Medicare Plans

A federal health insurance program, Medicare is primarily for individuals age 65 or older, younger people with disabilities, and for people with End Stage Renal Disease (permanent kidney failure).

Original Medicare refers to Part A and Part B, the parts of Medicare that were first established by the Social Security Amendments of 1965. It is often thought of as traditional Medicare. The program is run by the federal government as opposed to private insurance companies.

Medicare has four parts:

Parts A, B, C and Part D.

PART A

Part A covers inpatient care you receive in a hospital, skilled nursing facility (SNF) stays after an inpatient hospitalization, hospice care regardless of your location, and a limited number of home health services.

PART B

Part B covers most everything else from your doctor visits to blood work to procedures and X-rays. While a limited number of medications are covered by Part B, Original Medicare generally does not offer prescription drug coverage outside of the hospital. A separate Part D prescription drug plan is necessary for coverage of those medications.

PART C

Known as Medicare Advantage, Part C was enacted with the Balanced Budget Act of 1997.1 and was referred to as Medicare+Choice before it became the program we are familiar with today.

Part C covers everything that Part A and Part B do but can also offer supplemental benefits. Some Medicare Advantage plans include Part D prescription drug benefits as well.

PART D

Medicare Part D is the newest addition to the Medicare family, becoming law in 2003 as a part of the Medicare Modernization Act (MMA). Part D brought prescription drug coverage to Medicare enrollees, relieving the burden of expensive prescription drug costs for seniors and the disabled.

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FREQUENTLY ASKED QUESTIONS

What is the difference between an Advantage Plan and a Supplement Plan?

This is probably the question that confuses people the most when deciding what choice to make with Medicare. There are several major differences between the two plans, with pros and cons to each. Also, since plans are regulated by individual states, each has specific plans and plan offerings. I can provide you with a plan comparison from the various companies so that you can make an informed decision.

Here is a comparison between the two choices.

SUPPLEMENT PLANS

Also referred to as Medigap, Medicare Supplements are private insurance policies designed to cover the gaps in Medicare coverage.

All plans are “standardized” and must offer the same level of coverage depending on which policy you choose. You may find substantial price differences between each insurance company.

ADVANTAGE PLANS

Medicare Advantage plans are a popular low cost alternative to Medigap coverage. These insurance policies are offered by private insurance companies with a contract from Medicare.

Advantage plans will usually have a low or $0 premium in addition to your regular Part B premium. There may also be some plans that offer assistance with your Part B premium. This type of plan may include Part D prescription drug coverage although health coverage only is also available.

Medicare Advantage Plans may also offer extra coverage such as vision, hearing, dental, and/or health and wellness programs.

In all types of Medicare Advantage Plans, you’re always covered for emergency and urgently needed care as they are required to cover all of the services that original Medicare covers except hospice care. Original Medicare covers hospice care even if you’re in a Medicare Advantage Plan.

What about enrollment windows and delaying enrollment?

Delaying enrollment can result in higher premiums and also a delayed access to coverage. I can help you understand the risks involved and help you make an informed decision.

ENROLLMENT WINDOWS

Your initial enrollment window allows you to enroll in all four parts: A, B, C and D. When your initial enrollment window ends, you can only sign up for Medicare Part A and B during the general annual enrollment period from January 1–March 31, with coverage effective July 1.

And you can sign up for Part D during the annual enrollment period from October 15–December 7, with coverage effective January 1 of the coming year.

So if you delay your enrollment, you could be paying higher premiums when you eventually do enroll, and you’ll have to wait until an open enrollment period in order to have access to coverage. If you’re only enrolled in Part A, for example, and you get diagnosed with a serious illness in April, you’ll have to wait until the following January to have Part D coverage, and until the following July—more than a year in the future—to have Part B coverage.

Although Medigap plans don’t have late enrollment penalties, insurers in most states are allowed to use medical underwriting if you apply for a Medigap plan after your initial enrollment window (when you’re first eligible for Medicare) ends. This means they can charge higher premiums or reject the application altogether if your medical history doesn’t meet their requirements. There is no annual open enrollment window for Medigap plans, so unless you’re in one of a handful of states that have guaranteed-issue rules for Medigap plans, you might be unable to purchase Medigap coverage if you don’t do so during your initial enrollment period when coverage is guaranteed-issue.