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Navigating Health and Aging: The ABCDs of Medicare

Understanding Medicare and all of its various parts can be daunting. Open enrollment for Part C and D, the Prescription Coverage Plan, began on Oct. 15 and runs through Dec. 7. If you do not have Part D, your opportunity to sign up is now. If you already have a Part D plan, then it is now time to evaluate whether the one you have is still the best plan for you.
This article is a crash-course on Medicare. It is divided into 4 components: Part A which covers in-hospital costs, Part B which covers outpatient and doctor visit costs (and various other medical-related fees), Part C which is also referred to as Advantage Plans (this is instead of A & B, not in addition to) and Part D, prescription coverage. You choose your plans.
Part A and B eligibility begins when you turn 65. You have 7 months to sign up for Part A and B: three months prior to your birthday; the month of your birthday; and three months after your birthday. Part A comes with Social Security benefits. However, if you still work and receive insurance from your employer, then you can defer Part B until you no longer carry insurance privately. The premium for Part B, if you choose it, would be deducted from your Social Security check.
Part C (not made by Medicare) is run by private insurance companies or HMO's. It is managed care and comes with low premiums (C=cheap premiums) but you must pay deductibles and have a limited network of physicians, hospitals, and rehabilitation facilities. Prescription coverage can be included in Part C. Sounds like a bargain, right? Yet, if you are frequent column reader, you will remember that I impress upon you - there are no free lunches, buyer beware!
Part C offers benefits such as vision and dental benefits. Remember there is a trade off. Too often it is necessary to travel out of county for services, there is a very limited network of providers and it is "managed care." I am personally going out on a limb to say: I am not sold in fact, I have seen many circumstances and issues with my clients who have managed care, and they have been forced into unsatisfactory situations. (I am certain to receive comments here and I have an open mind, but this statement is meant to have people enter into Part C with eyes wide open.)
Part D, the prescription coverage plan that must be accompanied by A, includes many different plans. Each Medicare Prescription Drug Plan has its own list of covered drugs (called a formulary). Many Medicare drug plans place drugs into different "tiers" on their formularies. Drugs in each tier have a different cost.
It is important to "shop around" for the right fit between your medications and the drugs paid for at the highest rate (on the formulary). Not all plans offer the same coverage. In addition, formularies may change. Plus, changes in your medications can affect what you pay every month.
For example, I have one client who requires a medication that costs approximately $240 per month. Her existing Part D coverage does not pay for the drug because it is not in their formulary list. Day 1 of open enrollment, I went to Medicare.gov and plugged in her information as well as her drug list. The computer shops around and gives a list of the top Plan D benefits specific to your drug list. This client will now pay $22.50 per month for the premium and $30 for the drug not on the other plan's formulary. The total monthly cost with all medicines and premium will be $65 as opposed to approximately $260, plus the previously paid $28.97 monthly premium. Compare this $288.97 per month vs. $65 per month.
There is no catch here folks, just smart shopping.
If you are computer savvy and can go to the Medicare website and enter in information, you can easily navigate the system. If you need help, the Bureau of Aging and Disabilities schedules appointments to go through your options with you.
Part D is also associated with "the donut hole". What does that mean? That means if you spend $2,850 total (your part and your plan's contribution) then you go into the donut hole until the total outlay of money reaches $6,455. Once you reach $6,455 catastrophic coverage kicks in and you pay 5 percent of the costs.
For those whose monthly income is less than $2,872 per month or $34,470 per year (single) - or $3,877 per month or $46,530 per year (couple) - there is a program called SPDAP (Senior Prescription Drug Assistance Program). There are no asset limits on this plan. This program pays up to $40 per month toward monthly Part D premiums and has plans to cover costs when you hit the donut hole. Again, you just have to know about these options to utilize them. The Bureau of Aging and Disabilities is a great resource with wonderful, helpful people.
Last, but definitely not least, Gap Coverage or Supplemental Secondary Insurance is available to purchase, and this will act as coverage for the "gap" in Medicare Part A and B coverage. These plans (the most common "F") are with private insurance companies. Nonetheless, they are government regulated so that they must offer the same coverage, regardless of which company you choose. The only difference is the cost of the premium. In other words, you receive the same coverage, with different premiums. This is a little known fact.
Part C and Supplemental Plans offer commission to brokers, and here comes the buyer beware part: Trust your broker. How many people are told that the plans have to offer the same coverage within the plan, but different insurance companies charge different rates?
There is not enough room to cover everything you need to know about Medicare in one column. The Medicare website http://www.medicare.gov has information about coverage. The Bureau of Aging and Disabilities can head you in the right direction at 410-386-3800. Medicare Supplement Services is a trustworthy broker to defer questions to about Medicare Supplemental and Part C plans 301-293-3617.
Good Luck!

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