| Wed, Nov 27, 2013 @ 09:00 AM

Top 3 Questions About Medicare…Answered

Posted by Medicare Made Clear

medicare advantage planMost people ask the same questions when they are first exploring Medicare. How do we know? We asked! Here are the questions and the answers to give you a good start on your journey.

1. What does Medicare cover?

Original Medicare consists of Part A and Part B. Part A helps pay for care you receive in a hospital and in a nursing facility after a hospitalization. Part B helps pay for doctor visits and care you receive as an outpatient. Original Medicare is run by the federal government.

Medicare Part C is Medicare Advantage. Every Medicare Advantage plan must provide all the coverage offered by Original Medicare Parts A and B. Many offer additional coverage like dental and vision.

Most Medicare Advantage plans include Medicare Part D prescription drug coverage. Original Medicare does not cover prescription drugs, but you can buy a standalone Part D prescription drug plan to add this coverage.

Medicare Advantage plans and prescription drug plans are offered by private insurance companies approved by Medicare. Each company creates its own plans, but every plan must meet the standards set by Medicare. Plans are offered regionally and may vary in coverage and costs. Most plans have provider, hospital or pharmacy networks that you must use to get the plan’s price for services.

2. How much will I pay for Medicare?

Medicare Part A is premium free for most people, because of the Medicare tax you or your spouse pay as an employee. Medicare Part B charges a monthly premium. The Part B premium amount is $104.90 in 2013 for most people. People with higher incomes may pay more.

In addition to the Part B premium, you also will pay a share the cost of the care you receive under Part A and Part B. You pay these costs in the form of deductibles, copayments and coinsurance. The amount you pay depends on which services you use and how often. In general, you pay a portion of the cost for each health care service or product you use once you’ve met the deductible.

In 2013, the Part A deductible is $1184 per benefit period. A benefit period begins the day you go into a hospital or skilled nursing facility. It ends when you have been out for 60 days in a row. The 2013 Part B deductible is $147 per year. Once you meet the deductible, you pay coinsurance equal to 20% of the Medicare-approved cost for most services. Medicare pays 80%.

With a Medicare Advantage plan you continue to pay the Part B premium to Medicare. You may also pay an additional premium to the plan. Other cost sharing is set by each plan and may include deductibles, copayments and coinsurance. This is also the case with standalone prescription drug plans.

3. Do I have to sign up for Medicare when I turn 65?

The answer to this question is not a simple yes or no. The good news is that it’s not as complicated as it may seem at first.

Some people get Medicare automatically. This happens if you are already receiving retirement benefits from Social Security or the Railroad Retirement Board when you turn 65 or otherwise become eligible for Medicare. Medicare will send you an Initial Enrollment Period package that includes your Medicare card. You will be automatically enrolled in Medicare Part A and Part B.

If you are not receiving retirement benefits from Social Security or the Railroad Retirement Board when you become eligible for Medicare, you need to call or visit your local Social Security office during your Initial Enrollment Period (IEP). Your IEP starts three months before your 65th birthday month and lasts for seven full months. For example, the IEP for someone turning 65 on June 23, 2014 would be March 1, 2014 through September 30, 2014. The IEP for people who qualify for Medicare due to disability depends on the date they began receiving disability benefits.

You get to decide whether you want both Part A and Part B, even if you are automatically enrolled in both. Most people take Part A because there is no premium. Part A also can work as secondary coverage for those who have other health insurance, such as through an employer or union. It may make sense to delay getting Part B—and delay paying the premium—if you have other insurance. Just be sure to pay attention to timing when you are ready to enroll. You may incur a late enrollment penalty unless you qualify for a Special Enrollment Period.

You must have both Part A and Part B to join a Medicare Advantage or a Part D prescription drug plan. It’s important to note that Part D may charge a premium penalty if you don’t sign up during your IEP and want it later. To avoid the penalty, you need to have other drug coverage at least as good as Part D, and you can’t be without this coverage for more than 63 days before you sign up for Part D.

Still have questions?

It’s important to be informed and feel prepared when making Medicare choices. You have many resources for answers to your Medicare questions. As a next step, you may want to visit Medicare.gov or call your local Social Security office.

For more information, explore MedicareMadeClear.com or contact the Medicare helpline 24 hours a day, seven days a week at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048.

Resources:

Medicare.gov: The official U.S. government website for Medicare.

Medicare & You: Learn about Original Medicare coverage and costs in this annual publication.

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