Consumer Guide to Medicare

What is Medicare?

Please call our office for a full Medicare review to learn what plan is right for you.

Medicare is a Health Insurance Program Sponsored by the federal government for:

• People age 65 or older
• People under 65 with certain disabilities
• People of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant)

Medicare has Four Parts: A, B, C, D:

• Medicare Part A (Hospital Insurance)
  Helps pay for inpatient care in a hospital or skilled nursing facility (following a hospital stays), some home health care and hospice care. Most people don't have to pay for Part A.
• Medicare Part B (Medical Insurance)
  Helps pay for doctors' services and many other medical services plus supplies that are not covered by hospital insurance. Most people pay monthly for Part B (usually around $96.40 per month. Some pay more based on income).?(Part A and Part B are often referred to as "Original Medicare".)
• Medicare Part C (Medicare Advantage)
  Provided by private insurance companies as a replacement of Part A and Part B. People with Medicare Parts A and B can choose to receive all of their health care services through one of these provider organizations instead of through Medicare. Part C plans are available in many but not all areas. All people pay monthly for Part C. This payment is in addition to the monthly premium paid for Part B.
• Medicare Part D (Prescription Drug Coverage)
  Provided by private companies to help pay for prescriptions, which are not covered by Original Medicare. Part D is available to everyone with Medicare. All people pay monthly for Part D. This payment is in addition to the monthly premium paid for Part B.
• Medigaps or Supplemental Policies
  As a supplement to Medicare, many choose to buy a “medigap” policy  - also known as “medicare supplemental” policies. These are offered by private insurance companies. Please call our office for a full review to see which plan is right for you.

BACKGROUND ON ORIGINAL MEDICARE (Medicare Part A and B)

Part A and Part B are often referred to as "Original Medicare". Original Medicare is managed by the Federal government and lets people with Medicare go to any doctor, hospital, or other health care provider who accepts Medicare. It is a fee-for-service plan, meaning that the person with Medicare usually pays a fee for each service. Medicare pays its share of an approved amount up to certain limits, and the person with Medicare pays the rest.

The Centers for Medicare & Medicaid Services (CMS) is the Federal agency that runs Medicare. CMS is part of the U.S. Department of Health and Human Services. Medicare is financed by a portion of the payroll taxes paid by workers and their employers. It also is financed in part by monthly premiums deducted from Social Security checks.

What is Not Covered by Original Medicare?

Original Medicare doesn't cover everything. For example, it doesn't cover cosmetic surgery, health care you get while traveling outside of the United States (except in limited cases), hearing aids, most hearing exams, long-term care (like care in a nursing home), most eyeglasses, most dental care and dentures, and more. Generally, Original Medicare does not cover prescription drugs, although it does cover some drugs in limited cases such as immunosuppressive drugs (for transplant patients) and oral anti-cancer drugs. Some of these services not covered by Original Medicare may be covered by a Medicare Advantage Plan (like an HMO or PPO).

How Much Does Original Medicare Cost?

People usually don't pay a monthly premium for Part A coverage if they or their spouse paid Medicare taxes while working. For Part B, most people pay a standard monthly premium ($96.40 in 2009; $110.50 in 2010*). Some people may pay a higher Part B premium based on their income.

MEDICARE PART B (Medical Insurance)

Medicare Part B helps cover medically-necessary services like doctors' services, outpatient care, and other medical services. Part B also covers some preventive services. These include a one-time "Welcome to Medicare" physical exam, bone mass measurements, flu and pneumococcal shots, cardiovascular screenings, cancer screenings, diabetes screenings, and more.

MEDICARE PART C (Medicare Advantage)

Medicare Advantage is a type of Medicare Plan offered by a private company that provides a person with all Medicare Part A and Part B benefits, and often additional benefits as well. Also called Part C, Medicare Advantage Plans can be:

• HMOs (health maintenance organizations)
• PPOs (preferred provider organizations)
• Private Fee-for-Service Plans
• Medical Savings Account Plans (MSAs)
• Medicare Special Needs Plans

If a person is enrolled in a Medicare Advantage Plan, all Original Medicare services are covered through the plan and aren't paid for under Original Medicare. Most Medicare Advantage Plans also offer prescription drug coverage that must follow the same rules as Medicare Prescription Drug Plans (Part D).

Medicare Advantage Plans may also offer more benefits than Original Medicare, such as vision, hearing, dental, and/or health and wellness programs. These plans also may have lower out-of-pocket costs than Original Medicare. In some plans, like HMOs, you may only be able to see certain doctors or go to certain hospitals to get covered services. Medicare Advantage plans are available in many areas of the country.?All people pay a monthly premium for their Medicare Advantage Plan. This payment is in addition to the monthly premium paid for Part B?.

Who Can Enroll in a Medicare Advantage Plan?

You can generally join a Medicare Advantage Plan if you meet these conditions:

• You have Part A and Part B.
• You live in the service area of the plan. Contact the plans you're interested in to find out about the service area.
• You don't have End-Stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant).

How Much do Medicare Advantage Plans Cost?

The out-of-pocket costs for a Medicare Advantage Plan vary widely, and depend on the following:

• Whether the plan charges a monthly premium in addition to your Part B premium. Medicare Advantage Plans charge one combined premium for Part A and Part B health coverage, Medicare prescription drug coverage (Part D) (if offered), and extra coverage (if offered).
• Whether the plan pays any of the monthly Part B premium.
• Whether the plan has a yearly deductible or any additional deductibles.
• How much you pay for each visit or service (copayments).
• The type of health care services you need and how often you get them.
• Whether you follow the plan's rules, like using network providers.
• Whether you need extra coverage and what the plan charges for it.

A few Medicare Advantage plans may pay all or part of your Part B premium. (You still get all Part A and Part B-covered services). Your Medicare Advantage plan premium may also include all or part of the premium for Medicare prescription drug coverage (Part D).

MEDICARE PART D (Prescription Drug)

Part D is a stand-alone drug plan, offered by insurers and other private companies to people who get benefits through Original Medicare, a Medicare Private Fee-for-Service Plan, a Medicare Cost Plan, or a Medicare Medical Savings Account Plan. Everyone with Medicare, regardless of income, health status, or prescription drugs used, can get prescription drug coverage.

Medicare prescription drug coverage is insurance that covers both brand-name and generic prescription drugs at participating pharmacies in your area. It provides protection for people who have very high drug costs or from unexpected prescription drug bills in the future.

Everyone with Medicare is eligible for this coverage, regardless of income and resources, health status, or current prescription expenses. You may sign up when you first become eligible for Medicare (three months before the month you turn age 65 until three months after you turn age 65). If you get Medicare due to a disability, you can join from three months before to three months after your 25th month of cash disability payments. If you don't sign up when you are first eligible, you may pay a penalty. If you didn't join when you were first eligible, your next opportunity to join will be from November 15 to December 31 of each year.

How Medicare prescription drug coverage works

Your decision about Medicare prescription drug coverage depends on the kind of health care coverage you have now. There are two ways to get Medicare prescription drug coverage. You can join a Medicare prescription drug plan or you can join a Medicare Advantage. Whatever plan you choose, Medicare drug coverage will help you by covering brand-name and generic drugs at pharmacies that are convenient for you.

Who can enroll in a Medicare prescription drug plan

Anyone who has Medicare Part A, Medicare Part B or a Medicare Advantage plan (Part C) is eligible for prescription drug coverage (Part D). Joining a Medicare prescription drug plan is voluntary, and you pay an additional monthly premium for the coverage. You can wait to enroll in a Medicare Part D plan if you have other prescription drug coverage but, if you don't have prescription coverage that is, on average, at least as good as Medicare prescription drug coverage, you will pay a penalty if you wait to join later. You will have to pay this penalty for as long as you have Medicare prescription drug coverage.

The cost of Medicare prescription drug coverage

Like other insurance, if you join a Medicare prescription drug plan, generally you will pay a monthly premium, which varies by plan, and a yearly deductible. You will also pay a part of the cost of your prescriptions, including a copayment or coinsurance. Costs will vary depending on which drug plan you choose. Some plans may offer more coverage and additional drugs for a higher monthly premium. If you have limited income and resources, and you qualify for extra help, you may not have to pay a premium or deductible. You can apply or get more information about the extra help by calling Social Security at 1-800-772-1213.

How to Enroll in a Medicare prescription drug plan

Once you choose a Medicare drug plan, you may be able to join by completing a paper application, calling the plan, or enrolling online. Medicare drug plans aren't allowed to call you to enroll you in a plan.

Contact the plan to find out how you can join. When you join a Medicare drug plan, you will have to provide your Medicare number and the date your Part A or Part B coverage started. This information is on your Medicare card.  Call us to to find Part D plans in your area.

The Medicare prescription drug coverage gap (the "Doughnut Hole")

Most Medicare drug plans have a coverage gap, sometimes called the "Doughnut Hole". This means that after the person and the person's drug plan have spent a certain amount of money for covered drugs, the person then has to pay all costs out-of-pocket for the drugs, up to a limit. The yearly deductible, co-insurance or co-payments, and what the person pays while in the coverage gap all count toward this out-of-pocket limit. The limit doesn't include the drug plan's premium.