October 15 through December 7, Medicare offers an “open enrollment” period for seniors. Every year during this time period Medicare recipients may sign up or switch their medical plans without penalty. Seniors can switch from Original Medicare (Part A and Part B) to a Medicare Advantage Plan (Medicare Part C) and vice versa. During the same time period seniors can reassess their prescription drug plan (Medicare Part D) and enroll in one that offers better prescription coverage. Any changes that are made will go into effect on January 1 of the new year.
Original Medicare Explained
Medicare is the federal government’s medical insurance plan that permits older adults to receive health care coverage. If you are 65 years old or older, a U.S. citizen or a permanent legal resident for at least five years, and you or your spouse have at least 10 years of Social Security work history, you are permitted to receive both in-hospital care (Medicare Part A) and out of hospital care (Medicare Part B).
Medicare Part A is the federal government’s hospital insurance program that is available to the majority of people when they turn 65 years old. In most cases you are automatically enrolled in this program. Once enrolled, most of your hospital expenses are covered. In 2017 your only expenditure will be a $1,288 deductible upon hospital admission; after that you are fully covered for your first 60 days. If your stay exceeds 60 days, you are responsible for a co-payment of an additional $322/day between day 61-and day-90. After 90 days there is an additional payment for “life time reserve days”.
Medicare Part B covers doctors, medical lab tests, and durable medical equipment. It does not cover regular eye exams, most routine dental care or hearing. Three months before your 65th birthday, the federal government will alert you to enroll. The standard Part B premium cost will be $121.80/month, although for people with incomes of $85,000 or higher, the cost will be slightly higher. There is also a $166/year deductible for all participants. After reaching the deductible, you are responsible for a 20% co-payment for most approved outpatient medical services.
Seniors who sign up for Medicare Part B are encouraged to enroll in a Medigap Plan. A Medigap plan is a supplemental insurance policy sold by a private insurance company that covers medical costs not included under Medicare. Each plan charges a monthly premium of between $100-$300 depending on coverage. Once enrolled Medigap plans pay the 20% co-payment not covered by Medicare and sometimes pays deductibles. They often cover other medical procedures like eye and ear and dental services as well.
Medicare Part B does not cover prescription drugs so seniors with Original Medicare are encouraged to enroll in a prescription drug plan called Medicare Part D. Medicare Part D is the federal government’s drug program that subsidizes the cost of prescription drugs for Original Medicare participants.
Each Medicare Part D plan offers a selection of drug categories called formularies that are approved by the federal government. Although each plan offers similar medications they do not necessarily need to be identical. Some plans offer generics formularies instead of specific brand names. This is important to some people who are partial to taking a brand over a generic drug.
In order to make a wise choice between plans, participants should go to the Medicare’s website, www.Medicare.gov/find-a-plan and fill in the medications you are taking. The website will list the plans that include your required medications and will give you information on how to enroll.
Medicare Part C Explained
Seniors are not restricted to Original Medicare; they can opt to choose a Medicare Advantage Plans also called Medicare Part C. These Advantages Plans are private insurance plans that have been approved by the government. They must offer the same basic services as Original Medicare and often include a prescription drug plan. There are two major differences between Original Medicare and a Medicare Advantage plan.
- Original Medicare is a nationwide health plan. Participating doctors can be located anywhere in the U.S. In an Advantage Plan, enrollees are restricted to using in-network providers that are usually in a defined state, region or municipality
- Many of Medicare Advantage plans offer their services at the same price as Original Medicare while others require higher premiums because they cover additional medical services like dental and eye care. Be aware however, that the extras might not be as plentiful as first noted. Dental coverage might only include annual or bi-yearly exams but will not cover filling cavities; or optometrist might cover occasional vision exams but not cover spectacles.
As we age we find our health requirements change. Medicare’s annual open enrollment period offers us the opportunity to reassess our health needs and choose a better medical plan and more suitable prescription drug plan without a penalty. With a little research and understanding of our medical requirements, we can take charge of our wellbeing and insure our medical, hospital and prescription drug program are the best fit for us.
Know someone who can use this information? Pass it on!