Understanding Medicare
Three months before turning sixty-five, all American citizens should sign up for Medicare whether or not they plan to use the insurance at that time. Medicare taxes are deducted from payroll, and all citizens are entitled. Some employers or unions may have optioned for a Medicare Advantage or HMO program; that is the plan available to employees. If a person has never worked, she can buy into Medicare. Check with the Social Security office in your city or county for specifics and how your parents can apply.
Basic Medicare offers two parts: Part A and Part B. Part A is the hospital insurance and Part B is the medical insurance, which includes such things as doctor visits, therapy, home-health care, and any covered medical supplies. This is a fee-for-service plan, and any physician or medical supplier who accepts Medicare and is accepting new patients can be seen.
If a Medigap or supplemental policy is selected, this policy may pay all or a portion of deductibles and coinsurance fees. These policies are purchased from private insurance companies such as Blue Cross. Usually, the insured pays the deductibles and coinsurances and then sends the appropriate forms to the Medigap company, who will reimburse. This requires good record-keeping skills.
In most instances, if a person has worked forty quarters or more, he will not have a premium for Medicare Part A. If he has worked thirty to thirty-nine quarters, the premium in 2007 was $226 per month. If he worked less than thirty quarters, the premium was $410 per month. In 2007, the premium for Medicare Part B was $93.50 per month and can be deducted from a Social Security check. If a person's income was greater than $80,000 (single) or $160,000 (married), the premium may be as much as $161.40 per month depending on income.
The Prescription Plan
Medicare Part D is the prescription-drug plan. There are a number of choices available to each beneficiary, and your mom can have a different plan from your dad. They have varying deductibles and copays depending on ability to pay.
Basically, the patient pays $25 for a prescription and Medicare pays the remaining amount to the pharmacy. When the patient and Medicare combined have paid out $2,250, Medicare stops paying and the patient is responsible to pay for the entire cost of all drugs until he has paid out $3,600. This is affectionately known as the Donut Hole. Once the patient has paid out the $3,600, Medicare will kick in again and pay 95 percent of the cost of the medications for the rest of the year. On January 1, the slate is cleared and the process begins again.
The key is to find a pharmacy with low costs for prescription drugs to keep from reaching the Donut Hole. While in the Donut Hole, patients pay the Medicare-negotiated costs for their drugs, but these may still be prohibitive on fixed incomes. Using generic drugs and ordering larger amounts such as ninety-day supplies from mail-order pharmacies can help keep costs down and avoid or delay reaching the Donut Hole.
Medicare Advantage Plans and HMOs
The Balanced Budget Act of 1997 split the Medicare program into multiple-delivery systems by creating Medicare Part C, which was also known as Medicare+Choice. The Medicare Modernization Act of 2003 changed the name to Medicare Advantage. This delivery system broadened its horizon to provide Medicare coverage under new plans. These include HMOs (health maintenance organizations), PPOs (preferred provider organizations), and new mechanisms known as medical savings plans (MSAs).
One of the most well-known HMO plans is Kaiser Medicare. Others include Secure Horizon's and plans run by insurance plans such as Blue Shield, Aetna, and Blue Cross.
In 2006, PPO plans began to appear, many primarily geared for specific beneficiaries such as those in nursing homes and others who have Medicare and Medicaid.
All of these plans must provide beneficiaries with the same level of coverage that is available to traditional Medicare beneficiaries. They may also include other options and may (or may not) charge an additional premium for those options. These options can include dental care, vision, and hearing, including hearing aids. Most also encompass the Part D prescription-drug plan; therefore, no additional Part D choice would be necessary. Deductibles and coinsurance charges can be less than those paid under traditional Medicare, and premiums can be reduced.
Choices are not as open as with the traditional plan. You must live within a service area of the Advantage Plan. A PCP is chosen from a network of physicians and all care is managed by the PCP. Second opinions, procedures, treatments, and visits to specialists must be preauthorized by the PCP.
Open Enrollment
Each year, open enrollment begins November 15 and continues through December 31. This is the only time of the year when changes can be made to Medicare plans. On January 1, choices made are locked in until the following November 15, when open enrollment begins again. In past years, this enrollment period was longer, and several years ago, plans could be switched on the first of each month if desired.
Part D prescription plans can only be changed during open enrollment as well. All Medicare plans and Part D options for the next year are available for comparison on the Medicare website:
