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The ABCD’s of Medicare

Seniors ages 65 and above are eligible to receive Medicare. With all the ins and outs, it can be difficult to understand Medicare. Maybe you’re helping a parent who has Medicare, or maybe you’re getting ready to enroll yourself. We’ll try to simplify each type, and help you understand Medicare better.

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Types of Medicare Coverage

Traditional (Original) Medicare has three parts:

  • Part A: Inpatient hospital insurance
  • Part B: Outpatient hospital/physician insurance
  • Part D: Prescription drug coverage

To complement traditional Medicare, seniors can also purchase a Medicare supplement plan.

Managed Medicare

In addition to Parts A, B and D, there’s Part C or Medicare Advantage. Seniors can purchase this kind of plan through a private insurance company to help pay for their healthcare costs. These plans are typically less expensive than a supplement.

Eligibility

You’re eligible to receive Medicare benefits as soon as you turn 65. By entering a few pieces of information about yourself on Medicare.gov; you can check your enrollment anytime.

Medicare Premiums

Parts B, C (Medicare Advantage), D, and Medicare Supplement each have a monthly premium; Part A has no monthly premium. Find out more about 2013 Medicare premiums and deductibles.

With traditional Medicare, you pay 20%, Medicare pays 80%. You can choose to get a Medicare supplement plan to help pay for the 20% you’re responsible for paying.

More about Part A

Medicare Part A helps seniors pay for inpatient care in a hospital or skilled nursing facility (following a hospital stay), some home health care, and hospice care.

You’re eligible to enroll in Part A as soon as you turn 65. If you’re already receiving social security, you’ll be automatically enrolled in Parts A and B. If not, you can enroll online. It’s a good idea to enroll even if you have other coverage, especially since there’s no premium (monthly payment for coverage) for Part A.

When choosing a provider, make sure you choose one who “accepts Medicare reimbursement” and not just “participates in Medicare,” because you could pay up to 15% more.

Part A Tip: Many people don’t know Part A covers hospice care. As long as the hospice program you choose is Medicare-approved, you should pay nothing, and have no deductible. You only have to pay up to a $5 copayment for outpatient prescription drugs (for pain or symptom management). Find out more about Part A and hospice.

More about Part B

Medicare Part B, physician and outpatient hospital insurance, helps seniors pay for doctors’ services and many other medical services and supplies that aren’t covered by hospital insurance (Part A). Unlike Part A, there is a monthly premium for Part B that is paid in addition to any deductibles, coinsurance, or copayments.

You can enroll in part B three months before you turn 65 and for seven months after your 65th birthday. If you miss the enrollment window, not only will your coverage be delayed, your premiums will be higher. Use this Medicare.gov calculator to determine your late-enrollment penalty.

When choosing a provider, make sure you choose one who “accepts Medicare reimbursement” and not just “participates in Medicare,” because you could pay up to 15% more.

Part B Tip: Medicare Part B covers a wide range of preventive services to keep you well. With healthcare reform, that list has grown. Be sure to take advantage of free preventive and screening services.

More about Part C

If you’re enrolled in Parts A and B, you can join a Part C, or Medicare Advantage plan. These plans are offered by private companies and approved by Medicare. Medicare Advantage replaces your Medicare Part A and B coverage, and may also include limited coverage for prescriptions. Some people like Medicare Advantage plans because they generally cover more than Parts A and B such as extra days in the hospital after you have used the number of days that Medicare covers.

Seniors can either enroll during their initial enrollment period, or from October 15 – December 7 each year. Premiums vary based on your income level.

Part C Tip: The premiums are usually less expensive than getting Medicare and a supplement, but offer fewer options when it comes to providers.

More about Part D

Many seniors face hefty prescription drug costs. That’s where Part D, or prescription drug coverage, comes in.

If you’re enrolled in Parts A, B or C, you are eligible to enroll in Part D, too. The same enrollment window applies for Part D as for Part B – three months before you turn 65 and  up to seven months after. If you miss the enrollment window, not only will your coverage be delayed, your premiums will be higher. Use this Medicare.gov calculator to determine your late-enrollment penalty.

Enrolling in Part D is voluntary. According to Medicare.gov, you will pay a penalty if you choose to enroll later.

Part D Tip: Each year since 2010, the donut hole amount has been reduced by 10%. It will continue to go down 10% each year until it disappears in 2020. Then, you will only pay your normal 25% coinsurance after you reach your deductible. Coinsurance means Medicare pays 75%, you pay 25%. Since it’s 2012, and you still have a donut hole, the government has negotiated with brand name drug manufacturers to offer 50% off some prescriptions. Check with your local pharmacy to see if the discount applies to your medications.

More about Medicare Supplements (Medigap) Insurance

You may choose to get a Medicare supplement policy to help pay for some of the costs Medicare Parts A and B don’t cover, such as copayments,coinsurance, and deductibles. A Medicare supplement is different than a Medicare Advantage plan. A Medicare Advantage plan replaces your traditional Medicare coverage and provides benefits, whereas a Supplement plan picks up most of your out-of-pocket costs , so it supplements what Original Medicare covers.

Medicare Supplement Tip: A Medigap policy only covers one person. If both you and a spouse want coverage, you’ll need to purchase 2 separate policies.

As the healthcare law continues to roll out, we’ll keep you informed of changes that impact those who have Medicare. Follow HooPayz Blog to get the latest updates in your inbox.

Comments

  1. Jerry Ira Herman | 24 October 2016 at 1:10 pm

    Interested in prescription drug coverage

    • hoopayz | 10 June 2017 at 1:55 pm

      Hi Jerry, Prescription drug coverage is available through Medicare Part D or Medicare Advantage plans. Medicare.gov offers more details like specific formularies, sign up process, and next steps. Thank you!

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