The more you understand about Medicare, Medicare Advantage, and Medicare supplemental plans, the better decisions you can make to get the best healthcare services available all while keeping your costs and expenses as low as possible.
No matter what your current health condition is, it is important that you understand and use the Medicare benefits available to you.
As a case in point, my father-in-law is a healthy 71-year-old. He takes daily bike rides, lifts weights in the gym and is still travelling and working in corporate America. Earlier this year though, he had a cough that just wouldn’t clear up. He suspected that perhaps he was having a re occurrence of Valley Fever, which he had contracted four years earlier.
However, when he went to get checked, the physician told him that his heart rate was too slow and his white count was elevated. Through a series of small miracles, it was discovered that he had a treatable for of leukemia. He simply has to take a pill once a day to keep the blood disorder in check. It should not affect his life in any significant way.
However, when he went to fill the prescription he was alarmed at the price tag for one month’s worth of the medicine—at several thousand dollars it was going to be difficult to pay for for the rest of his life. This is where his Medicare plan came to play a huge role in his healthcare, by offsetting the cost of the medicine and allowing him to pay for the prescription at a reasonable price.
Though the Medicare program can seem complicated at first, in this guide we will give you a straightforward understanding of Medicare Advantage in particular and help you navigate it, get enrolled, and have the coverage you require exactly when you need it most.
WHAT IS MEDICARE ADVANTAGE
It is likely that you have heard the term “Medicare Advantage” through advertisements or by word of mouth. But what exactly does this refer to?
First, Medicare itself is a type of health insurance. It is a government provided healthcare insurance program established and administered by the United States federal government.
It gives health care coverage (health insurance) for all people over age 65, or for those under 65 that receive Social Security Disability Insurance (SSDI) or those that have end-stage renal disease (ERSD).
Traditionally, because of their age or the magnitude of their healthcare challenges, all of these groups of people have a difficult time finding adequate and affordable health insurance coverage in the private insurance sector. Their age, their disabilities, or their illnesses, make it very expensive to insure them.
In order to make health insurance available to these groups, the federal government set up the Medicare program. It is funded in part by taxes—by Social Security taxes and by Medicare taxes which are paid on your income throughout your career. It is also funded in part by premiums paid by those using the Medicare program.
Medicare originated in 1965 as a part of the Social Security Act. It was created as a social safety net to protect citizens over the age of 65 or those younger than that with specific health conditions, like end-stage renal disease or for organ transplants.
As it is today, Medicare is administered in two ways:
You can choose to enroll in Original Medicare, which will pay 80% of your medical care and allow you see whatever doctor and go to whichever hospital you prefer. You are responsible for paying a premium to be in the program and 20% of you medical bills.
Original Medicare does not cover prescription medicine. In order to receive prescription drug benefits, you have to pay an additional premium for Medicare
Original Medicare is administered by the federal government directly.
For your information and understanding, Original Medicare is also referred to as Medicare Part A and B. Simply, Part A is for hospital coverage. Part B is for outpatient healthcare services.
You also have another option when it comes to Medicare coverage. This is known as Medicare Advantage and also as Medicare Part C.
If you choose a Medicare Advantage plan, you will pay a smaller premium and a co-pay for medical services but everything else—all other healthcare expenses—are covered by your insurance company.
There are far less out-of-pocket costs associated with Medicare Advantage than Original Medicare.
The difference between the two plans is that with a Medicare Advantage plan you are required to see a doctor and go to a hospital within a specific service area. In exchange for smaller premiums and very low out-of-pocket costs, you give up the option of getting your healthcare services wherever you want.
Medicare Advantage also differs from Original Medicare in that it is administered by private insurance companies who have contracted with the federal government to provide the service to patients. The private insurance company would administer your benefits and you would pay your premiums to them.
Another important difference to note is that most Medicare Advantage plans include prescription coverage (Medicare Part D) as part of your policy. Many plans also add vision and dental benefits for their policy holders as part of a comprehensive healthcare insurance plan.
As you evaluate the advantages and disadvantages of each Medicare program, consider your healthcare needs as well as your budget considerations. If you have to have a major surgery, are you in a position to cover 20% of that bill? How do you plan to cover prescription drug costs? It is not unusual for new medicines to cost thousands of dollars.
As you make these decisions, think about what makes the most sense for you and your personal situation.
For many people, choosing Medicare Advantage is the obvious choice. With less out-of-pocket costs and included prescription drug coverage, it presents lots of advantages for many people from all walks of life.
Once you have made the choice to enroll in Medicare Advantage, what happens next? How do you get enrolled and start receiving your benefits?
ENROLLING IN MEDICARE
When you turn 65, you automatically become eligible for Medicare, as long as you meet either of the following requirements:
citizen or you are a permanent U.S. resident who has lived in the United States
for five continuous years before applying.
Everyone who meets these requirements is eligible to be covered under the Medicare program, but keep in mind that your premiums will be based on whether you or your spouse also contributed any Medicare taxes during your career.
If you or your spouse did not contribute, obviously your premiums will be higher.
Now that we have talked about how to become eligible for Medicare, we will outline how to enroll in the program itself. We will specifically be addressing how to enroll in Medicare Advantage (Part C).
To enroll in Medicare, the steps are different depending on whether you are collecting your Social Security retirement benefits when you enter you Initial Enrollment Period, or IEP.
If you are already receiving your Social Security benefits then you will be automatically enrolled in Medicare Parts A and B. You will receive an envelope in the mail three months before your coverage starts that contains your Medicare card and a detailed explanation of the program. If you are automatically enrolled in Medicare Parts A and B (Original Medicare) because you are receiving Social Security benefits, you can then change your plan to a Part C Medicare Advantage Plan.
If you meet the eligibility requirements for Medicare, but you are not yet receiving your Social Security retirement benefits, you will not be automatically enrolled in the insurance program, and you will be required to enroll during one of three specific time periods. At the time of enrollment, you may choose a Medicare Advantage Plan.
The three times you may enroll in Medicare are:
1.Initial Enrollment Period (IEP)
Your Initial Enrollment Period is a seven-month period surrounding your 65th birthday.
It includes the three months before your 65th birthday, the actual month of your birthday, and the three months following your birthday.
You may sign up for Medicare anytime during this seven-month period, but you need to be aware that the date when your coverage beings depends entirely on when you sign up.
- If you enroll during the first three months of your IEP (the three months before you turn 65), coverage will begin the same month that you first become eligible for Medicare, the month of your birthday.
- If you enroll during the fourth month of your IEP (your birthday month), coverage will start the month following the month of enrollment.
- If you enroll during the fifth month of your IEP, coverage won’t start until the second month following the month of enrollment.
- If you enroll during the sixth or seventh month of your IEP, coverage will begin on the third month following the month you signed up.
We have created a chart that will make this more clear. Let’s say, for instance, that you turn 65 in May. Use the chart to determine when you can enroll in Medicare and when your coverage would actually begin:
|YOU CAN ENROLL ANYTIME IN:||YOUR COVERAGE BEGINS:|
There is one exception to these rules. If your birthday falls on the first day of the month, your IEP is the seven months surrounding the month prior to the month of your birth. So, if you, if you turn 65 on October 1st, your IEP is the seven months surrounding September, and would run from June 1st to December 31st.
2.Special Enrollment Period (SEP)
If you do not enroll in Medicare during your Initial Enrollment Period (IEP). Special Enrollment Periods (SEPs) are enrollment opportunities outside of the usual enrollment period.
They are only triggered by a specific set of circumstances.
Some of these circumstances include the situation when you were covered by a job-based healthcare plan (provided by either your employer or your spouse’s employer) at the time you became eligible for Medicare.
The SEP allows you to enroll in Medicare without penalty for up to eight months after you or your spouse stops working or you lose your group health coverage, whichever happens first.
In this case, your Medicare coverage will start the first month after you enroll. If you happen to retire in December, your healthcare benefits from your employer stop, and you sign up for Medicare in January, your coverage will begin on February 1st. To protect yourself and avoid a gap in coverage, you should enroll in Medicare the month before your job-based insurance ends.
3.General Enrollment Period (GEP)
If you did not sign up for Medicare when you originally became eligible for it (either during your IEP or a during an SEP), you can enroll during the General Enrollment Period which occurs from January 1th to March 31th every year.
If you sign up during the GEP, your Medicare coverage will begin July 1th of that year. Keep in mind that if you wait for a GEP you will probably incur a late enrollment penalty, because you have not been paying premiums, and you may face gaps in coverage waiting for your benefits to begin.
There are a few more things you should know about enrollment that are specific to Medicare Advantage plans.
4.Another SEP exception
Because Medicare Advantage plans are based on a specific service area, if you move you will be allowed to change your plan.
If you tell your Medicare Advantage plan before you move, your chance to change plans starts the month before the month you move and continues for 2 full months after you move. Let’s say you move in January. You can change you plan from December to March.
If you tell your Advantage plan after you move, your chance to switch plans begins the month you tell your plan, plus 2 more full months. Giving your plan notice of your move gives you one extra month before the move to change plans.
5.Medicare Advantage Open Enrollment Periods
Effective January 1th, 2019, you can switch from a current Medicare Advantage plan to another Medicare Advantage plan for the first three months of the year, January 1th to March 31th.
Additionally, you can change your health coverage options within the same plan, as well as add, drop, or change your drug coverage during Fall Open Enrollment. Fall Open Enrollment happens every year from October 15th to December 7th.
Obviously there are a lot of rules regarding enrollment in Medicare. If you have questions or concerns about your personal enrollment or making changes to your existing Medicare Advantage plan, contact a licensed Medicare Insurance agent and they can walk you through the details of your specific situation. They are there to help you navigate the entire process.
WHAT COVERAGE DOES MEDICARE ADVANTAGE PROVIDE?
Now that we have established what Medicare Advantage is, who is eligible to receive these benefits, and how to enroll in a Medicare Advantage plan, we will talk in general terms about what most Medicare Advantage plans cover.
Obviously, each plan or policy will be different and will have different coverage options depending on what you want your premiums to be.
In our discussion we will talk about the standard coverages of most plans. Be sure to talk to your insurance agent or broker about the details of your specific plan.
Every Medicare Advantage plan is required to include all of Medicare Part A and Part B healthcare services, but they do so with different rules, premium costs, and restrictions that affect where and how you receive your care. Each plan includes:
- Part A (Inpatient/hospital coverage), with restrictions
- Part B (Outpatient/medical coverage), with restrictions
Most Medicare Advantage plans also usually include:
- Part D (outpatient prescription drug coverage)
- Medicare Advantage Plans sometimes also offer additional benefits like dental care or routine vision care
We will talk about each of these parts of the plan in more detail so you have a thorough understanding of coverage.
Part - A
Part A is the portion of Medicare that pays for hospitalization and inpatient care.
It is covered designed specifically to cover hospital costs. Remember, that with a Medicare Advantage plan you will be limited to specific hospitals or nursing facilities at which you can be seen.
This part of your health insurance plan covers all hospital bills and costs related to hospital care including medical care in a skilled nursing facility or nursing home. It will also cover hospice care and home health services.
Any kind of inpatient medical care would fall under this category, including inpatient medical supplies and prescription drugs received while in a healthcare facility. If a patient is homebound it will pay for physical or occupational therapy. In addition, Part A also provides coverage for doctors, medication and grief counseling for terminally ill patients.
While this part of your Medicare Advantage plan covers most hospital or health facility related services, it doesn’t cover everything. When a patient is in need of medical treatment which may not be covered, providers are required to let the patient know, and have them sign a release before they receive any treatment. This will allow you to choose whether you want to pay for the service out-of-pocket or refuse the care.
If you are facing a situation where your procedure or treatment isn’t covered, do research to find out why. Communicate openly with your doctors and other healthcare providers. There may be an alternative treatment that is covered, or you may be able to file an appeal for the medical care you need.
The primary reason that hospital expenses may not be covered is because they are not deemed “medically necessary.” For instance, Medicare doesn’t usually cover custodial care in a skilled nursing facility, which includes help with activities like eating, bathing, or getting dressed. These services would only be covered if you were in the nursing home for medical treatment and required help to perform these activities.
Part - B
Medicare Advantage plans are also required to cover Medicare Part B
This part of the policy covers two things: Medically necessary outpatient services and all preventative services.
What does that mean? Medically necessary outpatient healthcare includes all the medical care needed in order to diagnose and treat your medical conditions.
This includes things like doctor visits, tests, lab work, and even medical equipment or devices.
Preventive services refer to any healthcare you receive in order to prevent illness, like the vaccines for the flu, or any healthcare services performed for early detection, like screenings and routine physicals.
How much coverage you receive for medically necessary services will depend on the Medicare option you choose, but Part B usually pays for all preventive services regardless of the plan. Be sure to confirm your coverage with your insurance provider, as every plan varies.
It’s good to know that Part B also covers durable medical equipment (DME), outpatient mental health services, transportation by ambulance, second opinions regarding medical advice or diagnosis, and even a very limited selection of prescription drugs.
Again, just as with Part A, your benefits for Part B will be dependent on a specific service area and list of providers. In order to receive all of your benefits at a lower premium and lower out-of-pocket costs, insurance plans limit where you can receive your medical care.
Part - D
In 2003, Congress passed the U.S. Medicare Prescription Drug Improvement and Modernization Act.
This law was created to modernize the Medicare program by adding a prescription drug benefit to better meet the needs of Medicare patients. In some places it is also referred to as It the Medicare Modernization Act.
Once this law was passed, Medicare patients could opt for and pay for prescription drug coverage, also known as Part D. Original Medicare does not include Part D automatically, but it requires a separate premium for this additional coverage. You should note that Part D is only available through private insurance parties. Individuals who have Original Medicare can join a standalone Prescription Drug Plan (PDP) to get these benefits.
However, in contrast, Medicare Advantage plans include Part D as part of their standard coverage. There is no additional premium for drug coverage.
Of course, each insurance company will provide a list of approved prescription drugs covered under their specific plans.
Therefore, when you select your plan it can be very valuable to know what your current prescriptions are and then check that list with the available Part D plans. In this way you can ensure that your Advantage plan covers everything you need.
Keep in mind that the Part D section of your Advantage plan only covers a certain number of drugs. As you know, new drugs are researched, developed, and manufactured every day. It is a constantly advancing and changing field. When new drugs are developed, it can take some time for these drugs to appear on your plan’s Part D list.
Prescription drugs are generally arranged in tiers. If you are a patient in need of a top-tier drug, which is often a newly-developed or very expensive medicine to manufacture, it’s possible that this will increase your premium, or you may have a larger co-pay than you are used to.
Each insurance carrier will handle this situation differently. When you are evaluating which Medicare Advantage plan is best for you, find out how each carrier designs their prescription drug coverage. We suggest that you always work out your strategy according to your own particular healthcare needs with a licensed Medicare insurance agent. They will be able to help you fully understand all of your options.
In order to make their Medicare Advantage plans as attract as possible to Medicare beneficiaries, many insurance companies also add additional benefits to their plans.
Many Medicare Advantage plans offer basic dental and vision plans for regular check-ups and routine exams. Some also offer eyeglasses, hearing aids, and gym memberships.
Additionally, there are new rules going into effect in 2019 and the insurance industry is thinking about expanding some of these additional benefits even more. Although most carriers are still working on these new benefits, some have talked about covering healthier food options, transportation to doctor’s offices, and even simple home improvements that will improve health and safety like putting in grab bars in the bathroom to prevent falls.
While none of these new benefits are in place yet, they are in the works. Again, it would be helpful to check with your agent to see if you are getting all the benefits you can from your Medicare Advantage plan.
INSURANCE PROFESSIONALS OF ARIZONA IS HERE TO HELP
In this article we have explained the in’s and out’s of Medicare Advantage plans—what they are, who is eligible, how to enroll, when you can make changes to your plan, and what the plan covers.
Hopefully, you now have a better understanding of how a Medicare Advantage can help you in your providing for your healthcare needs.
Always keep in mind that you do not have to do any of this alone. Consulting with a licensed Medicare insurance agent can allow you to get the best coverage at an affordable price. Today there are literally thousands of plans available. You can get exactly what you need in order to be protected from exorbitant healthcare expenses at a price that will fit your budget.
At Insurance Professionals of Arizona, we are experts in Medicare Advantage plans. We not only have hundreds of plans available through our network of insurance providers, but we have the knowledge and experience to help you quickly sift through them to find the one that is right for you.
If you are overwhelmed or confused or unsure, we are happy to answer any questions for you about enrolling in a Medicare Advantage plan. If you are nearing the age of Medicare eligibility, we can guide you through the process of getting enrolled at the right time.
Or perhaps you already have an existing Medicare Advantage plan but don’t really feel that it’s meeting your needs. If you are wondering what else is available and how you can get all the coverage you are seeking, we are here to help and assist you in evaluating different policies and helping you make a switch when it’s advantageous to you.
We can guide you successfully through enrollment eligibility, sign-up periods, and the various coverage options available.
We are up-to-date on the new benefits and changes to the program that will be happening in 2019 and we can help you use these changes to get the most out of your Medicare benefits.
Above all, when you work with an IPA agent, you can relax, knowing that you got all the most accurate and current information to make a decision. You will have a team of experts on your side and never be left to navigate and figure out this process alone.
Use our expertise to get the most out of your Medicare benefits.