Medicare is a Federal health insurance program for seniors (age 65 and up), for under 65 with certain disabilities, and at any age with End-Stage Renal Disease ESRD (permanent kidney failure requiring dialysis or kidney transplant).
Medicare has two parts: Part A (Hospital Benefit) and Part B (Medical Benefit). You will hear about Part C and Part D. These are different areas that you may or may not want and isn't usually appropriate for everyone. We will discuss Part C and Part D further below and why or why not you should sign up.
For each benefit period Medicare pays all covered costs except the Medicare Part A deductible ($1,260) during the first 60 days and coinsurance amounts for hospital stays that last beyond 60 days and no more than 150 days.
For each benefit period* in 2015 you pay:
*A new benefit period begins when you have been out of the hospital for 60 or more consecutive days.
|Medicare Part A Coinsurance hospital costs up to an additional 365 days after Medicare benefits are used up|
|Medicare Part B Coinsurance or Copayment|
|Blood (First 3 Pints)|
|Part A Hospice Care Coinsurance or Copayment|
|Skilled Nursing Facility Care Coinsurance|
|Medicare Part A Deductible|
|Medicare Part B Deductible|
|Medicare Part B Excess Charges|
|Foreign Travel Emergency (Up to Plan Limits)|
|Medicare Preventive Care Part B Coinsurance|
*Plans F also offer a high-deductible plan. This means you must pay for Medicare-covered costs up to the deductible amount $2,180 in 2015 before your policy pays anything.
Plan K has a $4,940 out-of-pocket limit, and Plan L has a $2,470 out-of-pocket limit. Once you meet the annual limit, the plan pays 100% of the Medicare copayments, coinsurance, and deductibles for the rest of the calendar year. These amounts can change each year.
***Plan N pays 100% of the part B coinsurance except up to $20 copayment for office visits and up to $50 for emergency department visits.
You have three options:
The high cost-sharing (deductibles and co-pays) of Medicare makes paying out of pocket an unreasonable option for most people. A Medicare Supplement (or Medicare Supplemental Insurance or Medigap Policy) is an insurance plan sold by a private insurance company to cover the gaps in Medicare.
Medicare Supplements are currently available in several different standardized plans. These plans are labeled A – N and cover different amounts of your cost sharing with Medicare. The premium for your Medicare Supplement will be in addition to the premium for Part B of Medicare.
All Medicare Supplements identified by the same letter have the same coverage regardless of the company you choose. Cost IS the only difference between Medicare Supplement Insurance sold by different companies.
The chart below shows the benefits included in each plan. Every company must sell Plan A, which is the basic plan, or the "core benefit" plan. Remember, the plans are standardized. So, Plan F from one company will be the same as Plan F from another company. Select the supplement policy which fits your needs, and then purchase that plan from an industry leader with the lowest premiums and favorable A.M. Best rating.
How to read the chart:
If a checkmark appears in a column of this chart, the Medigap policy covers 100% of the described benefit. If a column lists a percentage, the policy covers that percentage of the described benefit. If a column is a blank, the policy doesn't cover that benefit.
Note: The Medigap policy covers coinsurance only after you have paid the deductible (unless the Medigap policy also covers the deductible).
Medicare Advantage Plan = Privatized Medicare - this is Part C, it includes Part A and Part B. A private Insurance company takes over your Medicare coverage and is paid to manage it. Medicare Advantage Plans include Medicare Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), Private- Fee-for- Service (PFFS) and Medicare Special Needs plans.
When you sign up with a Medicare Advantage Plan, you use the health insurance card that you get from the plan for your health care. In most of these plans, generally there are extra benefits and lower copayments than in the Original Medicare Plan. However, you typically have to see doctors that belong to the plan or go to certain hospitals to get services. Increasingly, some hospitals are refusing to accept certain providers of these plans.
To join a Medicare Advantage Plan, you must have Medicare Part A and Part B. You will have to pay your monthly Medicare Part B premium to Medicare. In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer. Unlike Medicare Supplements, not all Medicare Advantage Plans work the same way, so find out the rules before you sign up.
If you join a Medicare Advantage Plan, a Medigap policy/Medicare Supplement Insurance won’t work. This means it won’t pay any deductibles, copayments, or other cost-sharing under your Medicare Advantage Plan. Therefore, if you have a Medicare Supplement you may want to drop it if you join a Medicare Advantage Plan. However, you have a legal right to keep the Medicare Supplement Insurance.
In addition it is important to remember a major difference between Medicare Advantage plans and Medicare Supplements: Once you enroll in a Medicare Advantage plan you can only disenroll during certain times of the year. With a Medicare Supplement you are free to enroll or disenroll at any time of the year.
You must choose between a large number of plans and varying drug coverage and cost sharing amounts. Some plans are better than others depending on the prescription drugs that you are taking. You can sign up with a drug plan when you first receive your Medicare Card or during Part D Open Enrollment every year from November 15 – December 31st. It is advisable to compare plans during open enrollment of each year that your prescription needs change. If you would like more information on Prescription Drug coverage, please check the box on the form below.