Medicare

What is Medicare?

The Medicare maze can be very complex - Medicare Part A, Medicare Part B, Medicare Part C, Medicare Part D, and Medicare Supplements (Medigap) Plans.  Let's break it down:

President Lyndon B Johnson signed the Medicaid and Medicare programs into law July 30, 1965.  Medicaid became effective January 1, 1966, and Medicare became effective July 1, 1966.  Medicare covers close to 54 million people.

Medicare is for:

people age 65 or older 
people under age 65 with certain disabilities
people of any age with End-stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant)

Medicare is a fee-for-service health care program in which the government pays health care providers directly for services that fall under Parts A (Hospital Insurance) and B (Medical Insurance) of Medicare benefits. Deductible, copayments, or coinsurance may apply. 

Medicare is divided into four parts. 
 

• Medicare Part A (hospital insurance) helps cover: inpatient care in hospitals, skilled nursing facility care, hospice care and home health care.  You usually don't pay a monthly premium for Part A coverage if you or your spouse paid Medicare taxes while working.
• Medicare Part B (medical insurance) helps cover: services from doctors and other health care providers, outpatient care, durable medical equipment, home health care and some preventive services.  You pay a Part B premium each month.  However, if your modified adjusted gross income as reported by your IRS tax return from 2 years ago is above a certain amount, you may pay more.
• Medicare Part C (Medicare Advantage): includes all benefits and services covered under Part A and Part B of Medicare; usually includes Medicare prescription drug coverage (Part D) as part of the plan; run by Medicare-approved private insurance companies; may include extra benefits and services for an extra cost.
• Medicare Part D (Medicare Prescription Drug coverage): helps cover the cost of prescription drugs; run by Medicare-approved private insurance companies; may help lower your prescription drug costs and help protect you against higher costs in the future. 

What Medicare options are available?

There are three main ways to get your Medicare coverage - 1) Original Medicare only with a Medicare Prescription Drug plan (Part D); or 2) Original Medicare with a Medicare Prescription Drug plan (Part D) and a Medicare Supplement (Medigap) policy; or 3) a Medicare Advantage Plan (Part C). 

1. Original Medicare - Coverage that is managed by the federal government.  You generally have to pay a portion of the cost known as a deductible, coinsurance or copayment before Medicare pays its share.  Some individuals refer to the deductible, coinsurance or copayment as a "gap".  You will need to enroll in a Medicare Prescription Drug plan (Part D) in order to obtain coverage for out-patient prescription drugs, unless a creditable prescription drug plan is provided by your employer group/union retiree plan or another source.
2. A Medicare Supplemental Policy, also known as Medigap, - A Medicare Supplement (Medigap) policy is health insurance sold by private insurance companies. approved by each state to fill the gaps in Original Medicare coverage.  Original Medicare would be your primary coverage and the Medicare Supplement (Medigap) Policy will be secondary to Original Medicare.  A Medicare Supplement (Medigap) policy can help pay your share (like deductible, coinsurance, or copayments) of the costs of Medicare-covered services.  Insurance companies generally can't sell you a Medigap policy if you have coverage through Medicaid or a Medicare Advantage Plan.  Available policy options are: A, B, C, D, F, High-deductible F, G, K, L, M and N.  Not all types of Medicare Supplement (Medigap) policies may be available in your state.  Medicare Supplement (Medigap) Policies sold in Massachusetts, Minnesota or Wisconsin are different. You will need to enroll in a Medicare Prescription Drug plan (Part D) in order to obtain coverage for prescription drugs, unless a creditable prescription drug plan is provided by your employer group/union retiree plan or another source.
3. A Medicare Advantage Plan, also known as "Part C" or "MA Plans" - A Medicare Advantage Plan (like an HMO or PPO) is another way to get your Medicare coverage.  If you join a Medicare Advantage Plan, you still have Medicare.  However you will get your Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) coverage from the Medicare Advantage Plan, not Original Medicare.  These plans must cover medically-necessary services. However, plans can charge different copayments, coinsurance, or deductibles for these services than Original Medicare.  Medicare Advantage plans are offered by Medicare-approved private companies, they are not Medicare Supplement (Medigap) plans. Medicare Advantage plans may include coverage for prescription drugs (Part D).  

Note: Group / Union Retiree coverage options may vary.  Please contact your benefits administrator before you make any changes, or before you sign up for any other coverage. 

Contact us today to learn more about coverage options, enrollment periods, Medicare deductibles, etc.. We are happy to work with you to determine which Medicare options works best for you. Contact Us.

Source: Medicare & You (Revised December 2014); and Choosing A Medigap Policy - A Guide to Health Insurance for People of Medicare (Revised October 2014)