Understanding Medicare

By Insure.com
Last updated Jul 6, 2010

Medicare is a health insurance program for people age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD). According to the federal Centers for Medicare & Medicaid Services (CMS), Medicare serves about 40 million beneficiaries.

The large majority of Medicare beneficiaries have original Medicare. This is the traditional fee-for-service arrangement, which means you can go to any health care provider who accepts Medicare. You must pay a deductible, and then Medicare pays its share of the costs and you pay your share.

Medicare & You

You can call the Medicare Choices Helpline at (800) 633-4227 and ask for a Medicare handbook.

This toll-free number is staffed by English- and Spanish-speaking customer service representatives from 8 a.m. to 4:30 p.m.

Hearing-impaired individuals using a telephone device for the deaf can call (877) 486-2048.

You can also view the handbook on Medicare’s official Web Site.

How does Medicare work?

Original Medicare, also called traditional Medicare and Medicare fee-for-service (FFS), is the most widely used and best understood choice through which Medicare beneficiaries receive their health care. Health care providers are paid based on the services they provide.

In general, your choices are less restricted with traditional Medicare than with other Medicare choices. For example, you can go to any doctor, hospital, or other health care provider who accepts Medicare. But your costs are likely to be higher than with other choices because you may also need to buy Medicare supplement (Medigap) insurance. Medigap policies can help defray some of the costs not covered by traditional Medicare.

Who pays for Medicare?

Medicare is financed by federal taxes and administered by the CMMS. Beneficiaries also have “out-of-pocket” costs: They must pay Medicare premiums, deductibles and co-payments, and Medigap premiums if they choose to purchase this supplemental insurance. Beneficiaries must also pay for their own routine physicals, custodial care, most dental care, dentures, routine foot care and hearing aids.

Who is eligible for Medicare?

To be eligible, you or your spouse must have worked for at least 10 years in Medicare-covered employment, be age 65 or older, and be a citizen or permanent resident of the United States. A younger person with a disability or with chronic kidney disease also might qualify for Medicare.

Are there income limits or medical requirements?

There are no income limits for Medicare. There are medical requirements for the delivery of services, because an individual must have a medical need for those services.

How do I enroll in Medicare?

Some people are enrolled in Medicare automatically. Enrollment is automatic if you are not yet age 65 and you already are receiving Social Security or Railroad Retirement benefits. If you are disabled, you will be automatically enrolled in both Part A and Part B of Medicare beginning with your 25th month of disability.

Most people have to enroll in Medicare. The enrollment period begins three months before you turn age 65 (or right away if you require regular dialysis or a kidney transplant) and continues for seven months. Applying early can help you avoid a possible delay in the start of your Part B coverage. If you have questions about Medicare eligibility or enrollment, call Social Security’s toll-free number, (800) 772-1213, weekdays from 7:00 a.m. to 7:00 p.m., EST. You may also enroll online by visiting www.socialsecurity.gov.

To apply for Medicare, contact any Social Security Administration office. (If you or your spouse worked for the railroad, contact the Railroad Retirement Board.) If you don’t enroll during these 10 months, you’ll have to wait until the three months beginning on Jan. 1, and your Part B coverage won’t start until July.

What happens if I wait to enroll?

Don’t put off signing up for Medicare. If you wait 12 or more months to enroll, your premiums are likely to be higher. However, you have some options if you have group health insurance based on your own or your spouse’s (or a family member’s) current employment.

Even if you continue to work after your 65th birthday, you should sign up for Part A of Medicare. Part A might help pay some of the health care costs not covered by your employer plan.

Part B is a different story, however. It might not be a good idea to sign up for Medicare Part B if you have health insurance through your employer. You would be required to pay the monthly Part B premium, and your Part B benefits could be of limited value when the employer plan is the primary payer of your medical bills. However, under some circumstances you will have to pay an extra 10 percent per year penalty for not immediately signing up for Part B.

What is a Medicare HMO?

Medicare health maintenance organizations (HMOs), where available, provide all Medicare-covered services under Parts A and B and may provide additional benefits — such as prescription drug coverage — that are not offered with traditional Medicare. However, Medicare HMOs are not widely available in some regions of the country.

What is a Medicare private fee-for-service (PFFS) plan?

PFFS plans are Medicare plans offered by private health insurers and are hybrids of Medicare HMOs and traditional Medicare fee-for-service plans. There is no provider network, which could be particularly important to beneficiaries who live in rural areas that historically have lacked private Medicare insurance options.

Can I join more than one plan?

No, you can’t join more than one Medicare health plan at the same time.

What if I want to leave a Medicare HMO or PFFS plan?

You must take care when you change how you receive Medicare services. This is particularly true when you leave a managed care plan, whether voluntarily or involuntarily. Because Medigap insurance is not needed when you’re in a managed care plan, beneficiaries returning to traditional Medicare have certain rights to buy Medigap insurance.

Where can I get help when changing plans?

You should contact your State Health Insurance Assistance Program (SHIP) for help.

If you have questions about Medicare, or if you are interested in changing the way you receive Medicare-funded health care services, contact your local SHIP office. Special rules and consumer protections sometimes apply when you change health plans. Additionally, if you or your spouse have health insurance through a former employer or union, contact your benefits representative before you make any new plan choices. Otherwise, you could lose future options or benefits.

Financial help and benefits
There are several programs available to help low-income Medicare beneficiaries pay for some of their Medicare out-of-pocket expenses. For each of these programs the income requirements vary.

What programs can help you if your income is low and you can’t afford the premiums, deductibles or Medigap?

The Qualified Medicare Beneficiary (QMB) Program pays for your Medicare premiums, deductibles, and coinsurance.

The Specified Low Income Medicare Beneficiary (SLMB) Program pays for your Medicare Part B premium.

The Qualified Individual 1 (QI-1) Program pays for your Medicare Part B premium.

The Qualified Individual 2 (QI-2) Program pays a small portion of your Medicare Part B premium. Individuals who may be qualified for any of these programs can apply at their local Medicaid offices.

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Medigap insurance: Filling in Medicare’s gaps

Medigap insurance: Filling in Medicare’s gaps
By Insure.com

Last updated Nov. 5, 2010

When you qualify for Medicare, policy choices abound. Will you be choosing Original Medicare or a Medicare Advantage Plan? Will you need Part D prescription coverage?

If you enroll in Original Medicare, Part A pays for care in a hospital or skilled nursing facility, as well as for home health and hospice care. Medicare Part B pays for treatment by physicians, outpatient hospital care, durable medical equipment and other medical services. But Medicare does not pay every medical charge or service. Depending on your health situation, you could be open to a variety of out-of-pocket medical expenses.

The federal government has authorized 10 standardized Medigap policies.

Enter Medicare supplement insurance — also known as Medigap policies — to plug the gaps left in Original Medicare. (Those with Medicare Advantage Plans are not eligible for Medigap policies.) Medigap policies are private insurance policies that cover Medicare coinsurance, co-payments and deductibles that you’d otherwise have to pay yourself. Some Medigap policies also pay for costs not covered by Original Medicare.

The 10 letters of Medigap
The federal government has authorized 10 standardized Medigap policies: Plans A through N. Depending on where you live, all 10 of these standard policies — or only a few — may be offered. If an insurance company wants to sell Medigap policies, it must sell at least Plan A. However, if an insurance company sells any other type of policy, aside from Plan A, it must also offer Plans C or F.

To purchase a Medigap policy that’s right for your situation, you need to review the choices annually to make sure your Medigap plan still fits your needs. Plan A offers a very basic supplement to Medicare coverage. Plan F offers much more coverage but is also more expensive. Plans K and L offer payment of 50 or 75 percent on certain co-payments, coinsurance and deductibles. Don’t confuse the Medigap policy designations with Medicare Parts A and B.

Each plan letter’s coverage is the same from insurance company to insurance company. For example, no matter which company is selling the policy, Plan C will contain the same coverage. (However, insurers in Massachusetts, Minnesota and Wisconsin are permitted to sell somewhat different combinations of benefits.

Medigap policies will generally pay most or all of the Medicare coinsurance amounts and Medicare’s deductibles. Certain plans will also pay for emergency medical care in a foreign country. (See chart below.) No plan will cover prescription drugs; for that you need to sign on with a Medicare prescription plan.

Also, your Medigap plan will not cover your spouse; you’ll each need your own policy.

Medigap policies don’t cover long-term care (like care in a nursing home), vision or dental care, hearing aids, eyeglasses or private-duty nursing.

If you’re interested in a Medigap policy, strike while the iron is hot! Your Medigap open enrollment period begins on the first day of the month in which you are age 65 or older and enrolled in Medicare Part B, and it lasts for six months. During this time, an insurance company can’t refuse to sell you any Medigap policy it sells, can’t make you wait for coverage to start (except possibly for coverage of pre-existing conditions), and can’t charge you more for a Medigap policy because of your health problems. (Medicare will still cover your pre-existing condition but you’ll have to pay your own out-of-pocket costs.)

There’s still another Medigap option. Medicare SELECT, sold in some states, can be any of the standardized Medigap Plans A through L except that you must use specific hospitals and, in some cases, specific doctors to get your full insurance benefits (except in an emergency). The advantage is that Medicare SELECT policies generally cost less than other Medigap policies. However, if you have a Medicare SELECT policy but don’t use hospitals or doctors on the list for non-emergency services, you will have to pay some or all of what Medicare doesn’t pay. Medicare will still pay its share of approved charges no matter which hospital or doctor you choose.

For all the details about Medigap plans and enrollment, see the latest “Choosing a Medigap Policy” handbook at www.medicare.gov.

http://www.insure.com/articles/healthinsurance/medigap.html

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6 questions to help your parent choose a Medigap insurance plan

6 questions to help your parent choose a Medigap insurance plan
By Rosanna Jordan, Insure.com
Last updated Nov. 7, 2010

You want to know that your parents are eating well and paying their bills on time. You should also know whether they are choosing appropriate health insurance. Relying solely on Medicare to pay health care bills could put your parents in a deep financial hole. Medicare supplement policies, known as Medigap plans, are available from private health insurance companies and provide coverage for expenses that your parents would otherwise have to pay out of pocket.

Navigating the Medigap road requires asking the right questions. Below are starting points for helping a parent evaluate the need for a Medigap plan.

Does my parent need Medicare supplement insurance?
According to the Kaiser Family Foundation (KFF), approximately 20 percent of the 47 million Medicare beneficiaries have purchased a Medigap plan. If your parents selected original Medicare, they should consider buying a Medigap plan.

For example, in 2010 Medicare Part A coverage has a $1,100 deductible that covers the first 60 days of a hospital stay. Beyond the initial 60 days, Medicare beneficiaries are responsible for a coinsurance amount of $275 per day for hospital stays between 61 and 90 days. Without a Medigap plan in place, a prolonged hospital stay could send seniors on a downward financial spiral.

To begin, evaluate your parent’s current health needs by writing down the health care services he’s received in the past 12 months. Include visits to the family doctor, annual checkups, preventive care and any visits to a specialist.

In addition to current health care needs, consider future needs. For instance, if one of your parents has made frequent visits to a specialist for arthritis or osteoporosis in the past few months, those visits may increase over the next year.

Which Medigap plan would fit my parent?
Consult a Medigap benefits grid that outlines the available benefits options. There are 10 Medigap plans that are differentiated by letters A through N. The plans are standardized, so benefits don’t vary among the same “letter” plan.

With your list of health care services in hand, highlight the ones your parent might use.

If your parent is relatively healthy and needs only basic benefits, he might select Medigap Plan A. But if international travel is a major part of his retirement, foreign travel emergency coverage may be important and he should select a Medicare supplement insurance plan that includes that benefit.

When should my parent enroll in a Medigap plan?
If one of your parents wants to buy a Medigap plan, she should buy one during her open enrollment period, which is a period of six months beginning on the first day of the month in which she is 65 and enrolled in Medicare Part B.

While your parent can buy a Medigap policy any time, open enrollment is the ideal time to enroll because the Medigap company cannot refuse to sell your parent a policy that it offers, it cannot charge your parent more due to their health and it can’t make her wait for coverage to start (although it may require a waiting period for coverage of pre-existing conditions).

Open enrollment (Nov. 15 – Dec. 31) for Medicare Advantage plans and Medicare Part D coverage is a good time to evaluate a parent’s existing and future health insurance needs.

Which company should my parent buy from?
Contact your state health insurance assistance program (SHIP) or the department of insurance in your state to find out which companies are licensed to sell Medigap plans in your state.

How much will my parent pay for a Medigap policy?
Medigap premiums are determined using a number of factors, including geographical rating and – depending on when you buy one — medical underwriting. Some health insurance companies will offer discounts to people who are married or non-smokers.

Ask which rating system the company uses to determine premiums. There are three rating systems:

Community-rated: Premiums won’t rise with age but they might rise due to factors like inflation.
Issue-age rated: Premiums are lower for people who buy at a younger age and the price doesn’t rise with age, but it could rise due to other factors.
Attained-age rated: Premiums go up as you get older and may also rise due to other factors.

What should I watch out for?
The National Association of Insurance Commissioners (NAIC) warns that it is illegal for anyone to pressure your elderly parent to purchase a Medigap plan. You should also be wary of anyone from a private health insurance company who claims to work for Medicare or who says that a Medigap policy is “approved” or “recommended” by Medicare.

http://www.insure.com/articles/healthinsurance/medigap-questions.html

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