Medicare Explained

If you are over the age of 64, or if you know someone approaching 65, you are probably considering options for health care coverage and have many questions about Social Security, Medicare, prescriptions and everything else as well as how it all coordinates together.  Click here for other quick tips on picking an individual health insurance plan.

What is medicare, who is eligible, and when are they eligible?

Medicare is health insurance for people age 65 or older, under 65 with certain disabilities or any age with End-Stage Renal Disease (permanent kidney failure).

Is Medicare the same as Social Security?

No, Social Security and Medicare are not one in the same.  Social Security provides monthly income for retired persons, Medicare provides health insurance.  You don’t need to elect your Social Security benefit to be eligible for Medicare, but it is Social Security that funds Medicare.

How do I get started with Medicare?

Medicare sends you a questionnaire about three months before you’re entitled to Medicare coverage. Your answers to these questions, including whether you have group health insurance through an employer or family member, help Medicare set up your file and make sure your claims are paid correctly.

You will receive your Medicare number (called a beneficiary number – usually your social security number followed by the letter A or T). 

What if I am already enrolled in a health insurance plan through work and I am not retiring at 65?

For persons who continue working beyond age 65, there are other important considerations regarding Medicare Insurance Supplemental coverage.  It is important to know that Medicare becomes part of the equation whether you stay on your employer’s plan or not.  You can continue on the group plan if you choose to, although a Medicare insurance supplement plan is likely to be much less expensive.  Another important consideration is whether you have dependents on the group plan.  It might make sense for you to purchase an individual medical insurance plan for your children.  Health insurance for college students or health insurance for children can often be purchased for a savings compared to group insurance plans that you get through work.  Contact a health insurance agent in your area (California) to get medical insurance quotes.  Purchasing supplemental plans and individual health insurance plans for dependents can amount to great cost savings for many families.  

Click here for advise on getting adult children off your health plan.

Click here for 10 questions to answer when shopping for individual medical insurance plans. 

 You can get an individual health insurance quote for children and students here.

In terms of coordination of benefits, if you have Medicare and another type of insurance, the question of who should pay or who should pay first can be tricky. Generally, a group health plan would pay before Medicare, but there are several exceptions.

What are the different parts of medicare, do I sign up for each part separately, and what is the cost to me of each part?

 Medicare is made up of four parts:

Part A: Hospital Coverage       

Part B: Medical           

Part C: HMO (or Medicare Advantage plans)  

Part D: Prescription

Medicare Part A helps cover inpatient care in hospitals, skilled nursing facilities, and hospice and home health care. Generally there is no monthly premium if you qualify and paid Medicare taxes while working.

Medicare Part B helps cover medical services like doctors’ services, outpatient care and other medically necessary services that Part A doesn’t cover. You need to enroll in Medicare Part B and pay a monthly premium determined by your income, along with a deductible.

 

Many people also purchase a supplemental insurance policy, such as a Medigap plan, to handle any Part A and B coverage gaps.

Medicare Part C, also known Medicare Advantage Plans, as are combination plans managed by private insurance companies approved by Medicare. They typically are a combination of Part A, Part B and sometimes Part D coverage, but must cover medically-necessary services. These plans have discretion to assign their own copays, deductibles and coinsurance.

Medicare Part D is prescription drug coverage, and is available to everyone with Medicare. It is a separate plan provided by private Medicare-approved companies, and you must pay a monthly premium.

 You can get an individual health insurance quote for supplemental insurance here.

Which Medicare Parts will I enroll in?

 Many people don’t need Part C (unless you choose an HMO type of plan – more on that later).  When you speak with Social Security you will primarily verify the eligibility date for both parts A (Hospital) and B (Medical).

Once you have established Medicare Part A and B, you have three basic choices.  You can just have your red, white and blue Medicare card, referred to as ‘original Medicare’.  There are people in more rural areas, say you lived in Nebraska, who have Medicare only because the Dr’s and hospitals accept it as full payment.  However, for most people, original Medicare could leave them at risk of sharing 20% of the cost of major medical expenses.  Another choice is to join an HMO (more on that later).  For many people, the best answer is to add a Medicare Insurance Supplement plan (sometimes called a Medigap) to pay the portions that Medicare would have you pay if you only had your original Medicare.  This is often referred to as ‘Primary / Secondary’ where Medicare pays 80% and the Supplement pays 20%, leaving you with little or no share of cost.

 As mentioned above, if you choose a Medicare Insurance Supplement plan, the drug coverage is separate, but there is an easy to use plan finder tool:

 Contact Medicare Rx  (800) 633-4227  www.medicarerx.gov  By providing your home zip code and list of prescriptions, you’ll be directed to the best Rx plan for your needs.  I suggest you go to the website and call simultaneously so a representative can walk you thru.  If you already have your eligibility established (above), then you can enroll in an Rx plan right then over the phone.

 Here’s an overview of some options you may want to consider:

 Medicare Insurance Supplement plans  At age 65 the plan premium runs around $120 per month (more if you are in your 70’s) and allow you to use any dr. or hospital (PPO) that accepts Medicare with $0 copay for most medical care.  You would need to add separate Rx coverage with this type of plan.

High Deductible Medicare Insurance Supplement  Catastrophic version of the above plan in which you use your regular Medicare card (80/20 coverage) until you meet a $2000 annual deductible, then the plan pays 100%.  These plans run around $40 per month and is the only low cost (PPO) option available in this area.

 Medicare Advantage plans  There are 3 good (MA-PD) plans in Santa Clara county that utilize private practice dr’s and hospitals.  One of the big carriers has a premium of $69 that includes Rx coverage and low co-pays for medical care ($20 Dr visits).  There are 2 plans that have $0 monthly premiums from lesser known carriers (both plans started in Southern California).  These 3 options are (HMO) plans where you choose a primary care provider (PCP).

 The MA-PD plans require that you specifically ask me for more information prior to an appointment, the attached form is so we can discuss them further. 

For individual health insurance quotes, click here.

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