What You Need to Know
If you are planning to retire within the next year, it’s time to start thinking about Medicare and your coverage options. Understanding how Medicare works and transitioning to new medical coverage can seem confusing and overwhelming. We are here to make it easier.
Who is Eligible for Medicare
Medicare is a federal health insurance program that serves people ages 65 and older or people with qualifying disabilities. To qualify for Medicare, you must be a legal resident living in the United States for at least five consecutive years and meet one of the following requirements:
Age 65 or older
Younger than 65 with a qualifying disability (a medical or physical condition lasting, or expected to last, more than 12 months and that prevents you from working)
Any age with end-stage renal disease (permanent kidney failure requiring dialysis or kidney transplant)
Some people may also be “dual eligible,” meaning they are eligible for both Medicare and Medicaid, also known as MediCal. When enrolling in Medicare for the first time, there are many health plan options you can consider. Your choices can be divided into three options: Original Medicare, Medicare Advantage or insurance provided by your employer.
Steps You Will Take to Get Started
Here is an overview of the steps you will take to get the ball rolling:
Confirm you are eligible for Medicare
Read about Medicare costs so that you can be prepare for what you will pay
Apply for Medicare at your local Social Security office or online at their website
Receive and verify your red, white and blue Medicare ID card. Does it show you are enrolled in both Part A and Part B? You absolutely need Part B if Medicare will be your primary coverage.
Read about your coverage options: Medicare Advantage or Medicare supplemental insurance coverage
Learn about Part D and determine which drug plan best suits you
Get someone on your side by working with an insurance agency like us. Our help is free and we are always available for your questions.
Review your coverage annually to make sure you are getting the most appropriate insurance at the right price
When anyone says Original Medicare they are talking about Medicare without supplements, as issued from the government. Original Medicare has two parts. Part A and Part B.
Medicare Part A covers hospital, hospice, and skills nursing facility coverage. Whenever you are admitted to a facility, Medicare Part A is covering your stay.
Medicare Part B covers your outpatient care like doctor visits, outpatient labs and tests. Part B also covers durable medical equipment like walkers, knee and neck braces, and wheelchairs.
Original Medicare is often referred to as an 80/20 plan, meaning that in your usual outpatient visits you can expect to pay for 20% of your costs. Also, there is a major deductible for hospital stays. If you need a blood transfusion Medicare will not pay for the first three pints. Also Original Medicare does not cover prescription drugs. There is no cap on how much you can spend on copays, deductibles, and extra charges. For that reason people look for ways to protect themselves from spending more than necessary on their health care.
Most people opt for either a Medicare Advantage Plan or a Medicare Supplement Plan
Medicare Advantage Plans
Medicare Advantage Plans, often referred to as Part C, are structured like HMO or PPO plans but with all the protections of Medicare in place. Medicare Advantage plans, unlike Original Medicare cap the maximum amount of money you are liable to pay in high usage years. In a year when you get $100,000,000 dollars of coverage your maximum out of pocket cost could be as low as $3,400.
Medicare Advantage plans offer the benefits and coverage of Medicare Parts A and B as well as prescription drug coverage. Think of Part C as a combo plan. They combine the benefits of Part A and Part B often adding extra benefits that Original Medicare does not offer such as:
- Dental Coverage
- Vision Transportation
- Hearing Aid Coverage
- Chiropractic Care
- Free Gym Memberships
- Free Over the Counter Medicines, Supplements and Sundries
Medicare Supplement Plans
Medicare Supplement Plans, often referred to as Medigap Plans cover all or part of the 20% that Medicare does not cover. You will see Medicare Supplement / Medigap Plans with names like Plan F, Plan G, or Plan N. Whenever you see the word ‘Plan’ ahead of letter you can be sure it is referring to a Medicare Supplement. When you hear the word ‘Part’ ahead of a letter of the alphabet we are referring to Original Medicare, like Part A and Part B.
Prescription Drug Plans
Prescription Drug Plans, referred to as Part D, cover your prescription drugs. Medicare has not covered prescription drugs since 2006 so every Medicare beneficiary must either join a Medicare Advantage plan that covers prescriptions or purchase a standalone prescription drug plan.
How to Understand Medicare Plans
Choose a Medicare Supplement (Medigap) and add a stand alone Part D
(prescription drug) plan
Medicare Part D (Prescription Drug) Plans