New to Medicare?While it may seem impossible to ever understand Medicare, with so many different plans and its unique terminology, in our Medicare 101 section we have broken down the different parts of Medicare to make it much simpler for you to understand.
Roughly 10,000 Baby Boomers turn 65 every day.
Assuming you are like most of them, you are used to receiving your healthcare through your employer and it was pretty straight forward. Trying to comprehend the overcomplicated Medicare system can be unpleasant to say the least.
While it may seem impossible to ever understand Medicare, with so many different plans and its unique terminology, in our Medicare 101 section we have broken down the different parts of Medicare to make it much simpler for you to understand.
First, Medicare has 4 PARTS -not PLANS. Say it again, PARTS not PLANS.
Let’s begin by looking at each other individually.
Medicare Part A
Medicare Part A is the Hospital Coverage portion of Original Medicare. If you, or your spouse, worked and paid Social Security taxes for at least 10 years (or 40 quarters), Part A is offered at no additional cost. It helps cover hospital expenses from an inpatient stay, including a semi-private hospital room for hospital stays, skilled nursing facilities, hospice care, and home healthcare.
Room & Board
In simple terms, Part A is your Room & Board. It helps with paying for your semi-private room, meals, and medical services during a hospital stay.
Part A is NOT full coverage.
It is important to note that Part A does not cover your hospital stay at 100%. There is a recurring deductible, as well as daily copay amounts that you will be responsible for during the year. The Centers for Medicare Services (CMS) determines these amounts each year.
What about those services that may take place IN the hospital but occur while you are not admitted as a patient?
Medicare Part B
Medicare Part B is the second half of Original Medicare, and it covers medically necessary and some preventative Outpatient services. This includes doctor’s visits, outpatient surgery, Emergency Room care (including ambulance, if necessary), lab work and radiology, durable medical equipment, mental health treatment and Physical/Speech/Occupational Therapy. It also covers some Preventative Services, such as: Annual Wellness visit and Welcome to Medicare visit, diabetes screening, diagnostic testing like mammograms or colonoscopies, and flu shots. Part B can help with some medications as well, but coverage is limited to those provided in a medical setting, like infused drugs, antigens, or chemotherapy and dialysis medications.
Unlike Part A, Medicare Part B is not free. There is a monthly premium, and this premium can be adjusted if you are considered a high-income earner.
Isn’t it optional?
Technically Part B IS optional. This is because most people work beyond retirement age and have creditable coverage through their employer. However, if Medicare is your primary source of insurance coverage or your employer has less than 20 employees, Part B is an EXTREMELY IMPORTANT component of your insurance coverage.
Part B is NOT full coverage either.
Just like Part A, Medicare Part B will not cover your medical bills at 100%. There is an Annual Deductible that CMS announces each year, as well as a 20% coinsurance. The only exception is for covered preventative services, but it is important to note that Medicare has very strict policies on when and how often one can receive certain preventative services.
Always check with Medicare prior to any preventative service that you expect to be covered at 100% just to be on the safe side.
Another out of pocket expense may arise if you choose to go to a doctor that does not accept Medicare Assignment. This is rare among Primary Care Physicians and only slightly more common with Specialist Practices or Centers of Excellence, such as John Hopkins and Mayo Clinic. The Federal government puts a cap on the fee these providers can charge Medicare beneficiaries at 15% above the Medicare allowed amount, regardless if they have accepted Medicare’s assignment or not. It is important to always double check that your provider does accept Medicare Assignment, so you are not surprised by any medical bills.
What ISN’T covered?
Part B encompasses a lot of services. So, what isn’t covered? In general, Part B does not cover anything that is not REASONABLE or NECESSARY, but it also doesn’t cover some routine services as well.
Medicare A & B make up what is known as ORIGINAL MEDICARE. Let’s take a look at the newer parts of Medicare – Parts C and D.
Medicare Part C
Stick with us, things are about to get a little confusing.
Part C, aka Medicare Advantage Plans, can be chosen INSTEAD OF Original Medicare. Think of it as an All-in-One Medicare Plan offered by a private insurance carrier.
In 1997, Medicare beneficiaries gained the option of receiving their Medicare benefits through a managed health plan as an alternative to Original Medicare A&B. Now known as Medicare Advantage, Part C combines the hospital coverage from Part A, the medical coverage from Part B, and typically the drug coverage from Part D into one package, with extra value-added benefits such as gym memberships or dental coverage. By joining a Medicare Advantage plan, you instruct Medicare to pay a set monthly amount (capitation) to the Advantage Plan provider for your health care coverage. In exchange, the Medicare Advantage plan provides your Part A and Part B services.
Networks & Costs
Medicare Advantage Plans typically have limited networks and copays, deductibles, and out of pocket maximums that all vary by location, carrier, and plan type. These plans often have lower premiums than Medigap/Supplement plans, but with the out of pocket expenses varying so greatly, you could end up paying much more in the long run with Medicare Advantage.
Take note – you are still responsible for your Medicare Part B Premium in addition to any Medicare Part C premiums when you sign up for an Advantage Plan AND you must have Part A and Part B before you can enroll into Part C.
Learn more about Medicare Part C – Advantage Plans on our Medicare Advantage page LINK HERE
Medicare Part D
After seniors were forced to pay for most of their prescription drugs out of pocket for over 40 years, the Federal government stepped in and created Medicare Part D in 2006. Part D Prescription Drug Plans are offered through Private Insurance Companies to give Medicare beneficiaries more affordable access to medications.
Private Insurance Companies – NOT Federal Government
These Private Insurance Companies contract with the Federal government to provide lower drug prices and protection against catastrophic drug costs, but it is not offered directly through the government. Therefore, you must choose and sign up for a drug plan in your state rather than signing up through Social Security. By signing up for a drug plan in your state, you have enrolled into Part D.
Medicare Part D costs vary based on the drugs you take, the pharmacy you prefer, and which plan you are looking at. It is important to get a comparison based on the prescriptions you take. There are roughly 27 Prescription Drug Plans available each year and they all have different premiums, deductibles, copay amounts, and formularies.
Annual Changes are a FACT
In addition to all of the variables amongst the Prescription Drug Plans, they all change their premiums, deductibles, copay amounts, and formularies ON AN ANNUAL BASIS.
Technically, they can be optional.
In exchange for your Part D premium, you get significantly lower copays for your prescriptions compared to your costs without Part D coverage. If you choose to not have Part D coverage initially, but then change your mind later and enroll, you could face a penalty charge that you will have to pay for life. Be sure you understand all of your options before you decide to opt-out of Part D coverage.
So, what about all of the other letters? F, G, K?
It’s common for people to confuse Medicare Parts and Medicare Plans.
Medicare only has 4 parts – A, B, C & D.
All of the other letters you may have heard are Medigap / Medicare Supplement plans. These are standalone plans you purchase to fill in the gaps left by Original Medicare.
Learn more about Medicare Supplement Plans on our Medicare Supplement page LINK HERE
Most people become eligible for Medicare the first day of the month they turn 65. When you turn 65, if you are a citizen or permanent resident of at least 5 years and you (or your spouse) worked 10 years, you will be eligible for Medicare.
Special Enrollment Events
There are several reasons you may choose to delay enrollment into Medicare when you turn 65, such as being employed with group insurance. These events qualify you for a Special Enrollment Period that will allow you to enroll into Medicare outside of your Initial Enrollment Period without any penalties. Some reasons you may use a Special Enrollment Period include:
- You lose your current creditable coverage (Group)
- Divorce resulting in loss of Dependent/Spouse Coverage
- You move out of the area
- Recently moved back to the US
- You require or no longer require a Special Needs Plan (SNP)
Social Security Disability & Medicare
You may be eligible for Medicare if you are receiving Social Security Disability Income, even if you are under 65. There is a 24-month waiting period that begins the month you receive your first SSDI payment. During the 25th month of SSDI payments, you will automatically be enrolled into Medicare. Please note that some disabilities such as ALS (Amyotrophic Lateral Sclerosis) or ESRD (End-Stage Renal Disease).
Medicare Enrollment Progress
To add a layer of confusion, the enrollment process also varies based on the events list above.
If you are turning 65 and already receive Social Security – you will automatically be enrolled into Medicare.
If you are turning 65 and are NOT receiving Social Security – you will need to sign up for Medicare A & B via the Social Security website (ssa.gov) or contact Social Security for an appointment.
If you are under 65 and disabled, receiving SSDI payments – you will automatically be enrolled into Medicare the 25th month of your SSDI payments.
If you are losing creditable coverage, you will need to take forms signed by your employer to the Social Security Office in person to enroll.
Medicare Enrollment FAQs
- Is it mandatory to go onto Medicare when you turn 65?
No, but if you do not have creditable medical coverage, such as through a large group employer, there are SIGNIFICANT PENALTIES for late enrollment.
- What if I have coverage through my employer?
If you are new to Medicare and are still working at age 65, there are a number of factors to consider if you should remain on your group coverage or move to Medicare.
- Is keeping your group coverage cost effective?
- Is your employer considered SMALL or LARGE?
- Would it be beneficial to have both?
- What documents do I need to sign up for Medicare?
The documents you will need to have on hand for Medicare enrollment include your birth certificate/proof of citizenship and Driver’s License or ID. If you are leaving your group coverage and enrolling under a Special Enrollment, you will also need to bring 2 forms signed by your Employer proving creditable coverage.
- How can I sign up?
You can enroll online at ssa.gov, calling the Social Security Office, or visiting your local Social Security Office. If you are leaving group coverage and enrolling under a Special Enrollment, you must go to the Social Security Office in person.
- What are the different parts of Medicare?
Visit our section – MEDICARE 101 – to get your bearings on the different parts of Medicare.
IF YOU NEED HELP NAVIGATING MEDICARE, CALL 904-737-3636
Medicare Supplement Plans
What is a Medicare Supplement?
Medicare Supplements are add-on policies sold by private insurance companies to help cover the gaps in coverage from Original Medicare that would normally end up being your responsibility. Original Medicare Parts A and B do cover a large portion, but roughly 20% of your healthcare expenses, such as deductibles and coinsurances, are considered your share of your Medicare expenses. That 20% gap can be quite significant when you experience a major health event. Often called Medigap policies, Medicare Supplements pick up most of that left-over expense, depending on the plan, protecting your savings and giving you peace of mind. These plans are the most predictable coverage you can purchase as a Medicare beneficiary, where you know exactly what’s covered for every procedure based on which plan you choose.
Here’s how it works-
You purchase a Medicare Supplement policy through a private insurer based on your health needs. You pay a monthly premium to that insurer for your Supplement coverage ON TOP of the Part B premium you already pay to Medicare. While Part B premiums are often deducted from your Social Security benefit, Medigap policy premiums must be paid directly to the supplement company. When you visit a doctor or hospital, Part A or Part B kicks in first. Then, your Medicare Supplement is billed for the leftover costs.
What’s the coverage like?
Medicare supplement insurance pays for costs you’d normally be responsible for under Medicare, including:
- Deductibles: the amount you must pay before Medicare coverage kicks in
- Coinsurance: your share of the cost for a medical service
- Copayments: a set percentage of the costs for drugs and some health services
Medigap may also pay for some services Medicare doesn’t cover, including the costs of medical care when you travel outside of the United States.
Any new Medigap policy you buy won’t cover prescription drugs. You’ll need to sign up for Medicare Part D to get prescription coverage.
Your plan also won’t cover:
- dental care
- hearing aids
- long-term care
- private nursing
- routine vision care
The ABC’s of Medicare Supplements
Each Medicare Supplement Plan has a letter assigned to it, A-N, and each letter carries a different level of gap coverage. While the different letters have varying levels of benefits, all plans with that letter must have the same standardized coverage no matter who the carrier is. This is strictly regulated. The only difference between the plans offered by different carriers is the premium. Premiums vary depending on how the carrier prices the policy, which is dependent on different factors such as age, sex or geographical location.
You can see the standardized benefits for each Plan letter in the chart below. The most popular plans are the F, G and N Plan as they offer the most coverage. However, it all depends on your personal situation and how you want to plan your healthcare coverage. That’s the beauty of having 10 plans to choose from!
IMPORTANT NOTE! As of January 1, 2020 the C Plan and the F Plan will no longer be available for NEW Medicare Beneficiaries.
If you became Medicare eligible prior to January 1, 2020, the C Plan and the F Plan are still available to purchase.
The Open Enrollment Period for Medicare Supplements is the first 6 months after you’re first covered by Medicare Part B. During this time, you are guaranteed issue of the supplement policy and the supplement company cannot ask you any medical questions – even if you are a Medicare Beneficiary Under 65 due to disability. It is also the period where you will receive the best rates and coverage options, so you don’t want to miss it.
It’s important to note that your personal Medicare Supplement Open Enrollment is different from the Annual Enrollment Medicare has once a year. The Medicare Supplement Open Enrollment is a one-time, SIX MONTH window for most people. Once it closes, you won’t get another one and you will have to answer health questions when applying for a supplement plan. This could result in higher rates or denial of the supplement policy altogether depending on your health. So, while you can apply for a Medicare Supplement policy at any time during the year, you are only protected from potential denial based on the health questions/medical underwriting during that 6 month window after your Part B Effective Date.
- What is the difference between Medicare Advantage and Medicare Supplements?
A Medicare Supplement policy is a policy that you add to your Original Medicare Part A and Part B to help cover your cost-sharing expenses. A Medicare Advantage plan is a policy issued by a private insurance carrier to administer your Medicare Part A, Part B and Part D benefits that replaces your Original Medicare benefits that would otherwise be administered by CMS.
- What is Guaranteed Issue?
Guaranteed Issue is when the supplement company has to accept you regardless of your health, cover any conditions you already have, and not charge you an increased premium rate based on your health.
- What about Pre-Existing Conditions?
When you apply for a Medicare Supplement during the first 6 months of your Part B effective date, you cannot be turned down or charged more for any pre-existing conditions.
- Can the rates go up?
Good news! Rates are guaranteed for 12 months. Bad news? It’s impossible to avoid rate increases as they are allowed to increase rates once a year. We have seen rates go down too!
- Can you switch Supplement Plans?
Yes! The only hiccup comes if you develop a medical condition that affects Medical Underwriting. At that point, the new company can deny you based on that medical condition.
- Are Supplement Plans guaranteed renewable?
YES-ALL OF THEM! They can never drop you due to any health problems that develop after your policy has been issued.
- What is the Open Enrollment window?
This is the 6-month window that you can sign up for a Medicare Supplement without undergoing medical underwriting. It starts the day your Part B becomes effective and ends 6 months later.
- How much do they cost?
We understand that cost is a factor for many Medicare beneficiaries. It’s important to get a personalized quote with a licensed, independent agent as there are too many factors that can affect your monthly premium. You can expect to find most premiums between the $60 to $250 range in our area, depending on the Plan type, sex, age, and geographical location.
- Are they worth the cost?
The amount of peace of mind that Supplement plans offer is priceless. You will never have an unexpectedly large medical bill that could decimate your retirement savings as you know exactly what your Plan covers for each service. They are an essential piece to your financial planning for retirement.
- What about Hearing Aids? Long Term Care?
While Supplement Plans help considerably with your cost-sharing portion of your Medicare coverage, it does have limitations. For instance, no supplement covers dental, vision, hearing, long term care, or skilled nursing.
Medicare Advantage Plans
MEDICARE PART C / MEDICARE ADVANTAGE
What is Medicare Advantage?
You can think of the Medicare Advantage Plan as an “All-in-One Medicare Plan”. Instead of services being paid for by Parts A, B, D separately, a private insurance company handles the coverage of services under one plan. Medicare pays the plan a monthly fee to administer your Medicare benefits. With a Medicare Advantage plan, you have one ID card that you use at the hospital, doctor’s office, and pharmacy. When you present your card for services, the providers bill the plan instead of billing Medicare.
It operates much like the employer coverage that you had in the past – an HMO or PPO with a network of providers and a set schedule of deductibles, copays and coinsurances. It is also similar to employer coverage with its Annual Open Enrollment period, where changes can be made for the next plan year.
Remember – you must stay enrolled in Medicare Part A and Part B and you are still required to pay all Part B premium amounts.
Medical Bankruptcy and the Creation of Part C
As you learned in Medicare 101, Original Medicare A & B NEVER cover at 100%. Prior to Medicare Advantage, your only option for complete coverage was to purchase a Medicare Supplement policy. Unfortunately, many seniors could not afford the premiums associated with Supplements and were forced to carry on with only Original Medicare. Those people faced huge medical bills that they could not afford when they got sick or needed medical care and often faced Medical Bankruptcy. Even worse, now that they knew they needed a supplement they were unable to get one because they were now too sick to qualify.
Part C was developed as a solution to this epidemic and Part C eventually became known as Medicare Advantage. Part C answered the problem of enrollment with an Annual Open Enrollment Period and helped excessive medical bills resulting in Medical Bankruptcy by creating Out of Pocket Maximums that act as a safety net for major health events.
What’s the Coverage Like?
Medicare Advantage plans must provide all of the same coverage as Medicare Part A and Part B, but many also have additional benefits that add value for enrollees. The amount that is covered and the out of pocket expenses vary by plan and carrier. It’s always best to shop around based on your personal situation.
Any Medicare Advantage policy will cover:
- Hospitalization in a semi-private room
- Doctor visits
- Outpatient services
- Tests, including blood tests, X-rays, CT Scans and MRIs
- Emergency room visits
- The cost of durable home health equipment like oxygen and walkers
SOME Medicare Advantage policies will cover:
- Dental, Vision, & Hearing
- Fitness & Wellness Programs
- Over-the-Counter Allowances
Part C is NOT FREE
The benefits covered by Medicare Advantage Plans still require some level of cost sharing on your part. Medicare Advantage Plans set a fee schedule for each plan year that outlines what your out of pocket portion for coverage will be. The schedule will list any deductibles, copayments, and coinsurances required for services rendered.
In addition, you are STILL required to make your Part B Premium and any Part B and/or Part D IRMAA amounts. While insurance carriers will attract you to their plan with the lowest premiums possible, Medicare is still paying the carrier a set monthly rate to provide your coverage. This payment from Medicare is made up from the Part B premium you are required to pay, so you are still paying for your coverage, just indirectly.
Review Annual Changes (if any)
Advantage Plans are required to renew their contract with Medicare on an annual basis. This means that benefit coverage, copays, deductibles and the formulary MAY change each year. Always check your benefits each year during Annual Enrollment.
Know Your Network
Medicare Advantage Plans offer coverage through HMOs, PPOs, and other plans. For each plan, there is a list of “In-Network Providers”. These are providers that have agreed to the insurance companies fee schedule for covered services. When you visit an In-Network Provider, you can expect services to be covered at the rate outlined in your benefits. Visiting an Out-of-Network Provider could mean no coverage at all or higher out of pocket expenses, resulting in medical bills you are responsible for.
It’s important to understand your plan’s provider network to make sure you get the care you need at the lowest cost.
PPO vs HMO
You may remember HMOs and PPOs from when you signed up for employer health coverage and trying to spot the differences. Now it’s time to enroll into Medicare and those pesky abbreviations are popping up again. Both are plans designed to administer Medicare Parts A and B under the Advantage Plan program, but what’s the difference between the two? Is one better than the other?
HMO stands for Health Maintenance Organization. Medicare Advantage HMOs are traditionally more restrictive than their PPO counterpart. HMOs require that you choose a Primary Care Physician within their network at the start of your plan. This Primary Care Physician is the individual who coordinates your care. This includes any referrals to specialists that you need, as HMO plans require a referral to see a specialist. HMO beneficiaries are also limited to In-Network physicians and facilities that are usually local, excepting Out of Network emergency and urgent care will be covered .
While HMOs are less flexible, they do typically provide lower costs in terms of premium and out of pocket expenses.
PPO, or Preferred Provider Organization, plans offer beneficiaries much more freedom. PPOs do not require you to choose a Primary Care Physician and visits to Specialists do not require referrals.
A central feature of the PPO is its network of providers. As long as you see a provider that is In-Network, you will pay copays, coinsurances, and other costs at the In-Network Rate. Unlike the HMO, PPO beneficiaries have the ability to visit any provider, even those Out-of-Network. If someone chooses to visit an Out-of-Network provider, they will pay the Out-of-Network rate for copays, coinsurances, and other costs, which is much higher than In-Network rates.
It’s important to confirm if your provider is in-network prior to any visits to avoid any unexpected costs.
There are other types of Medicare Advantage plans that are less common than the traditional PPO and HMO. The most notable is the Special Needs Plan, or SNP. These are plans available for Medicare beneficiaries that fit the Special Needs category that the plan serves and may provide coordination of care and benefits not available in other plans. SNP plans are available for certain chronic conditions like Diabetes or End-Stage Renal Disease, as well as those considered Dual-Eligible, meaning those eligible for both Medicare AND Medicaid.
Less common plans are Private Fee-for-Service (PFFS) and HMO Point-of-Service (HMO POS). Both of these plans can have significantly higher out of pocket costs than the other types mentioned.
Prescription Drug Coverage
Most Medicare Advantage Plans also administer Medicare Part D and are known as Medicare Advantage Prescription Drug Plans, or MAPDs. Each Medicare Advantage Prescription Drug Plan has a Formulary, or a documented list of every prescription drug medication it covers. The prescription drugs are placed in Tiers. The tier determines the level of cost sharing you can expect for the plan year.
Do Your Research
Seemingly similar plans can cover the same medication at shockingly different amounts. It’s important that you research your drug costs across all of the plans available.
Just like the networks for Medicare Advantage Plans, the drug formulary changes every year. Always check your medications during Annual Enrollment to avoid unexpected, large out of pocket costs.
When Can I Enroll?
A feature of Advantage plans is their limited timeframes that you can enroll or disenroll.
Initial Enrollment Period or Special Enrollment Period
You can enroll into a Medicare Advantage Plan when your first turn 65 or enroll into Part B.
Annual Enrollment Period
Every year, between October 15 and December 7th, Medicare beneficiaries can make changes to their coverage. During this time, you can enroll or disenroll into a Medicare Advantage Plan with the new coverage changes taking effect January 1st of the following year.
Medicare Advantage Open Enrollment Period / General Open Enrollment
The most common phone call we receive in January is from a Medicare Beneficiary who enrolled into an Advantage plan during Annual Enrollment without the help of an INDEPENDENT AGENT and their new plan doesn’t cover their medications or they find their doctor is not in-network. The beneficiary is worried that they will be stuck with this plan for an entire year. And in the past, they were. But Congress recently created a new enrollment period for those enrolled in Advantage plans to either revert back to Original Medicare or move to a new Medicare Advantage Plan that better suits their needs. This period runs from January 1st through March 31st.
Play by Their Rules
The low premiums offered by Medicare Advantage plans are certainly enticing, but the money you save forces you to play by their rules. Before making that trade off, let’s review what the rules for Medicare Advantage Plans are.
- Use Network doctors and hospitals for lowest out of pocket costs.
- Get Prior Authorization for certain procedures
- Obtain a Referral before seeing a specialist if enrolled in an HMO
- Maintain Part A and Part B Enrollment by making Part B and any IRMAA payments
Frequently Asked Questions-
- Do I lose Part A or Part B when I enroll in Part C / Medicare Advantage?
No, Medicare Advantage plans do not replace Medicare. Once you enroll in an Advantage Plan, the private insurance company offering your plan will take over the administration of your Medicare benefits. You still pay Part B premium and you can return to Original Medicare during Annual Enrollment.
- Does each Medicare Advantage Plan offer the same benefits?
No, each Medicare Advantage Plan is different. While all Medicare Advantage Plans have to cover at least services covered by Original Medicare A & B, each plan can charge different deductibles, copays and coinsurance amounts. Some also feature Value Added Benefits like Dental or Vision.
- Do I still present my red, white and blue Medicare card to providers?
No. Once enrolled in a Medicare Advantage Plan, you will receive a Member ID Card from your insurance carrier. You will present this Member ID Card to your doctors and pharmacy.
Keep your red, white and blue Medicare Card somewhere safe. If you present your red, white and blue Medicare Card at the time of your service while on an Advantage plan, your claim will be denied.
- How are Medicare Advantage plans FREE?
They aren’t in the slightest. You will often see $0 premium associated with Medicare Advantage Plans. This means that there is a $0 premium for the Medicare Advantage Plan itself. You are still responsible for paying your Medicare Part B premium and any IRMAA amounts due.
Private insurance carriers are able to offer $0 premium Medicare Advantage plans because the government is more than happy to pay them a monthly stipend to handle your healthcare. Medicare pays the private insurance carrier a set amount each month for them to administer your benefits, so while you are not paying a premium to the insurance carrier directly, they are still getting paid by Medicare on your behalf.
- If I enroll in Medicare Advantage, do I also need a Supplement Plan?
No, Medicare Advantage does not work with Supplement Plans. You are unable to use both.
- Do I still pay for Part B?
Yes, you are still required to pay your Medicare Part B Premium and all IRMAA amounts.
- Can I see any doctor or hospital?
No. Medicare Advantage plans worth within Provider Networks. Going to a doctor or hospital outside of this network will result in major out of pocket expenses.
- Who is eligible? Can I sign up or disenroll from an Advantage Plan at any time?
Typically, if you are enrolled in Part A and Part B, you are eligible for a Medicare Advantage Plan. However, you must also live in the plan’s service area.
- What if I travel a lot?
Because of the limited networks, it’s hard to recommend Medicare Advantage to someone who travels a lot. Some Medicare Advantage plans have a network that only spans one zip code, while others do provide limited in-network coverage across state lines. If you do travel a lot, you might consider your other options to avoid the headache.
- Do I ever need to compare plans again once I choose an Advantage Plan?
YES! We cannot stress this enough – Medicare Advantage plans can and DO change their networks, formularies, and cost sharing figures each year. NEVER SET IT AND FORGET IT! You could end up spending thousands more over the years on your healthcare by not comparing your options during each Annual Enrollment Period.
Prescription Drug Plans
Remember from Medicare 101 that Medicare Part D refers to Prescription Drug Plans that you purchase as an add-on to Original Medicare (or sometimes Medicare Advantage, if not included) to help with the cost of your prescription medications. There is no other portion of Original Medicare that provides any coverage for Prescription Drugs that you pick up from a Retail Pharmacy.
How it Works
Every year a couple dozen or so private insurance carriers will contract with the Federal Government to help with the high cost of prescription drugs. You pay a premium to the insurance carrier you sign up with, then send you a card to present to your pharmacist, and you pay a reduced share based on the medication and pharmacy. There are currently 28 Prescription Drug Plans offered in Florida. Each plan has a different premium cost, a different formulary, and different preferred in-network pharmacies.
The good news is, chances are you’re going to find one that works with your personal situation. They are gracious enough to send you an Annual Notice of Change each Fall, but if you miss it, you may be spending way more than you should on medications come January 1st.
Because the drug plans can change so drastically from one year to the next, it is extremely important to pay attention when Annual Enrollment rolls around each October. Medicare.gov has a tool that you can shop your drugs and compare the drug plans that will be available for the coming year.
Of course, you have the Initial Enrollment Period when you first sign up for Original Medicare. At the time you select your Medicare Supplement plan, Bill Gardner, The Medicare Guy, will do a personalized analysis of your prescription drugs so you can be sure you’re starting your Medicare journey in the driver seat.
Part D Prescription Drug Coverage is considered OPTIONAL. That is certainly not the path that Gardner and Company recommends, but sometimes Medicare beneficiaries have a shaky start to Medicare and either forget to enroll in a D plan or have received bad advice to go without. If you start Medicare and choose to not enroll into a Prescription Drug Plan within your Medicare Initial Enrollment Period, you not only have to wait until the next Annual Enrollment Period to pick up coverage, but you will also be assessed a LATE PENALTY if you did not have other creditable drug coverage. That means even if you develop a major health problem that requires name-brand medications, you’re going to be responsible for that cost out of pocket for a while and when you do pick up coverage, you will pay a percentage based on how many months you did not have coverage on top of your drug plan premium FOR LIFE.
How much does it cost for Medicare Part D?
You will pay a monthly premium to the insurance carrier that you enroll with for your coverage. The current premiums range from $13.20 to $155.90. Keep in mind if you owe Part B IRMAA, you will also owe a Part D IRMAA. IRMAA payments are billed by CMS and paid separately from your D Plan Premium.
Who is eligible for Medicare Part D?
Any beneficiary who is enrolled in either Part A and/or Part B can purchase a Prescription Drug Plan in their area. You can enroll into a standalone Prescription Drug Plan or choose a Medicare Advantage Plan with Drug Coverage included.
Should You Skip Part D?
In our opinion, it’s not worth the risk. Prescription Drugs are EXPENSIVE. When you can enroll into a plan for less than $15 per month, it doesn’t make sense to potentially face massive out of pocket expenses during the year or end up paying a penalty once you do pick up Part D coverage.
An exception is if you already have creditable prescription drug coverage through another source. If you have group coverage or another form of creditable drug coverage, you can delay your enrollment until you have lost the creditable coverage, at which point we advise you enroll into a Prescription Drug Plan immediately.