Medicare Coverage Choices
When signing up for Medicare, you have many choices available. Finding the best one for helping you manage your finances while getting all of your expenses covered can be tricky. CAP Insurance Services has provided countless clients with the timely information they needed to make an informed decision when choosing their Medicare plan. Here, we have summarized just a few of the available options, and some of the factors you will want to consider when weighing them in your decision.
Original vs. Advantage
The first decision that you will have to make, and the biggest, is whether to choose original Medicare (Parts A & B), or a Medicare Advantage plan (Part C). Both of these options have advantages and limitations. You must sign up for Medicare during your 7-month enrollment window beginning three months prior to the month in which you turn 65. The window includes that month, and the three months that follow. If you wait until after this window to enroll, you may face stiff penalties that last for as long as you have Medicare. It is wise to choose your coverage carefully the first time.
Medicare A & B
If you choose A & B, then you are asking the government to pay your expenses, as long as they are deemed medically necessary. Medicare A pays for your hospital visits and any related expenses. Medicare B pays for your doctor visits. If you see a specialist, have testing done, or incur any related expenses, Medicare Plan B will pay for it, as long as those providers are in the Medicare network. With A & B, because you have no primary care doctor, you need no referral to be seen. And thousands of doctors accept Medicare, all across the country.
Medicare A & B provide coverage that is guaranteed renewable. Although Medicare covers all expenses, both plans have a deductible, and B charges a monthly premium. Also, you may reach annual coverage limits if you are seen too many times within a calendar year. These coverage limits apply to extended hospital stays, nursing care facilities, or psychiatric hospital visits. After reaching these limits, you may incur significant coinsurance charges.
Note: Medicare A & B will not pay for your prescription drugs. For more information about Medicare Part D, refer to the section below, or to our page on Medicare Part D plans, found here.
Medicare Advantage Plans (Part C)
Medicare Advantage plans bundle the costs of hospital visits, doctor visits, testing, and prescription drugs into one health care plan. By signing up for Plan C, you are essentially asking a private health care company to manage your Medicare Plan. Such companies are excellent at negotiating rates on your behalf, and can save you significant money over the long term. However, you will be limited to the care provided by your company’s provider network, and if you go out of network, you may not be covered. You could have a primary care physician, copays for visits, and other features common to HMOs and PPOs.
As with original Medicare, you will pay a monthly premium. But instead of receiving standardized coverage, you have the opportunity to select a plan that covers the same things covered by A & B. These plans vary widely with respect to copays and coinsurance, and can include prescription drug coverage, dental care, eye care, and also additional protection for when your expenses accumulate beyond what original Medicare would pay. In other words, Medicare Plan D and Medicare Supplemental plans are not available to Medicare Advantage Plan holders, because when you choose your Medicare Advantage Plan, you can opt to include these services.
Selecting a Medicare Advantage Plan involves a careful examination of all features of each respective plan, and estimating the cost that you will likely incur when using those features. If you have prescriptions, you will want to choose a plan that covers all of your medication. And of course, if you want a specific doctor, you will want to make sure that your doctor is within your plan’s provider network.
As with Medicare A & B, you have a seven-month window to enroll. Also, every year in October, each Advantage Plan company updates their plans for the following year, giving you a two-month window to select a new Advantage plan for the coming year. It is critical to making sure you research each plan at the end of each year to learn what the new plans have to offer.
Medicare Advantage Plans also offer a disenrollment period, from January 1st to February 14th. During this time, if you are unhappy with your Medicare Advantage plan, you can disenroll from it and return to Medicare Plans A & B, and even choose Plan D for drug coverage and supplement plans. However, you may face penalties if certain criteria are not met. You could also face underwriting, which takes into account your pre-existing conditions when charging premiums.
Medicare Plan D
Medicare Plan D is an optional prescription drug plan available to anyone who is enrolled in Medicare A & B. Because A & B do not pay for prescription drugs, it is imperative that you enroll if you want coverage for medication. The enrollment window for Plan D is the same 7-month window as for Medicare A, B, and C. But if you do not sign up for coverage within this window, you will likely face a 10% penalty for each year you wait to sign up after the window closes.
Plan D is offered by private insurance companies. Each has several different products, and each plan has a formulary which lists all of the drugs that the plan covers. When selecting a plan, it is very important for you to read these formularies carefully to make sure that all of your drugs are covered, and to see how each formulary rates them. If a certain formulary lists some of your drugs on a very high tier, then you may pay a high price for coverage if you choose that plan.
Like Plan C, Plan D is an annual plan that updates every October. From October 15th through December 7th, you have the option of switching to a different Plan D, even if it’s with a different company. You can also drop coverage, or start coverage. Plan D also has special enrollment, which enables you to switch coverage within a certain window after moving to a new county, entering a long-term care facility, or if you lose access to creditable coverage for prescriptions.
Numerous factors determine which plan is most cost effective. Some have very low premiums, but it is crucial to know what your copays are. Most plans have an annual deductible, and annual coverage limits. If you exceed your coverage limits, you may find yourself paying a high co-insurance for your medication as the year progresses. This period after a coverage limit has been reached is called the “donut hole”, and it too has a ceiling, which is followed by a period where your plan kicks in again, paying a high percentage of your drug costs. Each year in January this cycle begins again with your new plan, starting with a new deductible.
Medicare Supplemental Insurance Plans
Medicare A & B often have coverage limits for extended hospitalization, mental health services, long-term care, or other services. Beyond these limits, the costs of such care can skyrocket. For this reason, those enrolled in Medicare A & B may also enroll in a Medicare Supplemental plan to supplement their coverage. Your Medicare Supplemental plan will cover you during situations where your A and B plans will not.
Medicare Supplemental policies are provided by private insurance companies. Any doctor that accepts Medicare must also accept any Medicare Supplemental plan, no matter which company you have it with. This means that you can travel anywhere in the country and still be covered.
Although Medicare Supplemental insurance carriers raise their rates from time to time, they do so based on a formula that accounts for the entire group. This formula measures the total premium coming in and the total monies paid out for claims. However, no Medicare Supplemental provider can raise your rates based on your pre-existing conditions.
And no company can cancel your plan. It renews automatically every month, as long as you make your payments. However, if you lapse and are dropped, or if you switch coverage plans or companies, then you may have to go through the underwriting process to get approved. This is true if you sign up for a supplement plan after the initial enrollment period, so it is important to know which Medicare Supplemental coverage you want when you sign up for Medicare. If you sign up through a broker, they can find you the best possible rate, helping you avoid high premiums.
CAP Insurance Services gets you Covered
Seniors face a wide array of choices when they sign up for Medicare. The process requires an in-depth study of the nuances of each plan, which takes countless hours. However, with CAP Insurance Services, you can feel confident that you have made the best possible choice. We pour over the details of all types of Medicare plan coverage so you don’t have to. We guide you to the best plan for you, and give you the confidence that you will need when facing life’s challenges.
Remember: Too many choices is a good thing! Call us today to help you get started on the process of finding the best coverage for you. Seven months can go by quickly. But if you are prepared, you will come through this process with peace of mind, knowing that you will have the best health coverage throughout your golden years.