Here’s what you should consider when picking a plan
By Deborah Jeanne Sergeant
The various “parts” of Medicare may seem confusing; however, learning a few principles about how they work can make it much easier to understand.
Medicare is for people 65 and older or those receiving disability benefits for two years or more. Most people pay about $150 per month, depending upon income. Parts A and B cover 80% of the costs for care. Part A covers hospice and hospitalizations. For nursing home care, it pays for 20 days. After that, patients owe a co-insurance of $185.50 a day up until 100 days. From day 21-100, the patient will have a co-pay.
“Once they determine skilled care is no longer needed and can be managed in the home or someone plateaus, at that point Part A ends at the nursing home,” said Brianne Barr, director of social work at Seneca Hill Manor.
Part B covers outpatient services after an annual deductible of $203 for things such as doctor’s visits, laboratory tests, x-rays, diagnostic tests, therapy and other services. It also pays toward durable medical goods.
Some eligible people also skip signing up for Medicare because they do not have chronic health issues or take prescription drugs. But they face consequences later if they sign up late. Signing up for Medicare within the period of three months before or three months after the 65th birthday is important.
“If they don’t sign up and don’t have coverage, they have to pay a penalty every month forever for each month they didn’t have Medicare,” said Bill Chamberlain managing partner of The Finger Lakes Group in Auburn, Binghamton and Elbridge.
For people still working and with health insurance through their employer, a letter stating they have coverage will waive the penalty.
“They have to provide a letter every year stating that their coverage is comparable to Medicare,” Chamberlain said.
Private insurance companies administer Part C for the government. Part C is also called a supplement plan, or Medicare Advantage, which pays what A and B do not cover. Medigap is another optional plan administered by an outside insurance company. The Advantage plans combine the benefits of A and B, and usually offer other benefits such as better medical coverage, hearing exams, vision coverage, dental cleanings, transportation and fitness benefits.
Parts A, B and sometimes C do not cover prescriptions. Part D is the prescription drug program, which is offered through a private insurance company.
“The bulk of the business we do is with Advantage plans because they take A, B and D and roll them into one plan that’s managed by a private insurance company,” Chamberlain said. “They have the ability to offer additional benefits that aren’t part of original Medicare.”
Some even cover over-the-counter medication.
“Most people look at a Medigap policy to supplement that 20% that Medicare doesn’t cover,” Chamberlain said. “It’s different from Advantage. It’s managed by a private insurance company. You show the card from that vendor and everything happens behind the scenes. With a Medigap, the claim goes to Medicare first, they pay what they pay and the claim has to go on a secondary basis to whenever pays the supplement. You have to buy a separate, D plan if you get the supplement. They don’t cover part D.”
The Part D plans vary on the cost of different medications and which medications are covered.
Chamberlain warns clients about the prescription drug “doughnut hole,” which places a greater burden upon policyholders for the cost of their prescriptions. Policyholders should carefully consider their Part D insurance coverage and look at Elderly Pharmaceutical Insurance Coverage (EPIC), a senior program that helps minimize the cost of medications for income-eligible seniors.
While going for the most expensive Advantage Plan or what someone else likes seems like the best option, Chamberlain said that’s not always best. He advises clients to carefully examine their healthcare needs to determine what plan suits them.
A Medicare expert can provide help in figuring out the best plan.
“The key to any of this is talking with someone who has knowledge of what they’re doing,” Chamberlain said. “The biggest thing is people see ads on television and don’t realize that when they call that number, it’s a salesperson and those products may not be available in New York.”
He encourages people to work with an independent agent who receives a flat amount regardless of the plan chosen, whether a basic or not. Clients pay nothing for their consultation.