Are you just starting out with Medicare? If so, you are in the right place. This guide to Medicare was put together with you in mind. We’ll cover everything you need to know about Medicare.
- 1 Ready to Learn about Medicare?
- 1.1 Section 1: Getting Organized
- 1.2 Section 2: Understanding Medicare
- 1.2.1 Eligibility for Medicare
- 1.2.2 Medicare Basics
- 1.2.3 The Four Parts of Medicare
- 1.2.4 What Medicare Doesn’t Cover
- 1.2.5 Costs for Medicare
- 1.2.6 Your Medicare Cost-Sharing
- 1.3 Section 3: Healthcare Choices
- 1.4 Section 4: Billing and Claims
- 1.5 Section 5: How-to Guides
- 1.5.1 How to Sign Up for Medicare
- 1.5.2 How to Enroll in Medicare Late
- 1.5.3 How to Transition from COBRA to Medicare after 65
- 1.5.4 How to Enroll in Medigap
- 1.5.5 How to Enroll in Medicare Advantage
- 1.5.6 How to Choose a Medicare Part D Drug Plan
- 1.6 Section 6: Glossary of Terms
- 1.7 Get Help from Our Medicare Experts
Ready to Learn about Medicare?
Let’s dive in!
Section 1: Getting Organized
When you are approaching Medicare age-in at 65, it’s normal to feel uncertain. Some people even dread the process of making their Medicare decisions. It’s true – there is a lot to learn. However, the tips in this guide to Medicare will prepare you for everything you need to know.
If possible, we suggest digging into this guide about four to six months prior to turning 65. Give yourself time to research, learn and absorb information. This will make things less intimidating because you won’t feel rushed. It’s been our experience that the earlier people start, the more confident they feel about their choices in the end.
Before we get to the good stuff, let’s first get a high-level overview of the steps you’ll be taking along the way. We’ll also give you a few tips for getting organized which will ultimately lead to your coverage decisions.
Here are the main steps you’ll be taking on your Medicare journey:
- Learning about the parts, coverage, and costs of Medicare
- Finding out when you can or should enroll in Medicare. Much of this depends on whether you have access to any other coverage or if Medicare will be your primary insurance
- Enrolling in Part A, Part B or both
- Choosing how you will get your Medicare
- Deciding on supplemental coverage
- Applying for supplemental coverage
Once your coverage is in force, you’ll also be reviewing your choices every year and making changes as necessary.
Some Things You’ll Need
To estimate your costs for Medicare, you’ll need your tax return from two years ago. Some of your Medicare premiums are based on your household gross income in that year. We’ve created this Medicare Costs Worksheet for you to use in planning your estimated Medicare expenses.
When it comes time to choose your drug coverage, you will also need a list of your current prescription medications. Be sure to write down the frequency and dosage of each medication. You’ll also need to know whether you take the generic or brand name version of each drug. The easiest way to do this correctly is to write down the name of the medication that appears on each prescription label.
Throughout the following sections, we’ll provide links to additional reading and resources too. You can visit these to increase your knowledge on these topics. Be sure to follow through and investigate these so that you can get the most out of this guide to Medicare.
Section 2: Understanding Medicare
Medicare is a federal health insurance program for people aged 65 and older and people with certain disabilities that perhaps prevent them from being able to work and have access to employer coverage.
Medicare is different from Medicaid, which provides health insurance for people with low incomes. Some people may even qualify for both, but for the purposes of this guide, we’ll be discussing Medicare as our primary subject.
Eligibility for Medicare
To be eligible for Medicare, you must be a U.S. citizen or permanent resident who has lived here in the USA for at least 5 consecutive years.
You can qualify for Medicare based on age or disability.
If you are aging in, you will be eligible for Medicare at 65 regardless of whether you are taking Social Security retirement income benefits yet.
To qualify earlier due to a disability, you must be over the age of 18 but under the age of 65.
You must also meet one of the following criteria:
- Have reached your 24th month of Social Security Disability Income benefits
- Have been diagnosed with Amyotrophic Lateral Sclerosis, also called Lou Gehrig’s Disease and also have begun receiving Social Security disability. The 24-month waiting period does not apply to people with ALS, who are usually eligible for Medicare just 6 months after being awarded Social Security Disability benefits
- Have been diagnosed with End Stage Renal Disease and have either been on dialysis for at least 3 months or have had a kidney transplant
It’s important to note that not everyone enrolls in Medicare right as soon as they are eligible. For example, many people work well past age 65 these days and may have access to employer coverage. Veterans may choose to forego Medicare benefits and rely just on their VA coverage.
There are a number of reasons why people might delay enrollment, and we’ll discuss later in this article how in some situations you can delay Medicare without penalty.
Many people feel discouraged when they first start researching their Medicare options. Often, we find that much of the confusion comes from trying to read too many mail solicitations or talking to telemarketers, which is putting the cart before the horse.
Before you ever get to any of your Medicare supplemental choices, the key to understanding Medicare starts with first learning the Parts of Medicare itself. This is the very first thing you need to master, so that’s where we’ll start.
Be aware that Medicare has premiums that an individual must pay for Parts B and D, and then the beneficiary also has cost-sharing when using the coverage, such as deductibles, copays, and coinsurance.
The Four Parts of Medicare
When Medicare was created back in the 1960’s, the old Blue Cross and Blue Shield style of coverage was very popular. One part covered hospital benefits, and the other part covered outpatient benefits.
While the rest of the insurance market has evolved, Medicare still separates coverage into hospital and outpatient services. For this reason, when taken together, we call these two parts Original Medicare.
Medicare Part A
Medicare Part A is hospital coverage and includes inpatient hospital stays, skilled nursing care, blood transfusions, home health services in the hospital, and hospice benefits. We often tell our clients to think of this as your room and board in the hospital. It will provide for three square meals a day, a couple of nurses who come around to check on you, and a comfortable bed in a semi-private room.
Something that many people don’t realize, however, is that there are some services which might occur in a hospital that do not fall under Part A. For example, surgeries fall under Part B because they are performed by physicians.
So, if you’ve been wondering whether you can get by with just Part A, let us stress that if Medicare is your primary coverage, you truly need both parts of Original Medicare to be adequately covered.
Let’s look at what else is covered by Part B.
Medicare Part B
Part B is outpatient medical coverage. This includes lots of things that you would ordinarily think of as outpatient services: doctor visits, equipment, lab-work, durable medical equipment, diabetic supplies, diagnostic tests, home healthcare, ambulance rides and many other services.
However, Part B also covers things like surgery, chemotherapy, and radiation, which may be performed in a hospital.
Preventive care is another important Part B benefit. Medicare’s preventive care benefits are extensive. It provides a one-time Welcome-to-Medicare physical during the first year of Medicare. It then covers annual check-ups, well-woman exams, annual vaccines, screenings for cancer, diabetes, cardiovascular disease, glaucoma, obesity, depression and several other conditions. Some preventive care benefits have criteria or requirements. You can learn more here.
Together these two parts of Original Medicare cover most healthcare services which are medically necessary.
For many years, these were the only two parts of Medicare. However, in recent years Medicare has expanded to offer private coverage options and also prescription drugs.
Medicare Part C
In the 1990’s, the Balanced Budget Act created Part C of Medicare, which is also called the Medicare Advantage program. Part C provides an option for you to get all of the same Medicare Part A and B benefits but through a private insurance company.
When a beneficiary enrolls in a Medicare Part C plan, he or she will get their healthcare services usually through a network or of providers operated by the private insurance company.
We’ll cover Medicare Part C in detail in Section 3 about your Healthcare Options.
Medicare Part D
For over 40 years, Medicare beneficiaries did not have coverage under Medicare for retail outpatient prescription drugs. In 2003, however, the Medicare Modernization Act created Medicare Part D, which was rolled out to all beneficiaries in May of 2006.
Part D provides access to prescription medications at significantly lower prices than the retail rate of the medications. Think of Part D as a pharmacy card which will allow you to pick up your prescriptions at your local pharmacy and just pay a copay.
While Part D is voluntary it’s very important that you enroll unless you have access to other drug coverage. Outside of your initial enrollment period and a few special circumstances, you will have a limited annual opportunity to enroll in a Part D drug plan.
Should you fall ill during the year and be prescribed a new and expensive brand-name medication, you would face paying full price for that medication until the next Annual Election Period for Part D which occurs each year in the all.
Part D provides better pricing for current medications while also providing coverage for any new and important medications that may come up unexpectedly in the future. Unless you can afford to pay for all of your medications out of pocket, Part D is an important piece of your overall coverage.
Learn more about the Parts of Medicare in this short video:
What Medicare Doesn’t Cover
So now that we’ve discussed the services that Medicare does cover, let’s look briefly at some of the things that Medicare doesn’t cover. These are items that you should be prepared to pay out of pocket.
- Acupuncture, acupressure, and other homeopathic treatments
- Routine vision care, eye exams, and eyeglasses
- Routine dental care and dentures
- Foot care that is not related to other medical conditions
- Hearing aids and routine hearing tests
- Cosmetic surgery
- Custodial care (help with activities of daily living)
- Long-term care
This last one sometimes comes as a surprise to people. While Medicare Part A does provide for short-term care in a Skilled Nursing Facility, this care is designed to help a person recover from a stroke or an injury or surgery. Medicare only provides for up to 100 consecutive days in a Skilled Nursing Facility.
If an individual has reached a point of declining health and is not expected to recover to a degree where he or she can once again live independently, then that individual or his family must make arrangements for long-term care in a nursing home or assisted living facility.
These costs are not covered by Medicare and must be funded by private pay or by qualifying for Medicaid.
Costs for Medicare
Just like any other health insurance coverage, Medicare has both premiums you pay for the coverage, and cost-sharing when you access healthcare services.
Premiums for Part A
Medicare Part A costs nothing for most people. If you have worked for at least 40 quarters (10 years) in the United States and have paid FICA taxes during that time, you have already pre-paid for your hospital benefits.
Some people may not have enough work history to qualify for premium-free Part A because their employers did not deduct FICA taxes. We see this often with teachers. These individuals can still qualify for premium-free Part A if they are married to someone who did work the necessary quarters.
If all else fails, you can purchase Part A. In 2018, it runs over $400/month, although if you worked more than 30 quarters, you can pay a pro-rated premium.
Premiums for Part B
Medicare Part B premiums are based on your income. The standard Part B premium in 2018 is $134/month. About 95% of all Medicare beneficiaries pay this rate.
A small percentage of Medicare beneficiaries pay more for Medicare Part B because they earn a higher income. These individuals will pay an “Income-Related Monthly Adjustment Amount” for both Parts B and D. In other words, people who earn more will pay more for their Medicare.
Individuals who earn more than $85,000 per year or married couples who earn more than $170,000 will pay more for Part B based on their modified, adjusted household gross income. These premiums are based on a sliding scale. The more you earn, the higher your premiums will be. People in the highest bracket pay $428. 60/month for Part B.
You can visit the Medicare website to find a premiums chart so that you can calculate your personal expected premiums for Part B at www.medicare.gov.
Although Medicare may calculate your premiums based on a joint tax return if you are married, everyone pays their premiums individually.
Part B premiums are deducted monthly from their social security checks or billed quarterly if someone is not yet taking Social Security income benefits.
Premiums for Part D
Medicare Part D rates are set by the insurance carriers who offer them. In most states, there are a dozen or more Part D insurance plans to choose from. These may range from plans as low as $20/month to some that are over $150/month, depending on the carrier, plan, coverage and drug formulary.
As with Part B, people with higher incomes pay more for Part D. This can add as much as $74.80/month on top of your base Part D premium in 2018.
Your Medicare Cost-Sharing
When you begin to use your benefits, you will have deductibles, copays and coinsurance to pay on Medicare Parts A, B and D. These amounts are adjusted by Medicare each year.
For example, in 2018, your Part A deductible is $1340, and you also begin incurring daily copays if your hospital stay lasts more than 60 consecutive days, or if a Skilled Nursing Facility stay lasts more than 20 days.
Your Part B deductible is $183 annually, and then Medicare pays 80%. You are responsible for the other 20%, with no cap. As you can imagine, this could be financially devastating in the event of an expensive heart surgery or a long or chronic illness.
This is why most Medicare beneficiaries buy additional coverage: to fill in these gaps. We’ll explore your options for additional coverage next.
Section 3: Healthcare Choices
Covering the Gaps
There are a number of ways that people can cover the gaps in Medicare. These include employer coverage such as group health insurance from a company where you are actively working, or retiree coverage from a former employer.
There are also government options such as Federal Employee Health Benefits, Tricare and Veterans Administration.
Lastly, for everyone else, there are two main types of additional coverage: Medicare Supplement plans, also known as Medigap policies, and Medicare Advantage plans, which falls under Part C of Medicare.
People who are still working can have Medicare coordinate with their employer group health insurance. If the employer has more than 20 employees, their group plan is primary, and Medicare is secondary. Many people in this scenario enroll in Part A since it costs nothing, but they delay Parts B and D to save on premiums.
Their employer coverage already includes outpatient and drug coverage, so they don’t need to duplicate that coverage with Medicare unless they really want to. There is no penalty to delay, and you’ll be given a special election period when you retire to add these two parts.
If the employer has less than 20 employees, then Medicare is primary, and you should enroll in both Parts A and B as soon you are eligible to make sure you are covered appropriately and to avoid late enrollment penalties for Medicare.
Retiree coverage works the same way: Medicare is primary, group coverage is secondary.
You can learn more about Medicare and Employer Coverage here.
Government Healthcare Options
People with FEHB or VA can decide for themselves whether they also wish to enroll in Medicare. We recommend that you do so that you have robust coverage and for veterans, the ability to treat with civilian providers if necessary. However, it is up to you.
Visit these pages for more information:
Individuals with Tricare should enroll in both Medicare Parts A and B because Medicare will be primary. Tricare will function as your secondary coverage.
Medicare Supplements (Medigap plans)
Medicare supplement plans have been around since Medicare was first created back in 1965. These policies pay after Medicare processes the claim and pays its share. Medicare will then forward the remainder of the invoice to your Medicare supplement insurance carrier, so it can pay its share.
There are 10 standardized Medigap plans to choose from and these plans are offered by dozens of insurance companies across the nation.
When you choose a Medigap plan for your supplemental coverage, you are still enrolled in Original Medicare Parts A and B as your primary insurance. You can see any healthcare provider who accepts Medicare, regardless of which Medigap company you enrolled with.
Most providers accept Medicare assigned rates, but some providers may charge a balance bill of 15% more than the invoice. This is called an excess charge, and certain Medigap plans like Plans F and G cover this for you.
What’s great about Medigap plans is that your back-end expenses are very predictable. For example, if you enroll in a Medigap Plan G, your only out-of-pocket expense besides your premiums is a once-annual Part B deductible. You won’t have any copays for your Part A and B medical services.
Freedom to Choose Your Own Provider
Medicare supplements offer you the greatest freedom of access. There are almost 900,000 providers who accept Medicare in the United States, so this is the biggest network of providers you will have ever had access to in your lifetime.
Because these plans have such comprehensive coverage, the premiums for Medigap plans are higher than Medicare Advantage plans. Rates vary by region, gender, tobacco usage and several other factors.
Keep in mind the Medigap plans do not include outpatient drug coverage. Beneficiaries with Medicare and a Medigap policy can add Part D coverage via a standalone drug plan.
Part C Medicare Advantage Plans
Medicare Advantage plans are private health insurance plans. The monthly premiums are often lower than Medigap plans because you are agreeing to use the plan’s network, which will be considerably smaller than Medicare’s nationwide network.
Most plans have either an HMO or PPO network of providers in your local area. Some networks may only include a few counties while others might be statewide.
Medicare HMO plans often require that you designate a primary care doctor. That doctor must set up a referral for you if you need to see a specialist. Since this is the most restrictive type of network, HMO plans often have lower premiums than PPO plans where you have the option to treat outside the network at a higher cost.
Many Medicare Advantage plans include a built-in Part D drug plan. Some plans may also include extra incentives like routine vision, dental and hearing benefits or gym memberships. Keep in mind that benefits on Medicare Advantage plans change every year, and these can be changed or taken away from year to year.
To be eligible to enroll in a Part C plan, you must:
- Live in the plan’s service area
- Be enrolled in both Parts A and B.
- Be able to answer no to the one health question on MAPD applications, which asks about End Stage Renal Disease.
When considering whether to enroll in a Medicare Advantage plan, it’s important to check with your doctors to see if they participate in the plan’s network. You should also carefully check the plans’ drug formulary to be sure it includes all of your necessary prescription drugs.
Section 4: Billing and Claims
Medicare processes claims as they are received and sends out a Medicare Summary Notice to you quarterly. You should carefully review these to make sure they are accurate and to help prevent Medicare fraud.
If you have a Medigap policy, Medicare will automatically
forward your bills to your insurance company after it first pays it share. You do not have to submit your own claims. After both Medicare and your supplement have paid, if there is any leftover amount that you owe, your provider will bill you for the remainder.
Review these for accuracy on a regular basis. If you receive a bill in the mail and you are not sure if it truly owed, you should contact your agent or the insurance company to question why it was not covered.
Here at our agency, we have a service team that handles these for our clients. If you purchase your Medigap or Medicare Advantage policy through our agency and you receive any bill at all in the mail, you just fax or email it to us and we do all the research for you to let you know whether the bill is valid and if you should pay it. Many times we discover these bills are NOT actually owed, so you should never just pay the bill without checking in with us first.
Online Claims Management
Medicare offers a portal to all beneficiaries that you can use to track your claims and keep up with your expenses. This portal can be found at mymedicare.gov. Registration is easy and will let you see your claims in real time instead of waiting for that quarterly Medicare Summary Notice to be processed and mailed to you.
Section 5: How-to Guides
This section includes quick how-to guides for a variety of common Medicare enrollment scenarios.
How to Sign Up for Medicare
You can apply for Medicare via the Social Security office. This can be done in-person, online or by phone. Applying online is by far the easiest and fastest way to apply.
Visit this link to apply: https://www.ssa.gov/benefits/medicare/
The Medicare Initial Enrollment Period (IEP) is the first time during which you can enroll in Medicare.
This enrollment period lasts for 7 months. It begins three months before the month of your 65th birthday. It ends 3 months after your birthday month. Applying during this window of time ensures that there is no late penalty.
For example, if you turn 65 on June 18th, your Medicare IEP would run from March 1st to September 30th.
During the IEP, you can enroll in Original Medicare (Part A and Part B), a Part D drug plan and/ or a Medicare Advantage plan.
If you enroll in Original Medicare, you may want additional coverage with a Medicare Supplement Plan (Medigap). For this, you will use your Medicare Supplement Open Enrollment Period.
How to Enroll in Medicare Late
Special Election Period
If you had employer group health coverage when you turned 65 and you delayed your enrollment into Parts A, B or D, you can enroll in Medicare later on using a Special Election Period (SEP).
A SEP gives you 8 months to enroll in Medicare Part B although most people enroll in it immediately so that there is no gap in coverage. You will also have a shorter SEP of 63 days to add Part D. If you enroll during a SEP and you had creditable coverage prior to this, you will face no late penalties for Parts B or D.
Special Election Periods are created by other circumstances as well, such as losing access to VA benefits. It’s always a good idea to work with a licensed Medicare insurance broker who can guide you through any special election period opportunities that may exist.
General Enrollment Period
If you were unaware of the Initial Enrollment Period and completely missed enrolling in Medicare altogether with no creditable coverage, you can use the General Enrollment Period (GEP) to enroll in Medicare. This period occurs annually from January 1 to March 31.
Enrolling late using the GEP generally results in you owing a late penalty for Part B. Once you enroll, your benefits also will not begin until July 1. This can be truly devastating if there is a gap in coverage like this while treating for a serious health condition.
This is a time when someone who failed to enroll in Medicare earlier can enroll. Benefits begin July 1st so there may be a gap in coverage. People who enroll during the GEP also often owe Part B late enrollment penalties because they missed their IEP.
Annual Election Period
Every year there is an annual election period that occurs between October 15th – December 7th. Medicare recipients can use this election period to enroll in, change, or disenroll from a Medicare Part D plan or a Medicare Advantage plans. If you enroll in new coverage during this period, your new coverage will begin on January 1st.
If you are using the AEP to join a prescription drug plan for the first time and you have not had other creditable drug coverage since you turned 65, then you will be subject to Part D late penalty. While Part D is voluntary, if you wait to enroll, you will pay a late penalty for as long as you are enrolled in Part D going forward.
This late penalty is equal to 1% of the national average Part D premium, cumulative, for every month that you waited to enroll. For example, enrolling one-year late will result in a 12% penalty being assessed against you when you finally do enroll.
The AEP Does Not Apply to Medigap
Remember that the AEP is not a period that you can use to enroll in a Medigap plan and skip the health questions. The AEP does not pertain to Medigap policies.
Why is this so important?
Because if you enroll in just Original Medicare or in a Medicare Advantage plan and you decide later on that you want to switch to the more comprehensive Medicare supplement plan, you will have to answer health questions and pass underwriting to be approved for that supplement
plan. It’s possible that you may not be able to get Medigap coverage at that point because of health conditions that could disqualify you from coverage.
Again, working with an insurance agent or broker that understands all these rules, election periods and timelines will help you to determine which types of coverage you are eligible for.
How to Transition from COBRA to Medicare after 65
Sometimes a person over age 65 will finally retire and decide to enroll in COBRA benefits after they leave their employer coverage instead of enrolling in Medicare right away. This often happens when people are uninformed about Medicare and unnecessarily fearful of it.
Be aware that COBRA benefits are not creditable coverage for Part B. That means that when your active working insurance ends, your 8-month window to use a Special Election Period to enroll in Part B begins. The clock is ticking, and you must enroll in Part B by the 8th month after your last day of active working coverage even though COBRA benefits likely already include outpatient coverage.
We have seen many people over the years who worked past age 65 and then later retired and elected COBRA instead of Medicare. Because they are unaware of the 8-month Special Election Period, they stay on COBRA insurance for the allowed 18 months and then when they go to apply for Medicare, they find out their Special Election Period ended 10 months earlier.
This is truly awful because now they must wait for the next General Enrollment Period to enroll in Part B. They will be assessed a penalty of 10% per year for every year they failed to enroll in Part B, and even worse, their Part B coverage won’t begin until the July following their GEP application for Medicare. This can leave you without coverage for many months, depending on when your COBRA benefits ran out.
Not having Part B results in you not having any benefits for outpatient services. Imagine if you needed surgery. You would foot nearly all of that bill.
Lastly, if you are already on COBRA when you turn 65, you need to use your Initial Enrollment Period to elect Part B. This means you need to enroll in Part B no later than the third month after your 65th birthday even if you keep your COBRA benefits.
How to Enroll in Medigap
When you enroll in Part B for the first time, you will trigger a 6-month window called your Medicare Supplement Open Enrollment Period. This is your one opportunity to join any Medicare supplement with no health questions asked:
- You cannot be turned down for any Medicare supplement plan during this time, regardless of your health status.
- The insurance company you choose also cannot charge you a higher monthly premium because of any health conditions
- Your coverage cannot preclude treatment for pre-existing health conditions
Once this window has passed, you will need to answer health questions to enroll in a Medigap plan and you could be turned down based on your answers to these questions and your medical record.
You also CANNOT use the Annual Election Period in the fall to enroll in a Medigap plan without health questions. This is a common misconception. The AEP is an annual window for changing your Part D drug plan or Medicare Advantage plan. It does not have anything to do with Medigap enrollment.
How to Enroll in Medicare Advantage
You can enroll in a Medicare Advantage Plan during your Initial Enrollment Period, during a Special Election Period (such as leaving employer group coverage) or during any Annual Election Period.
It’s important that you check with your doctors to find out if they participate in the plan’s network. Remember that most Medicare Advantage plans operated coordinated care networks of providers. These might be HMO plans, Point of Service Plans, PPO plans or Special Needs Plans.
Once you enroll in a Medicare Advantage plan, you are locked in for the rest of the calendar year. It’s very important to verify with your doctors that they participate in the network for any plan you are considering. The plan itself will also have an online directory where you can also search for participating providers.
Once you have identified plans that your doctor works with, you should review the plan’s Summary of Benefits (SOB) and Prescriptions Drug Formulary. The SOB will list all of the covered services and what you’ll pay for them. You may have a deductible up front that you must satisfy. There are likely copays for most other services that you will pay at the time of treatment too.
Make sure you are okay with these cost-sharing responsibilities. Then check to make sure the formulary includes all of your important medications. (IF your Medicare Advantage plan includes Part D coverage – not all of them do).
Once you find a plan you like, contact an insurance broker like Boomer Benefits. We can help you with your enrollment so that if there are any hiccups on the back end, you have an agent to go to bat for you. You’ll have our help to resolve problems instead of having to handle it by yourself.
How to Choose a Medicare Part D Drug Plan
The best way to shop for the most suitable coverage is to use the Plan Finder Tool on the Medicare website. Follow these steps:
- Take the list of your medications that you created in the Getting Organized steps (Section 1)
- Go to the Plan Finder and enter your Zip Code
- Enter your medications into the Plan Finder to search for drug plans in your state. Please note that the Plan Finder will allow you to search for both Standalone Part D drug plans and/or Medicare Advantage plans that include Part D
- Enter your preferred pharmacies
- Review Medicare’s list of results. Medicare ranks them in order from the most cost-effective for you to the least cost-effective based on your specific medications.
- Look carefully at the details of the top 3 plans. Are there any restrictions for any of your medications such as quantity limits or prior authorization requirements? Consider this when choosing your plan.
Consider ANNUAL Spending, Not Just Premiums
It’s important to realize that choosing drug coverage is not about choosing the plan with the lowest monthly premiums. Medicare’s tool will crunch ALL of the numbers. This includes monthly premiums, deductibles, and copays that you might spend on your specific medications throughout the entire year. It will also use your preferred pharmacy as part of the criteria if you enter a preferred pharmacy.
Medicare lists plans tarting with the lowest annual out-of-pocket for your total drug plan spending at the pharmacies you indicated.
You can enroll on Medicare’s website during any valid election period. However, remember that if you enroll directly with Medicare, you will have no agent to help you. If you run into any drug exceptions or problems, you’ll be on your own figuring those issues out.
(If you apply for your Medigap or Medicare Advantage coverage through our agency, we run this analysis for you at no cost to help you find the right plan.)
Section 6: Glossary of Terms
No guide to Medicare would be complete without a glossary of definitions for all these confusing terms. After all, this is the first time you’ll ever enroll in a national health insurance program. Medicare’s language and terminology include words and phrases you may not be familiar with.
Here are some of the ones that you’ll need to know:
Medicare Part A coverage is measured in benefit periods. A benefit period begins on the first day you enter the hospital and ends 60 consecutive days after you last day in the hospital. It’s possible to have more than one benefit period each year.
An amount that you owe that is a percentage of the cost for a healthcare service. For example, under Part B, Medicare pays 80% and you pay 20%. Your portion is called your coinsurance.
A fixed dollar amount that you pay to the provider at the time of service.
A dollar amount that you must satisfy out of pocket before your benefits begin.
Participating Medicare providers accept Medicare’s assigned rates, but some providers may choose to charge up to 15% above and beyond Medicare assignment rates. We call this an excess charge.
Foreign travel emergency
Since Medicare is a U.S. health insurance program, it does not offer you coverage outside our country. Some Medicare supplements include a foreign travel benefit. It will pay 80% of your expenses up to $50,000 after a small deductible.
A list of covered medications that is specific to each Medicare Part D drug plan
A national health insurance program for people aged 65 and older and people with certain disabilities or health conditions
A health insurance program that provides financial assistance to people with low incomes. Some people may qualify for both Medicare and Medicaid
Another name for a Medicare supplement policy
A group of healthcare providers that may include doctors, specialists, hospitals, clinics and pharmacies. Medicare Advantage plans often form networks of providers that their members must see.
Point of Service Plans
A type of HMO plan in which you can see providers who are not in-network for some covered services. Treating outside the network generally results in higher cost-sharing for you.
Healthcare that is designed to proactively keep you in good health. It involves screenings to diagnose health conditions early so that they can be treated effectively at the least expense.
Special Needs Plans
A type of Medicare Advantage plan that is designed for people with chronic illnesses. Common SNPs includes plans for people with diabetes or who have both Medicare AND Medicaid.
Get Help from Our Medicare Experts
We know that all of this is alot to absorb. Sometimes you need to hear it more than once. To get expert help, call us for a free consultation today. Our service is free, and we love to help you with your Medicare decisions.