If you have been outside lately you have notice that fall is upon us. While generally this means nice sunny days with brisk temperatures and beautiful fall colors, it also means that Medicare Open Enrollment is here!
Medicare and Medicare open enrollment tends to strike fear into the strongest of us and it shouldn’t. In this blog and the next couple of blogs I am going to tackle Medicare, how it works and what exactly is open enrollment.
Medicare is a federal health insurance program covering for the most part people who are 65 or older. There are also provisions for Medicare to cover people under the age of 65 who are on Social Security Disability (SSDI) for at least 24 months and for those with End Stage Renal Disease (ESRD) with certain requirements.
There are 4 parts to Medicare, and they are:
- Part A (original Medicare) - which covers inpatient care at a hospital, skilled nursing facility (with restrictions after a hospital stay), hospice care and home health care. Part A has a calendar year deductible and daily co-pays after 60 days in-patient care. There is no cost to Part A if you or your spouse have paid into Medicare during your working years.
- Part B (original Medicare) – which covers all other Medicare approved treatments from office visits, radiology, outpatient care (surgery), durable medical equipment and many preventative services. Part B also has a calendar year deductible after which it will cover 80% of the approved costs. There is a monthly premium for Part B that varies each year.
- Part D Prescription Drug Coverage – Part D was added in 2004 to help people pay for the prescriptions which was not part of original Medicare. This coverage is offered by private insurance carriers and has a premium for the coverage, a calendar year deductible and you are responsible for a percentage (coinsurance) of the costs of the drugs. Part D is where open enrollment comes into play from October 15th to December 7th each year.
- Part C Medicare Advantage Plans – these plans also were not part of origin Medicare and they too are offered via private insurance carriers. They include all the Part A and B benefits and in most cases Part D prescription coverage. Many of the plans also offer limited extra benefits for things such as dental, vision and gym membership. Part C also has open enrollment periods, the Annual Election Period (AED) from October 15 to December 7th and the Open enrollment period from January 1 to March 31st each year. There is a premium for the Advantage plan plus you are still responsible for the part B premium above.
Medicare Supplement (Medigap) plans – Medicare supplement plans are also offer by private insurance carriers and cover much of what Part A and B (original Medicare) do not cover. These plans are regulated by CMS and each private carrier has to offer the same coverage based on the plan you select. There is a premium for these plans and vary between the different insurance carriers.
In general, you should sign up for Medicare part A and B starting 3 months prior to your 65th birthday. If you are covered for health insurance by a company that has more than 20 full time employees, you can delay obtaining Part B coverage until you leave that insurance coverage. However, many private plans require that plan subscribers 65 and older take Medicare as their primary insurer, so check with Human Resources at your company.
As for enrolling into Part C Medicare Advantage plans, Part D prescription drugs plan and Medicare Supplements (Medigap) there are different rules depending upon when you reach age 65, enroll into Part B or leave your employers coverage.
This is a quick primer in Medicare and the different parts to it. The key is to plan early and meet with a trusted adviser who works in this market place on a regular basis. The greatest thing about turning 65 is Medicare. My clients have excellent coverage, minimal if any issues year after year and the costs compared to regular health insurance are very reasonable.