8 Questions Answered About the Medicare Maze

Medicare is government health insurance for people aged 65 and older, and for people with certain illnesses and disabilities. Today, more than 60 million people in the U.S. get their health coverage from Medicare.

The Medicare system is complicated. But learning the basics can save you money and help ensure that you get the health care you prefer. Here are eight frequently asked questions and answers about Medicare that will help you as you navigate and plan.

Medicare Part A is hospital insurance. It helps cover care in hospitals, skilled nursing care, hospice care, and skilled nursing care at home under some circumstances.

Medicare Part B is medical insurance. It helps cover:

• Services from doctors and other health care
• Outpatient
• An annual wellness visit and preventive services, such as immunizations and
• Durable medical equipment, such as hospital beds, wheelchairs and

Together, Parts A and B are called Original Medicare. Medicare Parts A and B do not cover long-term care, custodial or personal care, meal delivery, homemaker services or any other assistance that isn’t related to medical care.

Medicare Part D is prescription drug coverage. It helps cover the cost of prescription medications and many vaccines. Medicare Part D coverage is purchased through private insurance companies.

Medicare Advantage plans (also called “Part C”) are Medicare-approved plans from private insurance companies that you can enroll in instead of Original Medicare and a drug plan. These plans may offer extra benefits, such as some dental, vision and hearing coverage. Some Medicare Advantage plans also cover nonmedical in-home care services, such as medication management, personal care, meal preparation and transportation. You usually need to use doctors and other providers within the plan’s network. You may need to get prior authorization for some services.

Medicare Supplemental Insurance (“Medigap”) is extra insurance you can buy from a private company to help pay the share of your costs that is not covered by Original Medicare Parts A and B. You can’t purchase a Medigap plan if you have opted for a Medicare Advantage plan.

Your Initial Enrollment Period begins three months before your 65th birthday, and ends three months after your birthday month. People who are already getting benefits from Social Security or the Railroad Retirement Board will be automatically enrolled in Part A and Part B on the first day of the month they turn 65. Others should contact Social Security to learn about their eligibility.

In most cases, to avoid penalties, you shouldn’t delay. If you wait until a year after your Initial Enrollment Period to sign up for Part B, for the rest of your life you will pay a 10% higher premium per each year you delayed. For Part D (prescription drug coverage), the lifelong penalty is 1% per month past the date of your first eligibility.

Possibly not, making this an important consideration as you first enroll. Medigap plans are required to accept anyone during their Initial Enrollment Period, but after that you can be turned down or charged more if you have preexisting health conditions. (This is not the case with Medicare Advantage plans.)

If you get your health insurance

through your or your spouse’s employer, and the company has more than 20 employees, you will probably want to sign up for Part A at the usual time, as most people do not pay a premium. You may be able to delay signing up for Part B. Talk to your company’s benefits administrator before making this decision.

Each year, an Open Enrollment Period is held from October 15 – December 7. This is the time when current Medicare enrollees can join, drop or switch their plan. They can select a different or new prescription drug plan.

They can switch Medicare Advantage plans. They can switch from a Medicare Supplemental plan to a Medicare Advantage plan or possibly the opposite. (There is also a Medicare Advantage Open Enrollment Period from January 1 – March 31.)

If you do, you’re not alone—a study from the Kaiser Family Foundation (KFF) showed that 70% of Medicare enrollees stay in their current plan without comparing their options. But the details of plans change from year to year. Your premium might rise. Your doctor, the medications you take, your pharmacy and the home care services you use might no longer be fully covered. Another plan might be a far better choice for you. Take your time and do your homework. KFF reports that the average Medicare beneficiary has 39 plans from which to choose!

Each fall, all Medicare households should receive a paper or online copy of the “Medicare & You” handbook with information about changes in coverage. You can also research your options with:

• Your State Health Insurance Assistance
• Medicare’s plan finder.
• Your insurance agent or financial

The information in this article is not intended to replace expert financial advice. For questions about Medicare, visit www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227).

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