By Diane Leveton, CLTC
So when your 65th birthday rolls around, all
of a sudden you are on EVERYONE'S mailing list!
How do you digest all this advertising and find
out the real information? What does Medicare
cover? What types of Medicare supplemental
insurance, what do they cover, and what are the
differences between types of plans? Nine out of
ten Medicare beneficiaries have private Medicare
Supplement insurance to help bridge the gap
between Medicare's coverage and out-of-pocket
spending. So let's explore what they are and how
to choose the right plan for you.
Employer based plans versus Medicare
plans:
Many people have the option of
keeping their employer based plans when they
turn 65 or changing to a Medicare plan. Check
with the employee benefits department to see if
you need to apply for Medicare part B when you
turn 65. Find out whether you will be covered
under a regular health plan or a Medicare
version of your group health and what your
premiums will be. That information will help you
and an insurance professional determine what is
best for you and your family - staying with your
employer plan or choosing a Medicare plan.
Medicare Supplemental enrollment:
There is an open enrollment period for Medicare
supplemental insurance. The enrollment period is
3 months before, your birthday month, and 3
months after. This enrollment period is
extremely important. This window of opportunity
allows you to get your supplemental coverage
regardless of your health conditions. There is
also an open enrollment period of 60 days after
leaving a group health plan after age 65. If you
have health concerns, it is important to sign up
during these enrollment periods.
Let's look at how Medicare works in order to
understand how Supplemental Plans work.
MEDICARE ABC + D
There are four main parts to Medicare.
- Part A is the hospital coverage.
This coverage is free to you if you are
eligible for Medicare. After a deductible
($1068 in 2009), it covers the first 60 days
of care. After 60 days, there are daily
co-pays ($256/day for days 61-90, $534/day
for days 91-150) until you hit day 150,
after which you are responsible for 100% all
costs. Part A also pays for skilled nursing
and limited home care.
- Part B is your doctor coverage.
It covers doctor costs while hospitalized,
in clinics and outpatient surgeries. When
you receive your Medicare card, you will
automatically receive both parts A and B
unless you elect to drop Part B while you
have regular health insurance. The monthly
premium for this coverage taken out of your
Social Security benefits, but unless you
want to pay surgeons fees out of your own
pocket, it is highly recommended to take
this coverage also.
- Part C is your supplemental plan,
either a Medigap or Medicare Advantage
plans. We will look at these separately
below.
- Part D is the prescription drug
coverage that began in 2006. You may have an
independent coverage as with Medigap plans
or it may be bundled with your Medicare
Advantage plan. It will have a separate cost
although it may be combined in the total
cost of an Advantage plan. You may also have
credible coverage through the VA, or your
retirement health plan.
Medicare does NOT pay for the
following:
Annual Exams ( other than the 'Welcome to
Medicare' physical within the first 12 months)
Dental Care, Routine eye or ear exams, eye
glasses or hearing aids, routine foot care or
orthopedic shoes, immunizations (it does pay for
vaccinations), most chiropractic care.
SUPPLEMENTAL PLANS
Medigap Plans
Medigap Plans are standardized
plans designed by Medicare and administered by
insurance companies. These plans are labeled
Plans A-L. Plan A is the basic plan; Plan J
provides the most comprehensive coverage. Plans
K and L have lower monthly costs in exchange for
some co-pays. Companies may only offer some of
the plans in any one state, but the monthly cost
may vary between companies for the same plan.
The advantage of Medigap plans are that they can
be used anywhere in the country, and you choose
which doctors that you see. Most plans have no
deductibles or co-pays for normal care. Most
physicians that take Medicare, take these plans.
Most companies offering Medigap plans require
medical underwriting if you are not in an a
guaranteed enrollment period. Therefore, it is
best to enroll in these plans when you are first
eligible for Medicare, or when losing insurance
coverage from another carrier because they are
no longer offering a plan in your area.
You must get a separate Prescription Plan
with Medigap plans. However, that allows you to
adjust your prescription coverage annually as
needed, without affecting your Medigap Plan.
Medicare Advantage Plans
Medicare Advantage Plans are
managed health care plans designed by the
insurance company within Medicare guidelines.
Most plans require you to use doctors that are
signed with the network, within the region that
the plan operates to get the lowest cost
coverage. All other care is on an emergency
basis only or at higher co-pays. Some plans may
also include some dental and/or vision coverage,
usually preventative care that is not available
with traditional Medigap plans. A few plans are
also offering alternative care such as
chiropractic, naturopathic and acupuncture as an
optional benefit. Most Medicare Advantage plans
include Prescription coverage unless you have
other coverage such as through the VA.
To help you decide what type of plan will
suit you best, consult an insurance professional
that handles multiple types of plans. For more
information on Medicare Supplement insurance and
copy of Medicare's handbook "Choosing a Medigap
Policy: A Guide to Health Insurance for People
With Medicare" by calling the National Medicare
Hotline at 1-800-MEDICARE (1-800-633-4227) or
TTY/TDD 1-877-486-2048.
Diane Leveton, CLTC is a licensed independent
insurance agent in Oregon. She can be contacted
at
diane.leveton@gmail.com. Licensed insurance
agents agents are not in any manner affiliated
with or sponsored by the U.S. Government or the
Federal Medicare Program.
[1]
Source: America's
Health Insurance Plans, Medigap (Published
6/10/2004).
