Medicare is a simple concept with a complicated reality. Woe be to those seniors and their agents who don’t understand at least the Medicare basics. Which are …
Medicare is a heavily subsidized health insurance plan that is available to qualified Americans. It is not free: beneficiaries pay for premiums, deductibles and copayments. These can be very costly.
There are four parts to Medicare: A, B, C and D.
Part A covers inpatient hospital services, post-hospital extended-care services, home health care services, hospice services and skilled nursing facility services.
Part B covers physician services, diagnostic tests, medical equipment, ambulance services, outpatient physical and speech therapy, some prescription drugs and some preventive services. It also covers home care services not covered by Part A.
Part C is just an HMO or PPO alternative to traditional Medicare – these are the “Medicare Advantage” plans. A Medicare Advantage plan must provide at least as much coverage as Part A and Part B. Most Medicare Advantage plans include additional services to lure people into buying them.
Part D covers prescription medications and are purchased via private insurance plans. The insurance companies are subsidized by the government.
The last piece of the puzzle is the Medicare Supplemental Plan, sometimes called Medigap. These are purchased via private insurance plans to cover copayments and deductibles for those people who do not purchase a Medicare Advantage plan. There are 10 standard forms of the policy, labeled forms A through N. Each type of form must provide the same coverage, regardless of which company sells it, so it is easy to compare prices.
Pulling it all together, if you want to be fully covered then you need to choose one of the following:
• A Medicare Advantage plan plus Part D (if drug coverage is not already included in the Medicare Advantage program), or
• Parts A, B, D and a Medigap Plan.
Most Americans and qualified resident aliens become eligible for Medicare at age 65. However, they must be enrolled in the program to receive benefits.
Enrollment in Medicare Parts A and B is automatic for people who have reached 65 and are currently receiving Social Security or Railroad Retirement benefits. Everyone else must file an application. The easiest way to do that is online at www.ssa.gov/benefits/medicare.
The initial enrollment period for Parts A and B begins at the start of the third month before the month of your 65th birthday and ends seven months later. If you miss enrolling for Part B when you are first eligible, then there is a penalty when you do enroll. There are a few exceptions to the penalty, the most popular one being if you or your spouse were covered by an employer’s group health plan.
At the time of your enrollment in Parts A and B, you should also, preferably, sign up for either Part C (and Part D if not already included) or for Part D and a Medicare Supplemental Plan.
For pros and cons of going the Medicare Advantage Plan route, look at the websites for the Texas Department of Insurance and Medicare. The Center for Medicare Advocacy also has excellent information on its website.
Most attorneys who deal with this issue recommend choosing Medigap so that you aren’t limited to a particular provider network or restricted services.
Feeling overwhelmed? Consider hiring a Medicare insurance broker who is an independent agent representing multiple carriers. Just keep in mind your enrollment period – that is one deadline you do not want to miss.
Virginia Hammerle is president of Hammerle Finley Law Firm and board-certified by the Texas Board of Legal Specialization. Visit hammerle.com. This column does not constitute legal advice.
