What is Medicare?
Medicare was started in July of 1965. It is provided by the government and pays fees for your care directly to the doctors and hospitals you visit. Part A helps with hospital cost and Part B helps with doctor and outpatient care. In 2005, the government added part D and this helps pay for prescription drug costs. Part D is covered later in this newsletter, but you need to know you’re required to have “credible drug coverage” as part of your plan.
Part A (Hospital Coverage)
Part A helps with the cost of your inpatient hospital stays and skilled nursing care after a hospital stay. Medicare part A premium is free to you as long as you have worked at least 10 years in this country. Although the monthly premium is free, the deductibles and copays are not. To walk into a hospital will cost over $1,400 and if your stay is longer than 60 days, then a copay of over $300 is added on for days 61-90 and over $600 per day for days 91-150.
Part B (Doctors Visits)
Part B helps with doctor visits including outpatient care at hospitals and clinics, lab tests and some skilled nursing care. The nice part is you can see any qualified doctor who is eligible to participate in Medicare and who is accepting new patients. There is a monthly premium for Part B and most people pay $148.50 per month, but if you’re single and making more than $88,000 per year or married making over $176,000, you will pay a higher monthly premium. As far as copays, you’ll pay the first $203 then generally Part B pays 80% of your doctors’ fees and you are responsible for the remaining 20%. In our experience, the Part B 20% that you are responsible for puts you at unlimited financial risk. (We’ll talk later about ways to limit your risk.)
Initial Enrollment Period
This period consists of a 7 month window. It starts 3 months before your birthday month, the month of your birthday and three months after your birthday month. Keep in mind that if you wait to enroll in the last 3 months it can delay the start date of your Part B Medicare.
Now that you’ve enrolled in Medicare you have a choice from a number of different commercial insurance companies to help protect you from the costs original Medicare does not cover. That is where the benefits of working with Merrill Insurance Services,(MIS), come in. MIS does not work for Medicare nor do we work for any specific insurance carrier. We are independent brokers representing the top plans in our area. We can take the guess work out of determining which plan is better suited for your needs, whether you are healthy, have a lot of expensive medications, chronic conditions such as diabetes or heart disease, or are struggling financially we can help and we do this at no cost to you. If you call an insurance carrier’s (800) number to sign up and have an issue months later the likelihood of you connecting with that same super, great agent you enrolled with is slim to none. The cost for your plan is the same whether you go direct or work with MIS, and we are here as your advocate to help with issues you may have. MIS is paid directly from the carrier of the plan we (Agent/Client), select and MIS, is paid the same for all the available plans in your area. This makes MIS an unbiased resource for any plan we agree meets your needs.
Part D (Prescription Drug Coverage)
Part D helps with the cost of prescription drugs. Part D plans are sold by private companies and range in price anywhere from $15 to over $100 per month. WORD OF WARNING: You will read that Part D is optional. The problem is if you don’t sign up when you first become eligible and decide to at a later date, you will be assessed a penalty and that penalty will stay with you the rest of your life. For example, a person turns 65 and doesn’t take medication and decides against enrolling in Part D. When they turn 70, their doctor prescribes an expensive medication and this individual decides to enroll into Medicare Part D. Shortly thereafter they receive a letter from Medicare stating their late enrollment penalty. In this example that person’s penalty would be roughly $25 per month for the rest of their life.
Medicare Supplement Plan
These are also called Medigap plans as they help you cover some or all of the costs that Medicare Parts A and B don’t cover. The nice part is you can see any doctor in the USA that participates in Medicare. For the freedom of seeing any participating doctor, the premium is higher. Remember you still keep paying your Part B premium and with a supplement plan, your Part D premium is separate and not built in like most Advantage plans are. When you turn 65, you have a guaranteed issue in a Supplement Plan and are ‘Guaranteed Renewable.’ That means the policy renews automatically from year to year as long as you pay the premium on time.
Medicare Advantage Plans (Part C)
Medicare Advantage plans are run by private companies. You have probably heard of United Healthcare, Anthem Blue Cross, Blue Shield, SCAN, Humana, Kaiser, etc. These companies offer Advantage Plans. They combine coverage for certain hospital costs, doctor visits and most include Part D coverage at no additional cost. In most plans you choose a primary doctor and your doctor has access to specialists within their group. Many plans offer additional benefits not offered by Original Medicare such as Vision, Dental, Hearing, Chiropractic, Acupuncture and Gym Memberships. Although you continue to pay your Part B premium, many Advantage Plans offer $0 monthly cost. All plans also offer Out-of-pocket limits on medical cost. (Remember the unlimited 20% you’re responsible for on Part B costs?) Each year you have a chance to change your coverage during the Annual Enrollment Period (AEP), which starts October 15th and runs through December 7th.