If you are about to join Medicare or if you have already enrolled in Medicare you have probably seen the wide range of Medicare coverage options available to you.
Part 1
Medicare is actually composed of four parts: Parts A, B, D, and C. Parts A and B are offered through the government and are considered to be Original Medicare. Part A covers inpatient services such as hospital stays, skilled nursing facilities, home health care, and hospice while Part B covers outpatient services including but not limited to emergency care, doctor visits, lab work, and durable medical equipment. In 2006, Medicare began contracting with private insurance companies in order to offer prescription drug coverage, known as Part D. In addition, Medicare also contracts with private insurance companies to offer Medicare Beneficiaries another choice in getting their Medicare coverage. This type of coverage is Part C also known as Medicare Advantage Plans. These plans include both inpatient coverage (Part A) and outpatient coverage (Part B), and may also include prescription drug coverage (Part D).
Medicare was designed to help you, the Medicare Beneficiary, with your healthcare costs; however, it was not designed to cover all of your healthcare costs. Therefore, there is a cost share that is passed onto you which includes premiums, co-pays, coinsurances, and deductibles. In addition, there are two main choices in which you can get your Medicare coverage: Original Medicare or a Medicare Advantage Plan.
Original Medicare has co-pays, coinsurances, deductibles, and a Part B premium for which you would be responsible and does not include an annual out-of-pocket maximum. If you have Original Medicare you may want to purchase a Medicare Supplement policy offered through private insurance companies to fill in the gaps of Medicare. If you do not have creditable prescription drug coverage, you may want to consider a stand-alone Part D plan as well.
Medicare Advantage Plans can charge different out-of-pocket costs than Original Medicare and can have different rules about how you get your services. The private insurance companies offering these plans are paid by Medicare a fixed monthly amount. These plans must follow Medicare’s rules and must cover all services that Original Medicare covers; except for hospice which is covered by Original Medicare even if you are in a Medicare Advantage Plan. They may also offer extra coverage such as dental, vision, hearing, and/or wellness benefits and may include Part D. These plans may include cost sharing such as a monthly premium (in addition to your Part B premium), co-pays, coinsurances, deductibles and are required to have an annual out-of-pocket maximum. Medicare Advantage Plans can change annually, therefore if you have a Medicare Advantage Plan you should review the Evidence of Coverage and Annual Notice of Change sent to you in the fall by your plan. You do not need a Medicare Supplement plan if you have a Medicare Advantage Plan. Medicare Supplements will not cover the deductibles, co-pays, or coinsurances of a Medicare Advantage Plan. To be eligible for a Medicare Advantage Plan you must be enrolled in Part A and Part B, live in the service area of the plan, and not have End Stage Renal Disease (except under specific circumstances).
You can make a decision about how to receive your Medicare coverage during certain periods. When you first become eligible for Medicare you may choose between Original Medicare and a Medicare Advantage Plan and may choose a Medicare Advantage Plan three months prior, the month of, and three months after you turn 65. During the Annual Election Period (October 15th – December 7th), you may move from Original Medicare to a Medicare Advantage Plan or a Medicare Advantage Plan to Original Medicare or you can switch from one Medicare Advantage Plan to another. During the Medicare Advantage Open Enrollment Period (January 1st – March 31st), you can make one move from a Medicare Advantage Plan back to Original Medicare or from one Medicare Advantage Plan to another Medicare Advantage Plan. In most cases, you are locked into your choice for the calendar year; however, some people qualify for a Special Election Period and can make a change during the lock-in period; this may include a move in or out of a service area, qualification for Low Income Subsidy, or losing group coverage.
Caroline W. Irwin is a local Independent Insurance Agent and founder of Coveside: Healthcare Coverage Options.
Medicare has neither reviewed nor endorsed this information.
Y0067_AGT_IrwinArticle2_1011_IA11/11/2011
Part 2
A change seen in 2011 was that Medicare is giving you more time to choose and join a Medicare plan. Open Enrollment (also known as the Annual Election Period) now begins October 15th and ends December 7th. During this period anyone can join, switch, or drop a Medicare Advantage Plan (Part C) and/or a Medicare Prescription Drug Plan (Part D) with a January 1 effective date.
There are different types of Medicare Advantage Plans: HMO (Health Maintenance Organizations), HMO-POS (HMO Point-of-Service), PPO (Preferred Provider Organizations), PFFS (Private-Fee-for-Service), and SNP (Special Needs Plans). In most HMOs, you can only go to doctors, other healthcare providers, and hospitals in the plan’s network, with the exception of emergency or urgent care situations. An HMO-POS plan is an HMO plan that may allow you to get some services outside of the plans network for a higher copayment/coinsurance and/or with some limitations. In a PPO plan, you pay less if you use doctors, other healthcare providers, and hospitals in the plan’s network and you may pay more if you use these services outside of the plan’s network, with the exception of emergency or urgent care. PFFS plans are similar to Original Medicare in that you generally can go to any doctor, healthcare provider, or hospital as long as they agree to treat you and accept the plan’s terms and conditions. SNPs are plans that provide focused and specialized healthcare for groups of people, such as those who have both Medicare and Medicaid, who live in a nursing home, or have a certain chronic condition. The availability of any of these plan types depends on the service area you live in.
To qualify for a Medicare Advantage Plan you must live in the plan’s service area, have Part A and Part B, and not have end stage renal disease (some exceptions may apply). If you join a Medicare Advantage Plan, you may get your prescription drug coverage through that plan. If you join a PFFS plan that does include prescription drug coverage, or if you join a PPO or HMO plan whether or not these plans include prescription drug coverage, you may not join a stand-alone Part D (Prescription Drug Plan): joining a stand-alone Part D will cause an automatic disenrollment from your Medicare Advantage Plan and return you to Original Medicare. However, if you join a PFFS plan that does not include prescription drug coverage, you may join a stand-alone Part D. In order to qualify for a stand-alone Prescription Drug Plan you must live in the plan’s service area and you must be entitled to Medicare in Part A and/or enrolled in Part B.
Medicare Supplement policies cannot be used to pay for any expenses you have under a Medicare Advantage plan such as copayments, deductibles and premiums; therefore, if you join a Medicare Advantage Plan you do not need to buy a Medicare Supplement policy nor can you be sold one. If you already have a Medicare Supplement policy when joining a Medicare Advantage Plan you will probably want to drop your Medicare Supplement policy. If you do so, you may not be able to get it back, however, if you join a Medicare Advantage Plan for the first time and you are not happy with the plan, you will have special rights to buy back a Medicare Supplement policy if you return to Original Medicare within 12 months of joining. The State of Maine currently allows up to two more years to move back to a Medicare Supplement plan without medical underwriting, however, you must do so during available enrollment periods.
Coverage and costs change yearly. If you join a Medicare Advantage Plan or a Prescription Drug Plan, your plan can change how much it costs and what it covers each year. In addition, even if your plan doesn’t change, your health and finances may have changed. It is important to review your coverage annually in order to determine your coverage remains appropriate for the following year.
Caroline W. Irwin is a local Independent Insurance Agent and founder of Coveside: Healthcare Coverage Options.
Medicare has neither reviewed nor endorsed this information.
Y0067_AGT_IrwinArticle1_1011_IA 11/09/2011