7 Things You Need to Know About Medicare
Medicare covers most health care and hospitalization costs for people over 65 and younger individuals with disabilities. For many people, losing Medicare would mean that they wouldn’t be able to afford basic health care. Not understanding the ins and outs of your health care coverage can be costly and stressful.
Here are seven important points you need to understand to make the right Medicare choice.
Traditional (Original) Medicare Insurance
Medicare Part A provides coverage for a portion of the cost of inpatient hospital care, skilled nursing facility admissions, hospice care and home health care. It typically costs nothing, as long as you pay Medicare taxes for a certain amount of time while working.
Meanwhile, Medicare Part B health insurance coverage is for doctor visits, mental health care, durable medical equipment (such as walkers or wheelchairs), preventive health care services like COVID-19 vaccinations and outpatient services. Unlike Part A, the cost of Medicare Part B insurance is based on your annual income and high earners will pay more for coverage.
Medicare Part D is prescription drug coverage available to Medicare beneficiaries for an additional monthly premium. While all Medicare Part D plans must cover drugs in certain protected classes, including those used to treat cancer and HIV/AIDS, each health plan has its own formulary, and prices may vary widely between plans.
Many people who opt for original Medicare, rather than a Medicare Advantage plan, pair it with a Medicare Supplemental plan (Medigap) if they do not have supplemental coverage through a former employer or union. Medicare Supplemental plan is a separate plan sold for a monthly premium to cover many of the expenses that people on original Medicare incur – such as copayments, coinsurance and deductibles.
What Preventive Services Are Covered By Medicare Part B Insurance?
Thanks to the Affordable Care Act, Medicare Part B health coverage provides a wide range of preventive health care benefits at no cost. These include:
An annual wellness visit.
Cardiovascular disease screenings.
Colorectal cancer screenings.
Diabetes screenings.
Certain vaccinations.
It’s essential to understand the small print here. For example, although many preventive services are covered under Part B at little or no cost, Medicare Part B covers wellness visits but not annual physical exams, says Adina Decker, an insurance assistant with The Decker Team.
Coverage can be confusing. Adina points to the shingles vaccine as an example of a preventative service that isn't covered under Part B. “The shingles vaccine is not covered under Part B; it is actually covered under Medicare Part D and can be very expensive. I recommend that people covered by an employer or ACA plan look into the cost before they go on Medicare since the cost may be lower or even free.”
What Is a Medicare Advantage Plan?
Some people opt to enroll in a Medicare Advantage plan offered through a private insurance company instead of signing up for original Medicare. Although Medicare Advantage plans often cost less in premiums than original Medicare, especially if paired with a Medicare Supplemental Plan (Medigap) with an additional, separate monthly premium, the network for a Medicare Advantage plan is generally tighter and you might need prior authorization or a referral to see a specialist. Instead of buying separate drug coverage, like you do with original Medicare, prescriptions are included in Medicare Advantage plans.
“People get attracted to the fact that many of these (Medicare Advantage) HMOs have no premium and I think that people get sometimes surprised by the fact that there are copays associated with that," notes Seth Decker, a health benefits professional. "It’s not like they pay zero. They still have to pay their Part B premium plus the copays and coinsurance that are part of an HMO. I speak to some people that get disillusioned because they think they can see a wider range of doctors when they can’t with an HMO. It’s much more restrictive.”
Medicare Advantage plans provide prescription drug coverage, and some also offer an over-the-counter drug allowance. They generally cover services not provided to traditional Medicare plan beneficiaries, including vision care, hearing care and dental services. Some Medicare Advantage plans might even cover the cost of services that aren’t strictly health care-related, such as transportation to medical appointments or meal delivery services.
Why a Medicare Advantage Plan Might Be Right for You
A Medicare Advantage plan may offer you some benefits.
“Medicare Advantage plans can have the advantage of nurse case managers to help people that are really ill," says Adina. "And they have a little bit of help with dental. It’s not the same as dental coverage; it’s a dental discount on coverage. They get extra benefits like fitness and some help with eye care. I always tell people that Medicare was invented in 1965. The doctors didn’t let those other people in the room. They didn’t recognize them. And it’s a huge hole. Medicare Advantage plans can help with that.”
If you have chronic health concerns or see a wide range of doctors, original Medicare combined with a Medigap plan would likely save you money over a Medicare Advantage plan. On the other hand, a Medicare Advantage plan is often the best choice for people with few health issues and medical expenses.
A three-step process is best when reviewing Medicare Advantage plans.
1. First and foremost is the cost of my prescriptions. The cost can vary widely between plans, so make sure you compare that first.
2. The next is to check the provider networks to make sure the providers you want to see are in the network.
3. Once you have narrowed down your list, then you can compare the benefits such as copays for services and the additional benefits such as dental, vision and hearing coverage.
Should You Should Apply for Medicare If You're Working?
For people still working when they turn 65, it’s important to understand the definition for credible coverage if you want to delay signing up for Medicare.
The first thing is that still working is not really enough. You need to be still working and have insurance as a result of that work, or your spouse be working and have insurance as a result of their work.
We’ve heard from people who either went part-time or have taken a job that is unrelated to their career over the course of their working life in their retirement. And so they are working, and they have insurance, but that insurance is a retirement policy or a COBRA policy based on former work and is not related to their current work.
So if you're insured through a retirement policy or a COBRA policy, it’s vital that you apply to Medicare when you first become eligible to avoid late penalties or risk not being able to get certain kinds of coverage, such as Medicare Supplemental Plans.
Do You Qualify for a Medicare Savings Program?
Low-income seniors and adults with disabilities may qualify for financial assistance from Medicare Savings Programs to help pay for health care. Unfortunately, it's estimated that only half of the people eligible for one of these programs – which help pay Medicare premiums and deductibles, coinsurance and copayments – are enrolled in one. You can visit the Medicare website and find out if you’re eligible for this assistance.
“People are leaving a few thousands of dollars on the table,” because these Medicare Savings Programs are very complicated and have an expiration date, says Adina. “So, if you don’t refile in time, you lose it (the Medicare Savings Program). You’re going along fine and all of the sudden your drug subsidy runs out. That’s a huge problem, and it’s the number one driver of people dropping out of plan; it becomes too unaffordable then.”
How to Change Your Medicare Plan
Once you’ve joined a plan during your initial enrollment period, you’ll have the chance to switch plans annually during the open enrollment period from Oct. 15 to Dec. 7. During this time, you can also switch from original Medicare to a Medicare Advantage plan or join, switch or drop your Medicare drug plan.
The Medicare Advantage open enrollment period runs from Jan. 1 to March 31 each year. During this time, you can either switch from one Medicare Advantage plan to another or switch from a Medicare Advantage plan to original Medicare with a separate Medicare drug plan.
