In the first part of this "Medicare Information for You" series we discussed the influx of mail you can expect around your 65th birthday and unfortunately they aren’t all birthday cards. In this article we’ll try to cover what that information means to you.
When you receive your letter from Social Security with your red, white and blue Medicare card it will have your name on the card and your social security number with a letter behind it. It will also have the effective dates listed for Part A & Part B which are referred to as the “Original Medicare Plan.” Let’s look at what that means to you. Much of this information is taken from the 2008 Medicare & You booklet distributed by Centers for Medicare and Medicaid (CMS) which is sent each year to all Medicare recipients.
Medicare Part A (Hospital Insurance): Most people turning 65 are eligible to receive Medicare Part A without additional cost. This coverage applies to in-patient hospital, skilled nursing, home health and hospice care. Medicare covers a large portion of these hospital related costs, but not the whole bill. That’s where the Medigap or supplemental insurance plan comes in, which we’ll cover later.
Medicare Part B (Medical Insurance): When you receive your Medicare card you will automatically be enrolled in the Part B (medical insurance) coverage which covers doctor services, outpatient hospital care, some preventative services and durable medical supplies, etc. This coverage will cost most individuals a premium of $96.40/month for this medical/health insurance. If you are drawing Social Security, the premium will be taken out of your Social Security check. Otherwise you will be billed for this coverage quarterly. If you have other health insurance you may choose to postpone accepting Part B coverage until a later date, but make sure your current insurance is aware of your Medicare Part A coverage. You will need to let Social Security know you don’t want Part B yet and they will send you a new Medicare card reflecting only your Part A coverage effective date. You will need to contact them when you decide to start Part B coverage.
Medicare Part C (Medicare Advantage Plans) is another way to get your Medicare benefits. It combines Part A, Part B, and, sometimes, Part D (prescription drug) coverage. Medicare Advantage Plans are managed by private insurance companies approved by Medicare. These plans must cover medically-necessary services. However, plans can charge different co-payments, coinsurance, or deductibles for these services. Some of these Medicare Advantage Plans include prescription drug coverage.
It is your responsibility to make sure your doctors and hospitals accept these Medicare Advantage Plans (Medicare Part C)or you may be responsible for the entire bill.
Medigap (Medicare Supplement Insurance) Policies pick up many of the health care costs Original Medicare does not cover. The Original Medicare Plan pays for many, but not all, health care services and supplies (usually 80% of approved charges.) To help you pay your approximately 20% of out-of-pocket costs, you might want to buy a Medigap policy sold by private insurance companies. A Medigap policy is private health insurance designed to supplement the Original Medicare Plan. This means it helps pay some of the health care costs (“gaps”) that the Original Medicare Plan doesn’t cover, like co-payments, coinsurance, and deductibles. Some Medigap policies cover extra benefits for an extra cost. If you are in the Original Medicare Plan and you buy a Medigap policy, then both plans will pay their share of Medicare-approved amounts for covered health care costs.
Medigap policies only work with the Original Medicare Plan (Medicare Parts A & B), not with Medicare Advantage Plans (Medicare Part C.) They must follow Federal and state laws designed to protect you. Every Medigap policy must be clearly identified as “Medicare Supplement Insurance.” Medigap insurance companies can only sell you a “standardized” Medigap policy. Standardized Medigap policies are identified by letters (Medigap Plans A through L). That means that if a particular insurance company offers a Medicare Supplement Plan A, it will have the same coverage as any other company’s Plan A, only the cost of the coverage may vary from company to company.
The best time to buy a Medigap policy is during your Medigap open enrollment period which begins on the first day of the month in which you are both age 65 or older and enrolled in Part B. The Medigap open enrollment period lasts for 6 months. During this open enrollment period any company you choose has to enroll you. If you delay enrolling, the companies have the option of denying your application, especially if you have developed serious heath concerns such as diabetes.
Each year the Nebraska Department of Insurance and Nebraska Senior Health Insurance Information Program (SHIIP) compile a “Nebraska Comparison Guide for Medicare Supplement Insurance.” This free booklet explains the differences in the Medicare Supplement Plans, lists the names and phone numbers of all insurance companies offering this type of coverage as well as a price range for each plan. The 2008 version of this publication should be out in March. Contact SHIIP at 1-800-234-7119 to receive a free copy of this booklet.
The final installment of this series of articles will focus on the Medicare Prescription Drug Program and Medicaid. If you have questions please contact the SHIIP office at: 1-800-234-7119, Social Security Office at: 800-772-1213 or your can call Mary Loftis at UNL Extension in Burt County at 402-374-2929.
Written by: Mary Loftis, UNL Extension & SHIIP Volunteer
Reference used: 2008 Medicare & You distributed by Centers for Medicare and Medicaid
