Mar 12 2017

Medicare & Me

If there’s anyone out there still thinking your information is private, I’m here to tell you it’s not. The health insurance companies started filling my mailbox with information on Medicare at least six months before my 65th birthday. They have apparently been watching and anticipating my big 6-5 along with the United States government. Despite the overload of information everything was as clear as the road before you on a foggy night.

Even the federally provided booklet Medicare & You didn’t clarify the subject. I consider myself a reasonably intelligent person. However much I thought I understood the government’s booklet, there was still a doubt, a HUGE doubt, that I had indeed grasped all the nuances. Convoluted doesn’t begin to describe it — Parts A, B, C, D, F, G and more.

Fortunately, the Osher Lifelong Learning Institute I attend at Furman University offered a course last fall in Understanding Medicare. I signed up. With each class dedicated to a lettered Part, the fog began to lift. The idea that it takes an hour and a half to explain Part A and so on is ludicrous. I wondered what people who don’t have access to a course do to understand and make an informed decision.

As my mailbox continued to hold offers from all kinds of insurance companies and agents, some of which I had never heard of, I piled their correspondence and applications on my desk. My strategy was to sift through them after finishing the class. However, our instructor recommended going with one of the five large, well-known carriers in the state. Since that made perfect sense to me, I eliminated all the rest. My pile shrunk by two-thirds, making the task less daunting.

If you are already receiving Social Security, you don’t need to apply for Medicare. You are automatically enrolled. Keep your eyes open for the government envelope carrying your Medicare card for Parts A and B. It does not look official! I almost threw mine out thinking it was from yet another unheard of insurance company. If you are not receiving social security, you have to apply for Medicare; you have 3 months before your 65th birthday and 3 months after to do so.

Since Part A is provided by the government, courtesy of your Medicare taxes while working, and Part B is provided by the government and paid for by a monthly premium from you, what you are really looking for from insurance companies is prescription drug coverage and supplemental insurance. Part A provides hospital coverage and Part B provides coverage for items such as doctor visits, flu shots and walkers. There are deductibles and co-pays, which is why you are getting supplemental insurance coverage also known as Medigap. You are not required to get supplemental insurance, but if you don’t, understand you will have to pay deductibles and co-pays from your pocket.

Some people opt for Part C known as the Advantage Plan, which means you have private insurance and do not use the federal government’s Parts A and B. The insurance company receives what the government pays for Part A as well as your Part B premium. Not all insurance companies have Part C plans. Most Part C plans have a co-pay for doctor’s visits. The real caveat is you have to use in-network providers including your primary physician. So Part C can be a problem if you travel, have a medical issue and your primary physician is not there and there is no in-network hospital. You will end up paying out-of-network rates and most likely have to pay the difference from your pocket. This is why I didn’t go with an Advantage Plan.

Note: If you travel to foreign countries be aware that Medicare does not cover you outside the United States. If you go with the Advantage Plan Part C ask for a copy of the policy before you apply and read it. In fact, read whatever policy you decide to buy. Knowledge is power!

Part D is prescription drug coverage. What company you choose for Part D will depend upon your prescriptions. Different companies have different tiers for drugs. Deductibles and co-pays vary from company to company along with which tier they put a drug into. Make sure you review what tier your drugs are in with each provider and what your out-of-pocket cost will be in addition to the cost of the coverage.

I went with Part F as my supplemental insurance. Part F covers deductibles and co-pays for both doctors and hospital stays. I can go to any doctor or hospital I want and don’t have to be concerned about “What if something happens while I’m traveling?” I do not have to be in-network. I also have 80% hospital coverage if I’m in a foreign country and have a medical issue.

The other letters such as G, L and N are simply other versions of supplemental insurance. You have to read about them in order to make the best choice for your individual situation. If you don’t have access to a course, I recommend calling AARP (800-272-2146) to speak to a United Healthcare agent as I found their agent to be the most knowledgeable, articulate and willing to spend the time reviewing the intricacies of Medicare. I receive nothing for making this recommendation to call AARP.  I did not go with United Healthcare as I chose to stay with the carrier I’ve had for the last 25 years even though they cost $3 a month more for my premium. This was one time I wasn’t leaving my comfort zone.

All of us in the United States will have to go through this process as we approach 65. I doubt it will become any less convoluted in the future. I hope this small explanation helps. For more information go to SSA.gov or medicare.gov. And good luck!

26 comments on “Medicare & Me”

  2. So glad I’m past this point… helpful info …I’m sharing with a few who are still trying to decide

    ________________________________

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  3. I chose the Medicare Advantage plan with the HMO I’ve been with for 30 years. But now that I live in Arizona for five months of the year, I’ll need to make a change this fall. I need to be able to access medical care other than urgent or emergency care.

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  5. Thank you for that helpful info! Also, even with the supplemental coverage, it’s most cost effective to go to doctors who accept Medicare assignment. Otherwise you have to pay the bill up front and get reimbursed later by Medicare, but the amount you receive will be lower than you would hope to get.

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  7. This was very interesting! I’m turning 59 this year and David is turning 60, so insurance has been a huge problem for us. Last year we were uninsured for the first time in our lives – yes, the year I’m diagnosed with breast cancer. (We were part of a Christian Medical Sharing group, but they make clear it is not insurance.) This year we signed up again for Blue Cross Blue Shield of SC (since we are full-time now) insurance through the healthcare marketplace, which has been a lifesaver due to $50,000 of bills so far.

    The situation of 2016 was caused because we lived in two places. In 2016, for the first time, Blue Cross dropped all their PPO plans in AZ. So if we bought an HMO plan there we were not covered during the months we were in SC. In SC it was the same situation in reverse. There was one policy at $900 a month that had a $12,000 deductible PER PERSON and paid only 50% of our out of network bills with a company we had never heard of. When David retired in 2013, we were just planning to be on our private PPO plan at $900 a month until age 65 – never guessing that plan would be dropped completely! (By the way, the first 6 months of David’s retirement we continued his City of Phoenix insurance that cost $1700 a month back then – it is $2000 a month now – not sustainable!! The City chipped in $200 a month, but that still wasn’t a huge help.)

    So as you can imagine, we are eager to be 65. Ha!

    Love, Renee

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    • Renee, You point out the predicament of health insurance coverage if you have a situation where you are not employed or are an independent contractor. As a retired real estate broker I understand that the huge premiums and deductibles are not a result of the Affordable Care Act (Obamacare). They were there 15 or 20 years ago. As Jan mentioned, we need universal healthcare, which is different from socialized medicine, and a one payer system. There are millions of people in your situation. K

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  9. Just one comment:
    Medicare Advantage (Part C-which includes A, B, and D) is paid for by the Federal government. Medicare passes monies to the Medicare HMOs. There is a monthly payment by the person who joins a Medicare HMO to the Medicare HMO, as well. The co-pays vary by the plan, but are substantial when a person is hospitalized. Most of the HMO’s are publicly traded companies (SCAN in Arizona and California is one example of an exception as it is not for profit-Kaiser is another example). The public companies (United, Humana etc) who own Medicare HMO’s make substantial money from the monies passed through.
    Medicare.gov is well written but the whole decision making process can be confusing.
    Medicare part B and D are also income based–if you have a higher income, you pay more.
    if one does not sign up for a Medicare supplement, the person could be at risk for paying 20% of a hospital bill (Medicare part A will pay 80%).

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    • Medicare Part A covers 100% of hospital bill. Medicare Part A also covers 100% of home health services. It will also cover 100% in a skilled nursing facility for the first 20 days as long as you are receiving a skilled service. From the 21 – 100 days there is a co-pay and you need a secondary to cover this. Part B covers 80% of outpatient services such as doctor visits, outpatient therapy, imaging services, medical equipment. So with part B you would have a 20% co-pay unless you have a secondary insurance that covers the 20%. This info only applies only to Medicare, not an advantage plan.

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  10. You are SO right about this being complicated and crazy! I’ve just turned 65, am still working but will be retiring from that very soon. I can highly recommend a book that AARP recommended, “Medicare for Dummies”. Yes it’s one of the “Dummies” type books but it has great information in a format that you can understand. It’s by Patricia Barry, an AARP Medicare expert. Helps explain a lot!
    Jan

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  11. Your post was very informative, but some of the information you posted is incorrect. You are only automatically signed up for Medicare A&B if you are 65 and receiving social security benefits (per the Medicare web site and there are some other exceptions). Some people won’t reach full retirement age until 66 or older so wouldn’t be receiving Social Security, so in that situation you do need to enroll at 65 (it’s not automatic). Also, if you don’t sign up for Medicare part B when you first become eligible, you will pay more for premiums for each year you delay. The exception is if you still receive insurance from your employer or a spouse’s employer. There is a form on social security web site that needs to be completed showing you already have health care coverage. I would hate for someone to delay applying because they thought they’d automatically be signed up. I’m in the process of reviewing my options. Yikes!!!

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    • Thanks Laurel for the additional information. There is so much more information than I could possibly put in an article. However, if you are already receiving Social Security benefits, you are automatically enrolled in Medicare. This information is taken directly from Page 10 of the SSA booklet on Medicare as follows:
      “If you’re already getting Social Security benefits or railroad retirement checks, we’ll send you information a few months before you become eligible for Medicare. If you live in one
      of the 50 states, Washington, D.C., the Northern Mariana Islands, Guam, American Samoa, or the U.S. Virgin Islands, we’ll automatically enroll you in Medicare Parts A and B. However, because you must pay a premium for Part B coverage, you can choose to turn it down.
      NOTE: Residents of Puerto Rico or foreign countries won’t receive Part B automatically. They must elect this benefit. If you’re not already getting benefits, you should contact Social Security about three months before your 65th birthday to sign up for Medicare. You can sign up for Medicare even if you don’t plan to retire at age 65.” http://www.ssa.gov/pubs/EN-05-10043.pdf

      I received the information including my card automatically just as the above says. I also later received a letter from the SSA telling me how much my Part B premium would be, when it would start and what my net SS deposit would be each month as a result. This is convoluted to say the least so, if in doubt, contact the SSA directly. K

      P.S. Even if your full retirement age is 66, you can opt to take a lower SS benefit at an earlier age. Some people choose to do this and are receiving benefits.

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      • Yes, I did mention you have to be receiving social security benefits to automatically be enrolled, but most of us in our mid 60’s won’t receive full social security benefits until we are 66+ so we wont be automatically enrolled at 65 because we are not receiving Social Security yet. We will have to apply for it. You can start receiving social security at 62, but at a reduced rate, and then at 65 in this case you would automatically be enrolled. You can also get Medicare earlier in some circumstances (ex: if you are disabled for 2 years or on dialysis). If you wait until full retirement to collect social security (66 in my case), I will have to apply for Medicare at 65. I won’t be automatically enrolled because I am not yet collecting Social Security. I actually plan to wait until 70 to collect SS because you earn an additional 8% each year that you postpone up until 70. It’s just important to remember that if you don’t apply at 65, you will pay higher premiums each year you postpone, unless you receive health insurance from your employer or spouses employer. Hope this clarifies a little more. It is definitely confusing!

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  12. This a very clear and helpful explanation. I took the one-session “Medicare 101” class at my local Senior Center the year I retired, but it mostly focused on Parts A, B, and C. For the first three years, I am getting supplement and drug coverage from my former employer; but that will change at the end of this year and I’ll need to negotiate the intricacies of Medicare supplement types and Part D.

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  13. Great information! It will be a few years until I have to worry about this – and who knows what the program (if it’s even still in existence) will look like then. I sure hope there will be a class like you took to explain it all. It seems that they could make it easier… oh wait, that would be single-payer/universal health care.

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  14. I am not looking forward to figuring this all out. I have the added (positive) issue of having company retirement healthy insurance to factor into the whole thing. I will definitely look for the OLLI class locally. Great idea! And I’ve put your info plus the Medicare for Dummies book and the AARP call number into a file on my computer with “kathy’s medicare insights”!

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  15. Good advice for those just becoming eligible. I have a Medicare Advantage plan with Blue Cross because it covers me when I travel. Not all plans do, as you point out.

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    • Rin, Most Advantage Plans (part C) cover you when you travel within the U.S., but if you end up at an out-of-network hospital, you have to pay the difference between in-network and out-of-network costs. K

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  17. Thanks for this informative post! I agree with you that Medicare and Supplement plans (Medigap) are very confusing. One post is not enough to explain everything about them. But this one is sufficiently helpful to make those who will soon turn 65 understand the important parts of the said coverages.
    Glad you took the Medicare supplement plan F! Hoping on your next post you will share more about how you are taking advantage of this type of plan and how having a supplemental plan for Medicare makes a difference. Wish you all the best!

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