Health care insurance. We need it, and we need it even more as we get older. As we and our loved ones head toward retirement we want to make choices that won’t bankrupt the family and will give us the care we need.
Unfortunately, when it comes to Medicare, those choices are enough to make your head spin. Part A. Part B. Part D, for drugs. And then there are Part C plans, which include parts A, B, and D. Initial enrollment windows, open enrollment, special enrollment. Terms like Medigap and donut holes.
Fortunately, there are people who can help us make sense of it all. If you’re approaching 65, or if you care about someone who is – a parent, a grandparent, a friend – it’s worth reading further. It’s also a good idea even if you’re already on Medicare. Right now is one of the windows in which you can make changes to your plan.
At Eastside Neighborhood Services on October 8, Joanne Keyes, a state-certified volunteer health insurance counselor, gave a thorough overview of Medicare in a presentation offered by the Metropolitan Area Agency on Aging.
She described the basics, gave good advice for anyone on Medicare, and shared a few key— and free—resources that should be in every senior’s and caregiver’s files.
The basics
Medicare is a federal health insurance plan for anyone age 65 or older. It’s not the same as Medicaid, which is a health coverage assistance program for low-income people of all ages. Both Medicare and Medicaid have been around for 50 years, signed into law by President Johnson as amendments to the Social Security Act of 1935.
Keyes explained that you enroll for Medicare through the Social Security Administration, the agency that determines if you’re eligible. To avoid penalty you need to apply in a 7-month initial enrollment window: either during the month of your 65th birthday, or the 3 months preceding it or following it. Other wise, your penalty can increase your premium as much as 10 percent for each full year that you didn’t sign up. You also will be limited in when during the year you can apply and when your coverage will start.
But there are common exceptions to that, Keyes said. If you’re working and have health insurance or are covered by a spouse’s health insurance then you are not required to apply until you or your spouse retires, or until that insurance is discontinued, provided that insurance meets certain requirements (is “creditable” ). Then you have an 8-month window following retirement or the end of your group policy to enroll without penalty. (To find out if your plan is creditable, check with your HR department; if your plan is not creditable, your employer is required to let Medicare-eligible employees know.)
It’s not only age that qualifies you for benefits. You must have worked at least 40 quarter years, or have a spouse who has worked more than 40 quarters. If you’re under 65 and have received Social Security Disability benefits for 24 months, you’re automatically eligible for Medicare. If you choose not to take those benefits at that time, when you turn 65 you can enroll without penalty.
Choosing a plan
Keyes explained the A, B, Cs, and Ds of Medicare coverage. Part A covers hospital and related service, such as some home health services and hospice care, as well as skilled nursing facility stays – but only rehab-type situations in which the person steadily improves, not long-term nursing home care. Part B covers many outpatient physician services, lab tests, ambulance and durable medical equipment costs.
When you sign up for Medicare, your first decision is whether to go with the Original Medicare Parts A and B or choose a private insurance-company administered program. In either case, you still need to enroll in Parts A and B through the Social Security Administration.
If you choose the Original Medicare parts A and B, then you likely will want Medicare supplemental insurance, sometimes called Medigap plans, which cover some of the hospital and outpatient expenses not paid for by Parts A and B benefits. You also will need a stand-alone plan for prescription drugs –that’s what’s meant by Part D coverage (easy to remember – D for drugs).
The second option is to go with a Medicare Health Plan – sometimes called Medicare Part C. Such plans are administered by private companies approved by Medicare.There are two types. One is the Medicare Advantage Plan, in which the insurance company contracts with Medicare to provide your Part A and Part B benefits, and in most cases, provides Part D coverage.
With the other type, the Medicare Cost Plan, you keep your Original Medicare parts A and B coverage, but when using providers in the plan’s network, parts A and B benefits are covered by the plan. When services are used outside the plan’s network, the Original Medicare is the biller and payor. Medicare Part D prescription drug coverage can be either through the plan or through a stand-alone plan.
One thing to note: Although Medicare Part D is a voluntary program, if you don’t enroll when you are first eligible for Part A and Part B, and do not have “creditable” coverage through a group policy, you may have to pay a Medicare Part D late enrollment penalty, based on the months that you were not covered.
Costs
Premium costs and benefits will vary depending on your choice of plans, but here are this year’s figures for basic Part A and Part B: Part A is premium free, if you have enough work credits, and covers hospitalization costs for up to 60 days with a $1,288 deductible, with significantly less coverage for days past that; it also completely covers up to 20 days of skilled nursing facility care and Medicare approved home health care services. Part B has a monthly premium, a deductible of $166, and a 20% coinsurance for most services. This year the income-dependent premium is $121.80 for anyone with a yearly income less than $85,000.
Tips for some and all
Keyes gave an important advice for anyone with Medicare: Review your plan every year to make sure what you’ve chosen remains right for you. The open enrollment period for making just about any change to your plan is October 15 through December 7; if you’re on a Medicare Advantage Plan and want to switch to Original Medicare, January 1 – February 14 is your window to do so and to pick up Part D prescription drug coverage.
She also advised that you do NOT carry your Medicare Card, in spite of the fact it says you should on the card. Take it your doctor the first time, then leave it at home, because your social security number is on it, and a stolen social security number can lead to identity theft. A law passed in 2015 will replace the social security numbers on cards – but it will take several years for it to be implemented, both for newly enrolled beneficiaries and for replacing cards of those already enrolled.
The questions Keyes fielded uncovered many nuances and variables. One woman is a veteran; Keyes said she will likely keep drug coverage through the V.A., and should talk with someone more familiar with veterans’ benefits. Another woman, approaching 65, is receiving Social Security – she was surprised to learn that she will be automatically enrolled in Medicare Part B. Another is still working, covered under a group policy through her employer – it’s not until she retires, or that policy is discontinued that she will have to apply, Keyes confirmed.
Resources
Keyes peppered her talk with the many resources out there to help seniors understand the choices.
Medicare.gov includes all the basics and comparison shopping web site, tailored to location. The Minnesota Board on Aging publishes annually, “Health Care Choices for Minnesotans on Medicare,” a comprehensive compilation of information and available choices. Call the Senior LinkAge Line, 1-800-333-2433, option 2, to request a copy.
Hour-long, in-person health insurance counseling sessions are available in Northeast year-round, with more during this open enrollment season. To schedule one, call Northeast Senior Services, 612-781-5096. See page 14 for more on sites and dates.
Health care insurance counselors like Keyes are also available through Senior LinkAge Line, (1-800-333-2433), which, along with its associated web site, MinnesotaHelp.info, is advertised as a “One Stop Shop” for Minnesota seniors. The hotline and site also provide information about arranging services for aging parents, planning for long term care, resources for fighting fraud and info about services that allow people to remain independent in their community.
For those who aren’t internet connected, Keyes said the Senior LinkAge Line would be a good way to go, or the in-person counseling sessions. There are also library computers, and for those who aren’t comfortable surfing the internet, the Metropolitan Area Agency on Aging offers Senior Surf Days. Call the Senior LinkAge Line to find an upcoming class near you.