The Medicare Maze

. October 1, 2015.
medicare_maze

by Chris Watson

Starting in 2011 one person became eligible for Medicare every eight seconds;  according to AARP.  Medicare, created in 1965, has become the most ubiquitous public-private venture in the country.  With its dizzying array of letters (Parts A,B,C,D), acronyms (IEQ, MSNs, EHRs, MTM, SEP), Medicare can seem too large and cumbersome to manage.

“It doesn’t have to be hard,”  says Daniel Trombley, Senior Coordinator of Medicare Plans at Promedica.  “What people naturally fear is the unknown. To first conquer that fear it is important to evaluate your health care needs.”  At 18 to 24 months before retirement it is a good idea to looks at your health care portfolio.  Trombley recommends asking some basic questions.  “Will I be traveling?  Will I have any coverage from my former employer?  Am I going to continue to work after 65?  Do I feel I need a supplement or advantage plan? Above all,”  he states emphatically, “start with the government website.  Once you get past the home page it is a wealth of good, reliable information on starting or changing your Medicare coverage.”

Eligibility is remarkably straight forward.  With only a few exceptions, you are eligible for Medicare at age 65.  If you continue to work and are covered by an employee plan you may continue to use that plan until you choose to retire.  After age 65 and upon your exit from the employer health plan you will be granted a SEP (Special Election Period) to sign up for Medicare for the first time.  There are some exceptions with additional rules for both eligibility and sign up period but for the lion’s share of people Medicare is available at age 65.

The biggest surprise most people find is that there are costs associated with Medicare. Medicare is a 80/20 style insurance with deductibles, co-pays, and a monthly premium.  You may also have to pay additional money for a drug coverage program (along with its associated premiums and co-insurance costs).

SELECTING A PLAN

The second issue people run into is the alphabet soup of Medicare Plans. If you understand your needs and financial circumstances this decision is not as intimidating as it first appears.  It breaks down to original Medicare or Medicare Advantage.  Original Medicare consists of Part A (Hospital Insurance) and Part B (Medical Insurance). You will usually pay a monthly premium for Part B. Medicare provides the coverage directly.  For drug coverage you also need to join a Part D plan (Medicare Prescription Drug Plan), run by a private company and approved by Medicare. This cost will be in addition to your other premiums.

Part C, Medicare Advantage Plans, cover both part A and B but are run by private insurance companies approved by Medicare.  Typically you will pay a higher premium for Part C plans but they provide extra coverage.  Many Advantage plans also include Part D drug plans.

It all goes back to understanding and, if possible, anticipating needs and financial stability.  Beyond the basic choices, many people elect to enroll in a Medicare Supplement.  Medicare Supplements, or Medigap, are plans that are typically more expensive than Advantage plans but offer many more services and a significant level of coverage above an Advantage plan.

“The bottom line,”  says Trombley, “is that what is right for Bob may not be right for Betty.  It is important to realize that Medicare has many, many options to meet individual needs.”  These options may seem confusing but they are available to construct a Medicare plan that fits the individual. For more information start with www.Medicare.gov.

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