Like most seniors, there’s a good chance you’ve heard of Medicare – you may even know that it’s a federally funded health insurance program. But if you’re not enrolled, you may not understand in detail the different parts of the program and how they work together to provide health insurance coverage. If you’re approaching the age of 65 and interested in learning more about Medicare Part A and Part B, here’s some information to get you started.
What Is Medicare Part A – Hospital Insurance
Medicare coverage is divided into several parts, which are differentiated by letters of the alphabet. Medicare Part A is one of the basics, providing hospitalization coverage, including hospital stay, skilled nursing facility care, home health care (skilled nursing, physical therapy), and hospice care. For most people, Medicare Part A is premium-free, meaning there is no charge for coverage as long as you meet a few basic eligibility requirements.
Generally, as long as you are a permanent resident of the United States and you or a spouse paid Social Security taxes while employed, enrollment is automatic. While Medicare Part A is free, there are deductibles and co-insurance that you are responsible for paying.
What Is Medicare Part B – Medical Expenses
Medicare Part B covers expenses that are medically necessary to treat or prevent a disease or condition. Basically, other fees that occur outside of room and board while in the hospital- those related to diagnostic testing, preventative care, and the supplies needed to diagnose or treat medical conditions. Fees for visiting the doctor are also included in Medicare Part B. Medicare Part B pays 80 percent of approved charges. Part B is not premium-free.
The standard Part B premium amount in 2022 is $170.10 (or higher depending on your income).
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Medicare Advantage (MA or Part C), is a popular alternative to traditional Medicare. Since 2010, enrollment increased 71 percent, with as many as one in every three eligible seniors today choosing a Medicare Advantage plan over Original Medicare. Understanding this option is a critical step in managing health care into retirement. Here are some things to consider, along with a few pros and cons of Medicare Part C.
The Differences Between Original Medicare and Medicare Advantage
Original Medicare is fairly basic. Coverage includes hospital insurance (Part A) and medical insurance (Part B). While Part A is free for most people, Part B carries a monthly premium. Prescription drug benefits (Part D) are not part of Original Medicare but can be added for an additional monthly premium.
Seniors enrolled in Original Medicare can visit any doctor or hospital they choose, as long as the provider accepts Medicare. While a good percentage of costs are covered, seniors are responsible for out-of-pocket expenses, like deductibles, coinsurance, and copays. Many people add Medicare Supplement insurance (Medigap) to help shoulder some of these costs.
By contrast, Medicare Advantage is offered by private insurance companies as an alternative way to receive Original Medicare. With an MA plan, you receive Part A and Part B benefits, as well as additional benefits not covered by traditional Medicare. Most MA plans include coverage for prescription drugs, as well as dental, vision and in some cases, even hearing.
Unlike Original Medicare, with Medicare Advantage, you are limited to doctors and hospitals that are part of a specified network. Networks can be large, or narrow depending on where you live and a referral may be needed to see a specialist.
Is Medicare Advantage a Good Deal?
With comprehensive benefits and low premiums, Medicare Advantage sounds like a great deal. After all, putting together a similar plan using traditional Medicare would mean adding a prescription drug premium and maybe even Medigap to shoulder out-of-pocket costs. However, it’s important to look at your needs carefully to decide if Medicare Advantage makes sense for you.
Things to Consider
Network Availability Medicare Advantage may be a good option if the network includes providers you already use. Look carefully at which doctors are in the plan’s network, and whether or not you need a referral to see a specialist.
Out-of-pocket Expenses For those in good health who will don’t expect to visit the doctor’s office or hospital regularly, Medicare Advantage can be a great asset, offering additional benefits at a low cost. If, on the other hand, you will be visiting the doctor frequently and expect to have many copays, traditional Medicare supplemented with a Medigap plan can help with expenses.
The Bottom Line
Medicare Advantage is a great option for seniors looking for comprehensive care at an affordable price. As long as you can work within the network model, and won’t be needing a lot of specialized care, an MA plan may be a good deal.
Medicare Advantage Stats: http://www.kff.org/medicare/issue-brief/medicare-advantage-2017-spotlight-enrollment-market-update/
Annual Enrollment Period (AEP), is the one time of year when you can make changes to an existing Medicare Advantage or Prescription Drug plan. Basically, you have a few choices. You can join a new Medicare Advantage (MA) Plan or Prescription Drug Plan (PDP), switch between MA plans, or leave a Medicare Advantage Plan to return to Original Medicare. With many options, the Annual Enrollment Period can be confusing. Here are five frequently asked questions, with answers to help you easily navigate this important time of year.
1: When is Annual Enrollment?
A: Annual Enrollment begins on October 15th and ends on December 7th.
These dates are important to remember. If you make changes at any time during Annual Enrollment, they will take effect on January 1st. Remember, in most cases, Annual Enrollment is the only time you can move to a new Medicare Advantage or Part D plan. Be sure to do research ahead of time and be ready to switch if that’s what you decide to do.
2: I’ve read my Annual Notice of Change (ANOC), and my costs are going up. What can I do?
A: Annual Enrollment is your time to make changes to your Medicare plan.
As a member of a Medicare plan, you should receive an Annual Notice of Change in the mail by the last day of September. This important document includes any changes in costs and bhttps://www.ssiinsure.com/medicare-annual-notice-change/enefits that will impact your current plan in the upcoming year. If, after reviewing your ANOC, you no longer want to continue with the plan you have, now is the time to change. During Annual Enrollment, you may make the following changes:
Change from Original Medicare to a Medicare Advantage Plan.
Change from a Medicare Advantage Plan back to Original Medicare.
Switch from one Medicare Advantage Plan to another Medicare Advantage Plan.
Join a Medicare Prescription Drug Plan.
Switch from one Prescription Drug Plan to another Prescription Drug Plan.
Drop Medicare Prescription Drug coverage completely.
Don’t forget, Original Medicare does not include prescription drug coverage. If you leave a current Medicare Advantage Plan with prescription coverage and return to Original Medicare, you will need to join a standalone Part D plan. If you do not enroll in a standalone Part D plan, a Part D penalty may apply.
3: Annual Enrollment ended, but I do not like the new Medicare Advantage Plan I joined. What can I do?
A: After Annual Enrollment ends, there is an Open Enrollment Period from January 1stto March 31st.
The Open Enrollment Period was created for people who are dissatisfied with their Medicare Advantage Plan after the Annual Enrollment Period ends. This is another time, in addition to, Annual Enrollment when you can disenroll. During this period, you can switch from a Medicare Advantage Plan to Original Medicare plus a Part D Plan or switch from one Medicare Advantage Plan to another. Any changes take effect the month after it is submitted.
4: Is Annual Enrollment the same as Open Enrollment for the Health Insurance Marketplace?
A: No. Open Enrollment for the Health Insurance Marketplace is not Open Enrollment for Medicare.
The federal health exchanges were created to provide insurance options for underinsured or uninsured Americans in need of health insurance coverage. As a member of Medicare, Annual Enrollment (Oct 15-Dec 7) is for you to change your Medicare plan only.
5: If I want to make changes to my Medicare plan, what do I need to do?
A: Joining, switching, or dropping a Medicare Advantage Plan or Prescription Drug Plan during Annual Enrollment is easy.
To join a Medicare Advantage Plan, simply enroll in the plan and your old coverage will be discontinued automatically.
To switch between MA plans, simply join the new plan and you will be dis-enrolled from the old plan automatically when your new coverage starts.
To switch from an MA plan back to Original Medicare, contact your current plan.
To join a Prescription Drug Plan, enroll in the plan you choose and coverage will begin January 1st.
Now that you’ve decided to join Medicare Advantage (Part C) as a way to receive your Medicare benefits, you may be wondering when you can enroll. Medicare only allows you to join, switch or make changes to Part C at very specific times—when you first get Medicare and during yearly enrollment periods. It’s important to know when these specific deadlines occur to avoid missing them and delaying your health care coverage.
Initial Enrollment Period
When you first become eligible to receive Medicare, you enter your Initial Enrollment Period. This is a 7-month period of time that begins 3 months before your 65th birthday, includes your birthday month and ends 3 months after. For 7 full months, you are in your unique initial enrollment period and can sign up for Medicare Part C. In most cases, this is the best time to join. However, if you didn’t join and you already have Original Medicare, you can still join a Medicare Advantage plan during other enrollment periods.
Other Enrollment Periods
Annual Enrollment extends between October 15 and December 7. During this time, anyone can join, switch or drop a Medicare Advantage plan. As long as the plan you are requesting receives your information by December 7, your new coverage will begin on January 1. During Annual Enrollment, you can:
Change from Original Medicare to a Medicare Advantage plan.
Change from a Medicare Advantage Plan back to Original Medicare.
Switch from one Medicare Advantage plan to another Medicare Advantage plan.
Special Enrollment periods were created for people to join and make changes to Medicare Part C when circumstances make it difficult for them to meet regular enrollment periods. For instance, if you move, lose your current coverage, have the opportunity to get other coverage or meet one of several other special situations, you can usually join, switch or drop a Medicare Advantage plan.
For example, if you are enrolled in Medicare Part C, but move to a new address with better coverage available, you have 2 months to switch plans. If you were living abroad, but are now back in the United States, you have 2 months to join a Medicare Advantage plan. Or, if you lose coverage through an employer (COBRA included) you typically have 2 months to join a Medicare Advantage plan. While there are many special circumstances that may qualify for Special Enrollment, here is a quick summary of the main conditions that meet Special Enrollment criteria:
Move to a new address, move back into the country or move into or out of a nursing home or assisted living facility.
No longer being eligible for Medicaid or extra help, or losing employer coverage.
Have your current Part C plan terminated by Medicare or not renewed.
Reviewing Coverage and Switching Medicare Advantage Plans
When the goal is to spend the least amount of money for the most amount of coverage, you owe it to yourself to get the best deal you can with Medicare Part C. Initial Enrollment is usually the best time to sign up, but once you have coverage, Annual Enrollment (Oct 15 – Dec 7) is a great time to make changes to an existing plan or switch between plans. If you miss the December 7 deadline, you can still drop your current Medicare Advantage plan and return to Original Medicare during Medicare Advantage Dis enrollment (Jan 1 – Feb 14).
If you leave your plan and return to Original Medicare, you have until February 14 to join a prescription drug plan. However, you may not switch from Original Medicare to a Medicare Advantage plan or switch between Medicare Advantage plans during this time.
Even if you think your current Medicare Advantage plan meets your needs, it makes sense to look over new coverage options. Shopping around for better rates and benefits for the upcoming year is a smart way to make sure you’re getting a plan that fits your health care needs and your budget.