New to Medicare? 10 Things to Know
- What to Know About the Largest Health Insurer in the U.S.Did you know that nearly 60 million Americans are covered under Medicare today? That number is set to explode, however, as the baby boomers turn 65. By 2030, another 20 million will have signed up. If you’re one of them (or even if you already have Medicare), here’s what you need to know about this form of insurance.
- 1. There are four parts to Medicare (A, B, C and D).Part A covers inpatient hospital stays, hospice care, short-term care in a skilled nursing facility, and some home health services. Part B covers outpatient services, such as doctor visits, ambulatory surgery, durable medical equipment, and home health services. Part D adds prescription drug coverage. Part C, or Medicare Advantage, is the managed care form of Medicare run by private insurance companies. It covers the same services as Parts A and B and usually prescription drug coverage. It’s an alternative to Original Medicare.
- 2. Original Medicare is one type of Medicare coverage.Part A and Part B make up Original Medicare. Most people get Part A for free, but you will pay a monthly premium for Part B. You also pay deductibles, coinsurance or copayments (copays) for most services. If you want drug coverage, you have to purchase a Part D plan separately. Under Original Medicare, you can see any provider who accepts Medicare. You may also hear people call this coverage Traditional Medicare.
- 3. Medicare Advantage is the other type of Medicare coverage.Medicare Advantage plans must include all the benefits of Original Medicare. But you buy these plans from private insurance companies. Almost all of them are some type of managed care plan, with. They may have limited provider networks and may require specialist referrals. They may also have premiums, deductibles, and copayments or coinsurance. However, Medicare Advantage plans cap your annual out-of-pocket costs. Most plans cover prescription drugs and other benefits not covered by Medicare, such as vision, dental, and hearing services.
- 4. Some Medicare Advantage plans are better than others.Medicare evaluates Medicare Advantage plans using criteria such as customer satisfaction and quality of care. Plans receive between one and five stars, depending on their scores. Five-star plans have the highest scores. Medicare considers them to be excellent plans. So, Medicare allows you to switch into a five-star plan any time during the year—not just during open enrollment. However, you can only do this once outside of open enrollment. Plan ratings come out every fall and can change from year to year. The same is true for five-star Part D plans. Visit Medicare.gov to learn how the plans in your area rank.
- 5. You have deadlines to meet.You’re automatically enrolled in Medicare Parts A and B when you turn 65 if you’re receiving Social Security benefits and paid Medicare payroll taxes while employed. If you’re not yet receiving Social Security benefits, you have to sign up for Medicare. To avoid paying a penalty, sign up during the seven-month period that begins three months before you turn 65. If you don't enroll when you are first eligible, you can enroll between January 1 and March 31 each year. Coverage will begin July 1. Once you have Medicare, you can make changes during the open enrollment period between October 15 and December 7 each year.
- 6. Your monthly premiums depend on your income.In most cases, you won’t pay a premium for Part A if you paid Medicare payroll taxes while working. However, you will pay premiums for Part B and Part D. If your individual adjusted gross income in 2018 was above $87,000, you’ll pay a higher premium for Parts B and D than those with lower incomes. The standard monthly premium for Part B in 2020 is $144.60, up from $135.50 in 2019. Base premiums for Part D differ depending on the plan. The higher your income, the more you will pay above the base premium for Part D.
- 7. You may need Medigap insurance.You can rack up some hefty out-of-pocket costs with the deductible, coinsurance and copays under Original Medicare. And there is no annual limit on your out-of-pocket spending. If you opt for Original Medicare, you may want to consider a supplemental insurance policy, or Medigap plan. Medigap helps pay for certain expenses Medicare doesn’t cover. This includes deductibles, copays and coinsurance. However, Medigap doesn’t cover premiums and you have to pay an additional premium to buy Medigap. Medigap plans don’t work with Medicare Advantage plans to cover costs. If you choose a Medicare Advantage, it is illegal for anyone to sell you a Medigap plan.
- 8. You should check to see whether your drugs are covered.All prescription drug plans and Medicare Advantage plans have drug formularies. These are lists of the medications they cover. Plans sort the drugs into tiers the higher the tier, the higher your copay. Before you buy a drug plan or Medicare Advantage plan, find out if your medication is covered. If so, ask about the copay tier and how much it will cost. You can learn this information by contacting the prescription drug plan or Medicare Advantage company. Many plans also post their formularies online.
- 9. You have protections and rights under Medicare.These include the right to be treated with dignity and respect at all times, to be protected from discrimination, and to have your personal and health information kept private. You can also get emergency care when and where you need it, appeal payment or coverage decisions, and file complaints if you’re unhappy with the care you receive.
- 10. Medicare doesn’t cover long-term care.Approximately 70% of us will need long-term care at some point. This includes help with daily activities, like bathing and cooking, as well as some medical care. Neither Medicare nor most health insurance plans, including Medigap, cover this type of care. If you’re worried about costs, check into long-term care insurance. Most people who can’t afford long-term care eventually qualify for Medicaid, which does cover long-term care. Medicaid is the joint federal-state government health program for low-income people.
10 Things to Know About Medicare Health Insurance & Eligibility