What is Medicare?

Medicare is the federal health insurance program for everyone who is 65 or older or those under 65 with certain disabilities.

With Original Medicare, there are two Parts that provide different coverage — Medicare Part A and Part B.

Medicare has two parts — Part A and B.

Part A covers:

  • Inpatient care in a hospital — When you’re admitted to the hospital as an inpatient after an official doctor’s order, which says you need inpatient hospital care to treat your illness or injury.
  • Skilled nursing facility care
  • Hospice care
  • Home health care

Part B covers:

  • Medically necessary services: Services or supplies that are needed to diagnose or treat your medical condition and that meet accepted standards of medical practice.
  • Preventive services: Health care to prevent illness (like the flu) or detect it at an early stage, when treatment is most likely to work best.

However, it only covers 80% of these services. Without a Medicare insurance plan, you are on the hook for 20% coinsurance/copayment plans.

Does Medicare have a deductible?

Yes. Both parts have deductibles. Part A’s deductible, the inpatient hospital deductible that beneficiaries will pay when admitted to the hospital, will be $1,408 in 2020. Part B’s deductible, the one you pay for medically necessary services or supplies, is $198 in 2020. There are insurance plans, called Medicare Supplements that can cover some or all of your deductibles depending on your eligibility.

Medicare does not cover prescription drugs

If you stick with Part A and B, you will have to pay out-of-pocket for your prescription medicine.

To get coverage, you will either have to purchase a standalone Part D plan or a Medicare Advantage plan that incorporates a Part D plan in it from a Medicare insurance company.

Medicare Enrollment Periods

Whether you’re approaching your 65th birthday, looking for the annual election period, or otherwise wondering about Medicare enrollment periods, we have nearly all of them listed here.

We’ll detail what you can do during these periods and when they are.

Initial Enrollment Period

The first time you become eligible for Medicare is known as your initial enrollment period.

If you’re becoming eligible due to age, your initial enrollment period begins three months before the month of your 65th birthday and ends three months after your 65th birthday month.

This happens with one exception: if your birthday is on the first of the month. This will cause your enrollment period to begin one month early. For example: if your birthday is November 1, your enrollment period will begin July 1 and your Medicare will begin one month early as well — October 1. During your initial enrollment period, you can enroll in Original Medicare (Part A and B), Medicare Advantage plan, a Medicare Supplement, or Medicare Part D.

In fact, this is the best time to get a supplement or Part D plan. You can get a Medicare Supplement during your initial enrollment period with no health questions asked. Also, signing up for a Part D plan during IEP helps you to avoid any late enrollment penalties.

What is Medicare Advantage?

Medicare Advantage Plans are another way to get your Medicare Part A and Part B coverage. Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by Medicare-approved private companies that must follow rules set by Medicare. Most Medicare Advantage Plans include drug coverage (Part D). In many cases, you’ll need to use health care providers who participate in the plan’s network and service area for the lowest costs. These plans set a limit on what you’ll have to pay out-of-pocket each year for covered services, to help protect you from unexpected costs. Some plans offer out-of-network coverage, but sometimes at a higher cost. Remember, you must use the card from your Medicare Advantage Plan to get your Medicare-covered services. Keep your red, white, and blue Medicare card in a safe place because you’ll need it if you ever switch back to Original Medicare.
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Enrollment periods

Your initial enrollment period is three months before you turn 65 and lasts until three months after. There is also an annual election period and an open enrollment period. Your annual election period, or AEP, begins October 15 and runs through December 7 every year. Coverage will begin January 1 the following year. Medicare Advantage’s open enrollment period is from January 1 through March 31. During this time you can switch to another MA plan or disenroll and go back to Original Medicare. You may also qualify for a special election period. If you have missed your initial enrollment or AEP and are interested in adding an Advantage plan to your health coverage, you can speak to a licensed Medicare agent to see if you qualify for a special election period.

What do Medicare Advantage Plans cover?

MA plans offer the same benefits of Parts A and B along with some additional benefits. Your basic coverage is inpatient hospital care, skilled nursing facility care, hospice, lab tests, surgery, home health care, outpatient care, medical equipment, and some preventative services.

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Additional benefits your plan may include are:

  1. Adult day-care services
  2. Dental
  3. Fitness memberships
  4. Hearing
  5. Nutrition programs
  6. Over-the-counter drugs
  7. Services and supports for those with chronic conditions
  8. Transportation to doctor visits
  9. Vision
  10. Wellness programs

 

If you have a chronic health condition, you may also receive additional benefits specific to your situation. These could include things like meal delivery, home cleaning, education programs for your disease, visits to a nutritionist, or transportation to grocery stores.

What is Part D?

All plans must cover a wide range of prescription drugs that people with Medicare take, including most drugs in certain protected classes,” like drugs to treat cancer or HIV/AIDS.

A plan’s list of covered drugs is called a “formulary,” and each plan has its own formulary. Many plans place drugs into different levels, called “tiers,” on their formularies. Drugs in each tier have a different cost.

For example, a drug in a lower tier will generally cost you less than a drug in a higher tier. Medicare drug coverage helps pay for prescription drugs you need. Even if you don’t take prescription drugs now, you should consider getting Medicare drug coverage.

Medicare drug coverage is optional and is offered to everyone with Medicare. If you decide not to get it when you’re first eligible, and you don’t have other creditable prescription drug coverage (like drug coverage from an employer or union) or get Extra Help, you’ll likely pay a late enrollment penalty if you join a plan later. Generally, you’ll pay this penalty for as long as you have Medicare drug coverage.

To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage. Each plan can vary in cost and specific drugs covered.

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How to use your Part D card

When you have to use your Part D card in person, you’ll need your red, white, and blue Medicare card, your photo ID, and your Part D membership card.

Some people with Medicare get their prescription drugs by using an “automatic refill” service that automatically delivers prescription drugs when you’re about to run out. Now, to avoid waste or unwanted costs, plans have to get your approval to deliver a prescription (new or refill) unless you ask for the refill or request the new prescription. Some plans may ask you for your approval every year so that they can send you all new prescriptions without asking you before each delivery. Other plans may ask you before each delivery.

Network pharmacies

Medicare drug plans have contracts with network pharmacies. These pharmacies have agreed to provide members of Part D plans a discounted price. In some Part D plans, your prescriptions are only covered if you get them filled at network pharmacies.

Along with retail pharmacies, your plan’s network might include preferred pharmacies, a mail-order program, or an option for retail pharmacies to supply a 2- or 3-month supply.

  • Preferred pharmacies: You may save money on your out-of-pocket prescription drug costs at a preferred pharmacy because it has agreed with your plan to charge less.
  • Mail-order programs: Get up to a 3-month supply of your covered prescription drugs sent directly to your home.

What is Medicare Supplement?

Every Medigap policy must follow federal and state laws designed to protect you, and it must be clearly identified as “Medicare Supplement Insurance.” Insurance companies can sell you only a “standardized” policy identified in most states by letters, “Plan F”, “Plan G” to name a few. Medigap is Medicare Supplement Insurance that helps fill “gaps” in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost for covered health care services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, like copayments, coinsurance, deductibles.

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What costs do Medicare Supplements cover?

Each plan covers a different percentage of the following items:

  • Medicare Part A coinsurance or copayment and hospital costs
  • Medicare Part B coinsurance or copayment
  • First three pints of a blood transfusion
  • Part A hospice care coinsurance or copayment
  • Skilled nursing facility coinsurance
  • Medicare Part A deductible
  • Medicare Part B deductible*
  • Medicare Part B excess charges
  • Foreign travel emergency (up to plan limits)

* Those who turn 65 after January 1, 2020 are not eligible for plans that offer this benefit.

Business insurance

What is business insurance?

Medicare Advantage Plans, also known as Medicare Part C, feature coverage similar to Original Medicare but they have additional benefits like dental, vision, hearing, prescription drugs, and more.

Are you just looking for prescription drug coverage? That’s Part D! Each Part D plan has a list of drugs it covers. Medicare requires the plan to offer at least two drugs in each class of medication.

Medicare Supplements, also known as Medigap, are private insurance plans that cover the leftover costs of Original Medicare like coinsurance/copays, deductibles, and more.