If you just signed up for Medicare, or are planning to do so, you may feel overwhelmed by all the information you will receive. We can help simplify the whole process by breaking Medicare down into four steps.
- Understand Medicare Parts A, B, and D — When you sign up for Medicare, Parts A and B are supplied by the government. When you enroll for Medicare through Social Security, these are the parts you will receive. Part A is hospital coverage for hospital or skilled nursing care. Part B is outpatient coverage for doctors, diagnostic tests, lab work, and so forth. Part D is drug coverage to reduce your costs of prescriptions. You qualify for these coverages the first day of the month you turn 65, or at an earlier date if you have a qualified disability.
- Understand your costs for each part — For most people, Part A is free as long as you or your spouse has worked for at least 10 years. Part B is income-based, with a base cost in 2016 of $121.80 per month. Those with higher incomes pay an income-adjusted cost. The income Social Security uses is from your last tax return, so if you have seen a reduction of income contact them and ask for a recalculation. Part B costs are deducted from your monthly Social Security check, unless you have deferred benefits. In that case you will be billed quarterly for your Part B costs until you begin accepting Social Security benefits. Part D is supplied by insurance companies, and the premium varies by state and company. Costs are paid directly to them, or you can request deduction from your Social Security check. There is an income adjustment applied for those with higher income brackets.
- Understand what is covered and what is not — You get most medical costs covered by Medicare, but you still have responsibility for expenses such as deductibles, co-pays, and co-insurance premiums. Part A will pay for your first 60 days of a hospital stay but reduces benefits after that, so you may need a supplemental policy to cover longer stays. Part B pays 80% of your outpatient costs after a one-time deductible each year. You are responsible for the other 20%, so you could be responsible for a lot of costs if you have an extended illness. This is another cost you may wish to cover with a supplemental policy. Part D for prescription drugs has co-pays built in, so you don’t need a supplement.
- Understand your need for supplemental coverage — As we mentioned above, supplement insurance may be needed to avoid excessive costs when Medicare won’t cover an illness. Medicare Advantage plans, also called Part C, replace Medicare in paying costs of coverage. Part C uses an HMO or PPO style of coverage, so you need to see those healthcare providers to obtain the lowest co-pays. Medigap plans cover the costs Medicare doesn’t, and also allows you the flexibility of using any physician or other healthcare provider who is enrolled in Medicare. Medicare Advantage plans have lower premiums than Medigap plans, but remember you will be paying co-pays to providers in the Advantage system, while most Medigap providers will have no co-pays.
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If you need assistance with obtaining the best Medicare Advantage plans, or any other parts of the Medicare process, contact the Insurance Hub. We have specialists who can assist you with the Medicare process and help you get the best coverage at the lowest cost. Don’t choose providers from ads you get in the mail; contact the Insurance Hub instead.