Medicare

Because Medicare is a federal health insurance program, you must be a U.S. citizen or legal resident living in the U.S. for at least five years in a row to be eligible to enroll. In addition, you must be:

• Age 65 or older
  
• Younger than 65 with a qualifying disability
  
• Or any age and have End Stage Renal Disease. ESRD is permanent kidney failure needing dialysis or a kidney transplant.
  

Medicare eligibility is generally straightforward. But details such as eligibility to receive coverage without paying a premium and qualifying for other kinds of Medicare plans are a little more complicated. These may depend on factors such as your work history and health status, and are explained in the next sections.

Medicare Part A coverage, also known as hospital insurance, is provided by the U.S. government to cover medically necessary care that requires an overnight hospital stay. It also covers follow-up nursing care after a hospital stay, hospice care and some home health care for the homebound. Part A covers annual check-ups and many preventive services without requiring copayments. You’ll often hear Medicare Part A and Part B referred to as “Original Medicare”.

Eligibility & Enrollment

Most people are eligible for Medicare Part A automatically when they turn 65. In fact, if you’re already getting benefits from Social Security or the Railroad Retirement Board (RRB), enrollment in Part A is automatic. If you’re not already receiving Social Security, you can sign up at your local Social Security office. People under 65 who have certain disabilities, and people of all ages who have permanent kidney failure are also eligible for Medicare Part A.

If you and/or your spouse have worked for at least 10 years and have paid Social Security and Medicare payroll contributions during that time, Part A is available to you at no cost. Even if you haven’t made payroll contributions, you can still enroll in Part A – but you’ll have to pay a premium. If you’re eligible for Medicare, you cannot be refused or delayed Part A coverage because of medical history or pre-existing illnesses.

Coverage & Costs

Medicare Part A allows you to go to any hospital or skilled nursing facility in the United States that accepts Medicare insurance. While Part A pays for many health care services and supplies, it doesn’t pay all of your health care costs. You’ll have to pay an annual deductible, as well as coinsurance and copayments. There are also some coverage limits with Part A. For example, if you’re hospitalized for more than 90 days in a row, you may have to pay part of the additional cost. These expenses are called “gaps” in Original Medicare coverage. That’s why private insurance companies offer Medicare Supplement Plans to “fill in the gaps” for costs that Original Medicare doesn’t cover.

Medicare Part B is the medical insurance component of “Original Medicare”. Part B helps to pay for services and supplies that are considered medically necessary to treat a disease or condition. These can include doctor visits, outpatient hospital care, lab tests, and some preventative care services, like diagnostic screening and flu vaccines. Medical equipment, such as wheel chairs and walkers, may also be covered.

Eligibility & Enrollment

If you qualify for Medicare, then you’re eligible for Part B. Enrolling in Part B is your choice – you may choose to delay enrolling if you are still working and are covered by employer’s health care insurance. In general, it’s a good idea to enroll when you initially become eligible to avoid higher costs down the road, and to keep your options open for supplemental plans.

There are three times when you can enroll in Medicare Part B

1. Initial Enrollment Period – Begins three months before the month of your 65th birthday and ends three months after the month of your 65th birthday (7 months total).
   
2. If you didn’t sign up for Part A and/or Part B when you were first eligible, you can sign up during the General Enrollment Period between January 1 – March 31 each year. Your coverage will start July 1. You may have to pay a higher premium for late enrollment.
   
3. If you’re covered under a group health plan based on current employment, you have a Special Enrollment Period to sign up for Part A and/or Part B any time as long as you or your spouse (or family member if you’re disabled) is working, and you’re covered by a group health plan through the employer or union based on that work. You also have an 8-month Special Enrollment Period to sign up for Part A and/or Part B that starts the month after the employment ends or the group health plan insurance based on current employment ends, whichever happens first.

If you don’t sign up for Part B when you’re first eligible or if you drop Part B and then get it later, you may have to pay a late enrollment penalty for as long as you have Medicare.

Coverage & Costs

Medicare Part B allows you to go to any provider within the U.S. who accepts Medicare insurance. Part B pays for many services and supplies that aren’t covered during inpatient treatment, including ambulance, doctors’ services, outpatient hospital care, physical therapy, wheel chairs and oxygen equipment. Preventative and diagnostic services such as vaccines, x-rays, MRIs, lab tests and recommended screenings are also covered. There is a premium for Medicare Part B that will be automatically deducted from your Social Security check. In 2013, for people making less than $85,000, the standard monthly premium is $104.90. You’ll also need to pay an annual deductible, coinsurance and copayments. While Part B pays for many health care services, it’s important to remember it doesn’t pay all of your health care costs.

Medicare Part D is prescription drug coverage provided by private insurance companies. If you take prescription drugs, it could be very important to investigate whether your medications are covered by the plan you choose. You may get prescription drug coverage with a Medicare Advantage plan, or you can sign up for a stand-alone plan if you have Original Medicare Parts A and B. Be sure to check the plan’s coverage list or formulary.

Eligibility & Enrollment

To enroll in a Medicare prescription drug plan, you must be entitled to Medicare Part A, or be enrolled in Medicare Part B, and live within the plan’s service area. For most people, the election time for Medicare Part D is during Medicare’s Annual Enrollment Period (also known as “open enrollment”).

Coverage & Costs

You will pay a monthly premium, which varies by plan, and you may pay a yearly deductible. While all drug plans must provide at least a standard level of coverage, Part D plans can vary widely by types of drugs covered, cost sharing (how much you have to pay), and the pharmacies you can use. So it’s important for you to look beyond plan premiums and compare plan features carefully. Most plans have a gap in coverage, called the “donut hole”. This is the point at which a member reaches the plan maximum and before catastrophic coverage kicks in – creating a period where a member must pay 79% coinsurance on generic and 47.5% coinsurance on brand of their prescribed drug costs.

Medicare Advantage plans are offered by private insurance companies and approved by Medicare as an alternative to Original Medicare. Medicare Advantage plans combine the benefits of Parts A and B along with extra benefits in a single, easy-to-manage plan that often includes Part D, as well. If you choose to enroll in a Medicare Advantage plan, you can’t be refused coverage regardless of your health history – except for some special rules that apply only to people with end-stage renal disease.

Eligibility & Enrollment

To join a Medicare Advantage plan, you must already be enrolled in both Medicare Part A and Part B, and live in the plan’s service area. You’ll continue to pay your monthly Part B premium to Medicare and may have to pay an additional monthly premium to your Medicare Advantage Plan. For most people, the election time for Medicare Advantage is during Medicare’s Annual Enrollment Period (also known as “open enrollment”). However, you should be aware of several time periods for joining and managing your enrollment in a Medicare Advantage plan:

1. Initial Enrollment Period – Begins three months before the month of your 65th birthday and ends three months after the month of your 65th birthday (7 months total).
   
2. Annual Enrollment Period – this period runs from October 15 through December 7 of each year. Any changes you made to plan type or coverage will start on January 1.
   
3. Annual Disenrollment Period – this period runs from January 1 through February 14 of each year. If you’re in a Medicare Advantage Plan, you can leave your plan and switch to Original Medicare. If you switch to Original Medicare during this period, you will have until February 14 to add a Medicare Prescription Drug Plan to your coverage. Your coverage will begin the first day of the month after the plan gets your enrollment form.
   
4. Special Enrollment Period (SEP) – A time when you may enroll, if you meet certain conditions (for example, your group health plan coverage ends or you move into or out of a coverage area).
   

Coverage & Costs

Medicare Advantage (MA) Plans generally give you more health care coverage and benefits than Original Medicare and a Medicare Supplement plan combined. They cover a full range of medical and preventive care. Most plans cover Part D prescription drugs. However, you cannot join a Medicare Part D plan once enrolled in Medicare Advantage, so if you need drug coverage, be sure it’s included in the plan you select.

The two most common types of Medicare Advantage plans are:

• Health Maintenance Organizations (HMO) – generally cost less than other MA plan types and limit how much members must pay out-of-pocket annually. However, you may only be able to see certain doctors or go to certain hospitals to get covered services (except emergency care). Most HMO plans cover prescription drugs.
  
• Preferred Provider Organizations (PPO) – give you flexibility to go to any doctor, specialist, or hospital, but it will usually cost you more than providers that belong to the plan’s network. They generally have fewer restrictions than HMOs on referrals, second opinions and choice of primary care providers but you may pay for this flexibility with higher premiums. In most cases, prescription drugs are covered by PPO plans.