Welcome to Medicare: Coverage 101

Health insurance options broaden for a person when they become 65 years old. American’s that are at least 65 years old are eligible for the benefits from an insurance program for persons in that demographic, Medicare. It is important to be aware of the available Medicare options as one approaches 65. The available Medicare plans and Medicare secondary insurance options are highlighted in this piece.

The major eligibility criteria for Medicare is age or 24 months of disability. As soon as a person turns 65, they can access healthcare services through Medicare plans. The registration for Medicare is typically automatic and effected as soon as a person turns 65. It is important to mention that Medicare is a federal program that is restricted to persons who are legal residents of the US. Persons that can access Medicare must have also spent a minimum of five years in the US.

Although Medicare is generally restricted to persons that are at least 65 years old, the age criteria is waived for persons that have certain chronic illnesses or physical disabilities. These chronic conditions include permanent kidney failure. The Social security administration typically registers persons that receive disability benefits for Medicare after they have received the benefits for 24 months.

Types of Medicare Plans

Generally, Medicare is accessible as either the original Medicare plan, Advantage plans or Medicare gap plans. These plans are related to parts of Medicare. Medicare has four parts: part A, part B, part C and part D. part A of Medicare is known as the hospital insurance part. Part B of Medicare is known as medical insurance part. Part C of Medicare is known as the Medicare advantage part, while part D is known as the drug prescription coverage part. As it is likened to traditional forms of health insurance, deductibles and copay’s also apply to the original Medicare plan.

As stated before, Medicare plans include Medicare parts. The original Medicare plan which is similar to traditional forms of Medicare includes parts A and B. The Medicare Advantage Plan is the part C of Medicare. Let’s break these parts down in a little more detail.

Part A of Medicare

This hospital insurance covers the basic cost of medical services. Part A of Medicare premiums usually come at no cost for a lot of persons as payments for the service are usually made in the form of Medicare taxes paid for the beneficiary or the spouse of the beneficiary. Medicare taxes are paid through Medicare-covered employment. Thus, persons holding at least 40 quarters of such employment may get part A Medicare at no premium. People that did not hold such employment in the US however, have to pay a premium for the part A of Medicare. Part A has a deductible that must be met every year before the benefits kick in.

Part B of Medicare

This part of Medicare covers other costs accrued in getting medical services. Enrollees pay for the services and supplies that are applied in managing conditions, as well as preventing other healthcare conditions as premiums of Part B Medicare. Part B has a monthly premium that is paid depending on your families adjusted gross income. For 2019 most individuals will pay 135.50 a month for part B coverage. Part B also has a deductible (currently under $200 a year) and then co-insurance of 20%.

The original Medicare plan that includes parts A and B is often not sufficient to meet one’s healthcare needs without paying a lot of money out of pocket in the form of deductibles and co-insurance. Thus, along with the original Medicare plan, it is important to register for other insurance plans to cover areas left out of the original Medicare plan. Research has established that the original Medicare plan covers on average just about 50% of the healthcare expenses policyholders incur overall. Although the original Medicare is tenable at any healthcare organization that accepts Medicare nationwide, its coverage is quite limited until annual deductibles are met and is best supplemented with other plans.

Part C of Medicare

Medicare part C which is also known as Medicare advantage plan is the part of Medicare that is run by private organizations. One can access Medicare either through these plans or as the original Medicare plan. Although the Medicare advantage plan is a part of Medicare, it is offered by a variety of private organizations attracting different premiums and providing different levels of coverage. You may hear friends and family say they have a United Medicare plan, Aetna Advantage plan or Anthem Part C, these are all just different insurance companies in house Medicare benefit plans. The coverage provided by Medicare Advantage Plan generally include parts A, B and many times part D, as well as other features decided by the organization providing the offer. Advantage plans will differ based on the county you live in and other factors such as health and whether you are receiving state Medicaid assistance or not.

The distinguishing features of Medicare advantage plans and the original Medicare plan is determined by the type of the Medicare advantage plan. Medicare advantage plans could be offered as health management organizations and private provider organizations, among other types of insurance coverage. The type of Medicare advantage plan offered by an organization would determine if policyholders will be able to receive healthcare services from only an established network of healthcare service providers and if they need a referral to see a specialist or not.

It is noteworthy that the part C of Medicare may include part D. While a person would be automatically signed up for the original Medicare plan as soon as they become 65 years old (if they don’t decline part B), Medicare advantage plan registration is not automatic.

The process of registering for Medicare advantage plans begins with searching for the available options in one’s area. It is important to seek options that are available in one’s area as access to service providers may be restricted to the area where the plan is domiciled. If you’re looking for Medicare advantage plans in Indiana, for example, your focus should be restricted to plans that are available in your county in Indiana.

Since the registration for the original Medicare plan is automatic, when one finds a Medicare advantage plan and registers for it, it could be regarded as switching from the original Medicare plan to the chosen Medicare Advantage Plan.

Beneficiaries of Medicare advantage are allowed to change their plans when they are no longer available, when they have certain life changing events, as well as during the annual open enrollment period. This period runs from October 15th to December 7th every year.

Part D of Medicare

This part of Medicare is known as the prescription drug coverage plan. Medicare part D is not automatically included in the original Medicare plan, although it should be purchased when enrolled in Medicare. Medicare part D could be included in Medicare advantage plans as well, at no extra cost.

Medicare part D covers only prescription drugs and its availability is always offered by private organizations, based on your county of residence. Private organizations offer different part D Medicare coverage that attract varying premiums with different coverage.

Part D Medicare is designed to offer drugs at varying costs. The costs of prescription drugs typically differ across the phases of the plan. The doughnut phase of part D Medicare, for example have different costs for your prescription drugs than the initial phase of the pan.

Medicare supplement plans

As mentioned earlier, Medicare plans, especially the original Medicare plan does not cover all of one’s healthcare expense. Medical supplement plans are tailored to make up for the areas that are not covered by the Medicare plans. Medicare supplement plans are also called Medigap plans, as they fill gaps that have been left by the two part A & B Medicare plans.

Medigap plans are offered by private organizations with coverage of areas that could be a major source of financial burden to beneficiaries of Medicare plans. Several private organizations offer Medigap coverage. However, you can be a beneficiary of just one Medigap plan at a time and you can’t have a Medicare Advantage plan and a Medigap plan, one or the other.

Medigap plans are available in categories that have been determined by the law and the Center for Medicare Services (CMS). There are 10 of these categories which range from category A to category M. Because Medigap plans are offered by private organizations, premiums and coverage typically vary according to the organization and the type of coverage category chosen.

As a supplement to original Medicare plans, Medicare supplement plans are available to persons that are beneficiaries of at least parts A and B of Medicare. Peculiarities of Medicare, however, include the time-frame when registration can be made.

You can apply for available Medicare supplements when you are registered for the original Medicare plan or up to 6 months in advance. Every person that turns 65 and is eligible for Medicare gets a six-month period to register for Medicare supplement plans without underwriting. This means the plan cannot deny your application during this period, regardless of current health. The six-month registration period for Medicare supplements begins from the month that the beneficiary of any of the Medicare plans turned 65 and was registered for any of the Medicare plans. It is also a one-time period.

As Medicare supplement plans are provided by private organizations and base premiums off of your county of residence. It is important to choose Medicare supplement plans available in your area. However, once enrolled you can use your coverage at any provider that takes original Medicare. Medicare supplement plans purchased in Indiana, for example do not specify access to only healthcare professionals within the Indiana area.

Choosing a Medicare plan

Before a person turns 65, it is important to properly consider health insurance options, from Medicare Advantage plans to the Medicare supplements. As highlighted extensively, original Medicare would not cover all of a person’s medical expenses. One is thus best prepared for the medical expenses they would incur as they turn 65 when they are beneficiaries of a Medicare advantage plan or Medicare supplements.

The process of finding and choosing the right insurance option as you turn 65 could be especially frustrating without the help of an expert health insurance agent. An expert that is versed in Medicare plans can help you find plans that are most suiting to your needs. The importance of understanding the terms and conditions that apply to every insurance policy cannot be overemphasized. A good health insurance professional will provide you with healthcare options that are most suitable for your needs providing guidance based on expert knowledge of the industry. Making the most of health insurance options available as one turns 65 should be based on a proper understanding of the available options. Insurance professionals enable beneficiaries to make informed decisions about their health. The good news is that this resource doesn’t have to cost you anything. All plans have a commission that is paid to the agent assisting the beneficiary. Most of these commissions are the same amount which decreases the chance of any bias on the agent or brokers part. If you would like free guidance in finding the right Medicare coverage for your needs, you can set an appointment with a local health insurance adviser like Larry Medcalf or go to indyhealthagent.com to contact us with any questions.