With the arrival of our summer residents now in full swing, it seems appropriate to address some of the basics of Medicare in the upcoming articles. This may be of particular importance if one is aging into the system or new due to disability qualification. However, we old timers can often benefit from refresher courses, so please read on. If you are not yet aware, Medicare is the best health insurance coverage for the price in America (perhaps the world!?). All you need to do is have someone help you navigate the myriad of rules, acronyms and volumes of advertising that comes with turning 65! Hopefully, these few words will assist you in better understanding the types of programs available and when one is allowed to apply for each. To do this, it is best to start by defining some of the more important terminology:
A. Basic Medicare – This is coverage offered only through Medicare: Part A (Hospital Coverage) and Part B (Outpatient services). A person qualifies for Basic Medicare by turning 65 or by being on Disability Social Security for two years and anyone with end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant).
- Part A, as a rule, is paid for through taxes collected during your work years. When admitted to a hospital, there is a $1,364 deductible during the first 60 days, with subsequent deductibles depending on the time in hospital. Additionally, Part A covers skilled nursing, home health care and hospice care.
- Part B has a monthly premium ($135.50) which can be adjusted based on income and/or when one ages into Medicare. This coverage also has an annual deductible (currently $185) plus a 20% coinsurance payment of Medicare approved expenses. Covers such items as office visits, surgeons, ER and urgent care, lab work and ambulance (air and ground).
B. Supplements – These plans (all designed by Medicare) fill in some, up to all of the deductibles, co-payments and co-insurance of Basic Medicare. Often called “Medi-Gap” Plans, the only difference between insurance companies is the premium charged! There can be as much as $100/month difference, so PLEASE shop and compare before you buy.
C. Medicare Advantage Plans – Introduced in 2003, MA-PD plans such as HMOs (Health Maintenance Organizations), PPOs (Preferred Provider Organizations), PFFS (Private Fee For Service) and PDPs (Prescription Drug Plans) are new plans that change the way Medicare works. For the most part, these are Network organizations set up to control expenses. While usually less costly than Supplements, these plans have both deductibles and co-payments/co-insurance that mirror Basic Medicare. These plans are available with or without a PDP and PDPs can be sold on a stand alone basis with a Supplement for Part A and Part B coverage.
D. Acronyms- As with all governmental correspondence, the use of acronyms complicate solid communications and creates a need for educational articles such as this. Some of the common acronyms are listed above, but two of the most important and most confused are discussed in the following paragraphs.
- OEP (Open Enrollment Period) for Supplements This is usually the month you turn 65 and continues for 5 months after your birth month. However, it can also be the month one first has Part B of Medicare, also continuing for 5 months. It is important to know that during this time preexisting health issues cannot be used to determine acceptability by any insurance company.
- OEP(Open Enrollment for MAPD plans). This allows one “like change” between January 1st and March 31st.
- AEP (Annual Enrollment Period) This term applies to only Medicare Advantage policies, such as MA-PDs and PDPs. Currently the AEP runs from October 15 through
- December 7 of each year. Other than OEP, this is the major time during the year that a MA-PD/PDP can be
- changed. There are other SEPs (Special Election Periods) that will be covered in subsequent articles.
Hopefully this short narrative has created an interest in learning more about this excellent health insurance coverage. Readers should feel free to call or email in specific questions you would like answered in subsequent write ups.
Carl Dye is an independent insurance broker. Send your questions and concerns about Medicare products, plans and regulations to firstname.lastname@example.org or contact him at 928-245-1388.