Medicare is the health insurance program administered and funded by the federal government and designed for people 65 years or older. People who are under 65 that have certain disabilities, as well as people of any age with End Stage Renal Disease (ERSD), which are people that require dialysis or kidney transplant due to permanent kidney failure can also obtain Medicare.
Introduced due to the rapid rise in cost for insurance, medical services, and prescription drug costs, Medicare has become very essential to a demographic of the population that typically do not have a major source of income at an age when we become more susceptible to disease and or injuries and in need of proper medical care.
Enrolling in Medicare Part A and B:
There are 3 times in which you can enroll in Medicare.
- The Initial Enrollment Period is a 7 month period that spans before and after the month you turn 65. You can enroll in the 3 months prior to your birth month, your birth month, and the 3 months after. Depending on which months you apply, will determine when coverage will take effect in relation to your birth month. Enroll in the 3 the months prior, and coverage will begin on the first day of your birth month.If you enroll on your birth month, or any of the 3 months after, your coverage will be delayed. For example, if you enroll on the month you were born, the delay will be one month. If you enroll in the month after your birth month, the delay in coverage will be 2 months. If you enroll on the second or third month after your birth month, your coverage will be delayed for 3 months after enrollment.If your birthday happens to fall on the 1st day of a month, you would calculate your birth month as the month prior, to determine you’re enrollment time frame. This only affects those whose birthdays
- General Enrollment Period spans from January 1st through March 31st of every year, with coverage beginning on July 1st. This enrollment period can be used people that failed to sign up for Part A and/or B during their Initial Enrollment Period when they were first eligible. Keep in mind that you may have to pay a higher premium for this period as it is considered a late enrollment.
- Special Enrollment Periods are offered for people that meet certain requirements. If you enroll in Medicare during a Special Enrollment Period, coverage begins on the month after your fully completed request is received by Social Security.
Types of Medicare Coverage:
There are 4 parts to Medicare coverage: Part A, Part B, Part C, and Part D. Most people get their Medicare through Parts A and B which is administered directly by the federal government. These two parts are often referred to as Original Medicare.
- Part A Medicare is Hospital Insurance. It covers medically necessary care involving hospital care, home health care, skilled nursing care, as well as hospice care. The cost for Part A is free if you have worked for at least 10 years in which you have paid Social Security taxes during those years. Otherwise, you will pay monthly premiums for Part A coverage if you have worked and paid Social Security taxes for less than 10 years.
- Part B Medicare is Medical Insurance. It covers most medically necessary services such as doctor visits, outpatient care, preventative care, laboratory tests, x-rays, durable medical equipment, mental healthcare. It also covers some home health care and some ambulance services. Part B does involve paying a monthly premium despite work history, unlike Part A.
- Part C Medicare is often referred to as Medicare Advantage. It is not a separate benefit of Medicare, but rather provides an alternative to Original Medicare, in which private insurance companies are allowed to provide Medicare benefits. Plans offered in Part C include HMO and PPO plans.
- Part D Medicare is Prescription Drug Coverage. It is provided by private insurance companies and available to everyone that has Medicare and involves paying a monthly premium. Plans may vary in cost and which drugs will be covered within the specific plan of choice. If you choose not to purchase Part D when you first become eligible, and you don’t have any other prescription drug coverage or don’t get Extra Help, you are subject to a late enrollment penalty.
Prescription Drug Plans:
When talking about Medicare, there are 2 ways to get prescription drug coverage.
- You can get drug coverage through Medicare Part C. Medicare Advantage plans such as an HMO or PPO may offer Medicare prescription drug coverage as part of their whole plan.
- If you have Original Medicare, you can purchase add-on drug coverage (Part D), sometimes referred to as PDPs.
All Medicare Part D plans have their own list of drugs that are covered within that plan referred to as a formulary. Many of these plans apply drugs into different tiers on their formularies. The difference from one tier to the next will affect the cost of the covered drugs. Generally a lower tier drug will cost you less than one on a higher tier.
Medicare has set in place specific guidelines that Medicare drug plans must consider when making any changes to their formularies during the coverage year. When a change to the formulary is made your plan must either provide written notice at minimum 60 days prior to the date the change goes into effect. Or at the time of refill, your plan must provide written notice of the change and a 60 day supply of the drug under the same plan rules prior to the change.
Effective in December 2015, all prescribers must be enrolled in Medicare or have an “opt out” affidavit on file with Medicare, in order for your prescriptions to be covered by your Medicare drug plan.
When you have Medicare and also carry other health insurance as well, then the “coordination of benefits” rules apply to determine the order in which plan will act as the primary plan and pay first. Each plan is called a “payer” and the primary payer will be responsible to pay first up to the limits of that plan. If the cost of care exceeds the primary payer’s limit, the secondary payer will be responsible for the remaining cost within its plan.
Medigap is a Medicare Supplement Insurance policy, is administered and sold by private companies, and can help take on the cost of some of the medical services that Original Medicare doesn’t cover, including copayments, deductibles, and coinsurance.
Certain Medigap policies may also cover some services that Original Medicare doesn’t. If you have Medicare and also purchase Medigap, Medicare will pay for its share of the cost that’s covered. And then Medigap would be responsible for its share of what’s covered in its plan.
In order to purchase Medigap coverage, you must have Medicare Part A and Part B. The premium for Part B will be a separate monthly premium than the premium you will also pay for Medigap. And as long as you pay the premium for Medigap, it is guaranteed renewable and can’t be cancelled as long as you make your payments.
Also keep in mind that Medigap covers only one person.