. It is important that you timely file your application for Medicare coverage. Failure to file timely can cost you thousands of dollars in extra premiums, deductibles and out-of-pocket costs over your lifetime. The enrollment period begins three months before your birth month. If you file your application during that three month period, your coverage begins with your birth month. If you file during your birth month, your coverage begins the month following your birth month. If you wait until the three months after your birth month, you’ll wait for several months before coverage will begin. If you miss the enrollment period, you’ll wait until next year to begin your coverage.
The following information provides the basics for Medicare coverage. There are many decisions to make, and doing some homework can help you make the right decision.
Medicare Plans – The Basics
Part A, inpatient hospital insurance, covers hospitalizations, home healthcare, hospice care, skilled nursing facility stays and blood transfusions during hospitalization. If you’re already receiving Social Security, you will be automatically enrolled at 65. If not, go to www.medicare.gov or visit your local Social Security office to enroll — before your birthday month, or your coverage will be delayed.
Part A usually doesn’t charge a premium, but there are co-payments and a deductible of $1,132 for 2011. You can be charged the hospital deductible several times in a single year, depending on circumstances.
Part B pays 80 percent of doctors, supplies, outpatient services, physical or speech therapy and ambulance service. It does not cover prescription drugs, but under the new healthcare law, annual physicals and other preventive care are free. Unlike Part A, enrollees pay a premium for Part B. In 2011, new Medicare enrollees will pay $115.40 a month — slightly higher than most of those already on Medicare. Those with an annual income over $85,000 for individuals and $170,000 for couples pay higher premiums on a sliding scale.
Two warnings about Part B Medicare. First, if you don’t sign up for Part B during your eligibility window but then decide to enroll later, the premium goes up 10 percent for each 12-month period that you would’ve had Part B but didn’t — and there’s no cap. Say, for example, you wait five years to sign up. Your premium would then be 50 percent higher than someone who signed up on time. Obviously, this can cost you big money over the course of your lifetime.
If you have health insurance through your work or your spouse’s work, you can delay enrolling in Part B. But if your employer has fewer than 20 workers or if you are on a company retiree plan, you must enroll in Part B as soon as you turn 65. Your workplace or retiree plan will become a secondary plan. As soon as you stop actively working, contact Social Security and sign up for Part B.
Questions about a specific situation? Check with medicare.gov or your employer’s human resource office.
Second, remember that Part B has no cap on out-of pocket costs after Medicare pays its 80 percent. Most people buy a separate, private Medicare supplement commonly known as a “Medigap” plan that kicks in where Medicare leaves off.
There are 10 government-approved Medigap plans. The best plan depends on an individual’s health history and financial resources. Year to year, you can change plans.
Some individuals choose to opt out of Parts A and B and Medigap and instead choose a Medicare Advantage plan — known as Part C — in place of original Medicare.
Part C consists of Medicare Advantage plans. Think of them as managed care plans, with many including dental and vision care. If you decide not to take government Medicare (Parts A and B), that means you’re off the Medicare rolls and on an insurance company that works like an HMO, PPO or private, fee-for-service plan. For the first time ever, Medicare is requiring Advantage plans to limit out-of-pocket expenses to no more than $6,700 in 2011, and some policies offer even lower limits.
So what’s better — Medicare Advantage or Medicare Parts A, B, D and Medigap?
If you’re comfortable with managed care and sticking to doctors within a plan’s network, Medicare Advantage might work for you. If you want some flexibility, travel a lot or split your time between two homes, original Medicare plus Medigap plus Part D prescription drug coverage is usually better.
“I always tell people to start by asking their current doctors what Medicare Advantage plans they take,” Sarmiento says. “For many that’s the determining factor. They want to stay with their current doctor.”
Part D covers prescription drugs. There are many plans to choose from so advocates suggest you make a list of medications you’re taking and check if they’re covered under the plans you’re considering. There’s an online “plan finder” at www.medicare.gov that compares plans side by side.
Enrollees pay a regular plan premium, which varies according to coverage. Beginning next year, Part D enrollees whose income exceeds a certain threshold — $85,000 for individual tax filers, $170,000 for joint filers — will also have to pay an extra monthly adjustment pegged to income. This will range from an additional $12 to $69.10.
Counselors suggest you check Plan D every year because the list of covered drugs can change.
You can get additional assistance in determining the best coverage options for yourself at the following websites:
- http://www.medicare.gov/ – In addition to providing detailed information, at this site you can also compare and sign up for Medicare plans. Telephone: 1-800-MEDICARE1-800-MEDICARE FREE.
- http://www.medicarerights.org/ – This site has an interactive feature to help guide you through your choices. Telephone: 1-800-333-41141-800-333-4114 FREE.
In Florida you can obtain free one-on-one counseling from SHINE (Serving Health Insurance Needs of Elders) by calling 1-800-96 ELDER or going to this website: http://www.floridashine.org/.