Working in financial services, specifically in the senior markets, you are bound to get the question about Medicare. Can they make the system any more confusing? Medicare, not Medicaid, is a healthcare program for people 65 and over, those who are under 65 with certain disabilities and anyone with the end-stage renal disease. I will focus mostly on the 65 and over markets in this article although much will relate to the other two groups. Additionally, any special circumstances that don’t relate to the norm, please only use this as a guide. Best to seek the advice of a Medicare consultant for your specifics.
The alphabet soup they give you to decipher and the mountains of mail, books, and calls one gets when they are about to turn 65 can be quite overwhelming. I would not want to be part of the milestone, but it leaves us little option. At age 65, part A is granted to you. If you have worked 40 quarters or 10 years anytime in your life, part A is free for most. Part ‘A’ is what covers the hospitals. If you haven’t reached the 40 quarters, you haven’t paid enough in Medicare tax and will owe. Turning 65 also entitles you to part B. Part ‘B’ is not free but it covers the doctors’ part of the plan. Usually, each of us turning 65 will pay about $121.80 (for 2016 or higher depending on your income) per month that will come out of your Social Security Income, or you can choose to pay it via check if you aren’t taking social security. If you are working and will continue to receive coverage from your employer, then do not participate in part B. Some people don’t realize they can delay this until they leave their employer’s coverage. These two parts are just original Medicare. It covers the hospitals (part A) and the doctors (part B) at about 80% coverage leaving you with about 20% to pay out of pocket with no caps. Additionally, each has their deductibles and co-insurance that are due when using the plan unless you add more coverage.
More coverage. That’s where things really start to get confusing. There are basically two routes you can choose. One is adding a supplement or Medigap policy to your original Medicare. These have offerings of letters A-N. Each has different coverage options that help ‘supplement’ and pay for the deductibles of Parts A&B. A drug plan sometimes referred to as Part D, also needs to be added to this option. It is Very important to have a drug plan even if you don’t take any medications currently. A separate plan or one included in the plan should be added to any of these choices. If you don’t and try to get one later, Medicare will impose a penalty per month for life being that you did not comply with credible drug coverage.
Another added coverage option to original Medicare is an Advantage plan. This is sometimes referred to as Part C. There are multiple options and carriers that offer these programs. They are county based so depending where you live depends on what is available to you. These plans have in and out of network options so best to be sure your doctor accepts the plan. Unlike the Supplement/Medigap plans, doctors, and hospitals that take Medicare will take the plan. The advantage plans also tend to have additional benefits like a drug plan that may be already included. Some may even have vision or dental benefits.
Which plan is best? Well, each person’s situation is different. When I meet with individuals we are reviewing their current coverage, health, how many times they go to the doctors per year, prescriptions, what is affordable from a budget standpoint, who accepts what coverage, do they travel, and other factors. A list of pros and cons for each plan option is used to determine the best choice. It’s definitely not a one size fits all option. Even spouses can choose differently and don’t need to be on the same plan. Although sometimes discounts are offered for couples if they select the same plan, it isn’t always in their best interest.
Open enrollment for Medicare starts October 15th thru December 7th every year. Consider reviewing your options annually with your agent especially if you are on a stand-alone drug plan or an advantage plan. Things change every year or sometimes more often within the plan as well as your health. It’s good to stay on top of the best options for your health care coverage needs.
For more information or to book a meeting to discuss your situation please contact Miriam at 484-523-0573 or email at allianceplanning123@gmail.com
