| Medicare Basics |
| Q.
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When Does a person qualify for medicare?
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| A.
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Most people “age-in” to Medicare when they turn 65 and qualify for premium-free Part A and for the Part B of Medicare, for which they pay a monthly premium. Others will qualify for Medicare due to disability prior to age 65. To qualify for “premium free” Part A, a person must have worked and paid into the Social Security system for a minimum of 40 quarters (10 years). Otherwise they may either pay a premium to get Part A or not be eligible for it.
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| Q. |
What are the parts to Medicare and what do they mean? |
| A. |
Not so long ago, Medicare was simpler. It had just two parts: Part A & Part B. Part A is the “hospitalization” part and Part B is the “medical” part. Together, Parts A & B make up what is currently referred to as “Original Medicare”. In 1999, Part C - Medicare Advantage Plans were added. In 2006, Part D of Medicare came into effect.
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| Q. |
What does Standardized Medigap plan mean? |
| A. |
In July of 1993, Medicare designed 10 Standardized Medigap plans. These plans – Medicare Supplements – are issued by private insurance companies. Each plan has a letter assigned – letters A through J. These first Standardized plans make it very easy to understand and to shop for by the consumer as every Plan “F” is exactly the same as any other Plan “F” (as are any other of the letters). The only difference is the premium charged by the insurance company – and that can vary greatly – sometimes over twice as much from one company as another.
There have been some variations of these original 10 plans and Medicare also created Plans K & L which are “high-deductible” plans. The Plan F and Plan J have “high-deductible” versions which work the same once the substantial deductible is met. A “Select” version of the 10 original plans could be offered as well. These “Select” plans usually offer a reduced premium compared to the Standard plan of the same letter in exchange for a restricted “select” group of hospitals and sometimes physicians as well.
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| Q. |
What is a Medicare Advantage Plan? |
| A. |
Medicare Advantage plans fall under the Part C of Medicare. Here are the different versions.
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HMO's have a network of physicians and hospitals that you must use and are the most restrictive.
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PPO's have a network, which you probably would use most of the time, but they allow you to access care outside of the network with additional costs involved.
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PFFS plans (Private Fee For Service) offer more mobility as you can use any Medicare approved Doctor or Hospital that agrees to accept the plans payments. This approval needs to be obtained prior to each use. There is no network.
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SNP's (Special Need Plans) offer unique benefits to those whose medical conditions qualify them for these plans. Conditions such as Cardio-vascular, Dementia, COPD, Diabetes and more. Dual Eligible (Medicare and Medicaid) plans are sometimes offered in this group as well.
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HSA's (Health Savings Accounts) offer benefits in a similar way but with the opportunity to fund the HAS with personal contributions as well as Medicare contributions.
With any Advantage Plan, it is the plan that determines what it will pay and what you will pay for the Medicare covered services. It may be higher or it may be lower than you would pay under Original Medicare, but you may also receive some additional benefits that you wouldn’t get with Original Medicare (i.e., dental, vision, hearing and wellness benefits). Advantage Plans can come as Medical only (MA) being similar to having Parts A & B only or they may come bundled together with Prescription Drug coverage (MA-PD)
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| Q. |
When can I sign up for a Medicare Advantage Plan? |
| A. |
Each year during the Annual Election Period, November 15 to December 31st, you can choose to begin enrollment in one of these plans or choose to switch plans. You can also sign up during your Initial Election Period if you are new to Medicare or because of a Special Enrollment Period. It is wise to consult a health plan advisor who can review your options each year as the Medicare Advantage Plans are annual plans and can change dramatically in coverage and cost.
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| Q. |
I don’t take medications; do I have to have a Part D prescription drug plan? |
| A. |
You don’t have to buy a Part D plan, it is an option. But, remember medication needs can change quickly. So, you might want a low cost plan to provide basic protection. There is also a financial penalty for not signing up when you are first eligible. If you buy later, Medicare can impose a one percent penalty for every month you didn’t enroll. If you have VA and employer group plans that qualify as “creditable coverage”, this penalty will most likely not be assessed.
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| Disability and Medical Coverage
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| Q. |
I have been on Social Secuirty Disability for just over 2 years now, what are my options for Medicare? |
| A. |
After 25 months of Social Security Disability, you automatically qualify for Medicare and will receive your Medicare card. You then have a time of guaranteed issue into a supplement plan if they are offered in your state (some states require them to be offered). You will also be able to enroll in a Prescription Drug Plan during this Special Enrollment Period. Or instead, you can choose to enroll into a Medicare Advantage Plan.
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| Q. |
I’ve been on Medicare for several years, but never got any additional insurance. Now I’m turning 65 shortly. What are my options? |
| A. |
Everyone has an Initial Election Period (IEP) when they have both Part B and are 65 years of age. This IEP lasts for 8 months (check with an advisor as to the exact time frame). During this IEP, whether or not you were covered by Medicare prior to being age 65, you have the right to guaranteed issue of any Medicare Supplement policy offered by any company in your state. The rates for this Supplement would be their best rates offered with no considerations for health conditions. You will also be able to enroll in a Prescription Drug Plan in the first two months. Or you may choose to opt out of Original Medicare and enroll in a Medicare Advantage Plan with or without prescription drug coverage included.
If you opt not to enroll in this IEP then you may still enroll in a Supplement plan at any time, subject to medical underwriting. But the drug plans or Advantage plans would only be available for enrollment in the Annual Election Period beginning November 15 and ending December 31st. The Advantage plans could also be available from January 1 through March 31st, but not the drug plans.
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| Loosing Employer Benefits
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| Q. |
I have been covered by an employer group health plan (EGHP), union plan, teachers plan, etc. for a number of years and now it is ending. What are my options? |
| A. |
One important point here is whether the “ending” is voluntary or involuntary. In some states it won’t matter, but in others it will be the difference in getting a Special Enrollment Period (SEP) with guaranteed issue for certain Supplement Plans or being subject to medical underwriting for any Supplement plan because it ended voluntarily. Coming off COBRA can have some serious issues you may not want to deal with that pertain to Supplement plans. It is best to speak with an advisor if you are considering taking COBRA.
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