For people 65 and older, the federal government provides a health insurance program known as Medicare. You can enroll in Medicare anytime between three months before your 65th birthday and seven months after. Unless you are already receiving Social Security, you will have to sign up during this window of enrollment for the best and most timely coverage and to avoid penalties for late sign-up.
Understanding the basic options
When you enroll, there are different plans for Medicare:
Medicare Part A: Everyone who enrolls receives this coverage for inpatient hospital stays, care in a skilled nursing facility, hospice care and some other critical medical care. There is an annual deductible that you pay first, then Medicare pays a portion and you pay a percentage without an annual out-of-pocket cap.
Medicare Part B: Most people must choose whether they want to add Part B when enrolling. Part B expands coverage to certain medical services, outpatient care, medical equipment, ambulance and preventive services. In choosing Part B, you pay a monthly premium (based on your taxable income) and have an annual deductible. After you meet the deductible, you pay 20% of costs.
Medicare Part D: This is the prescription drug plan offered by the federal government. Prescriptions are NOT included in Parts A or B, so you must choose to add Part D if you want this benefit. You will pay a monthly premium, annual deductible and copays. This can vary depending on what medications you use and where you get them.
Medigap: Even with Medicare, there can be a hefty financial burden for your share of costs for service if you have major or ongoing medical issues. Medigap insurance or medical supplement companies will help pay your out-of-pocket costs that Medicare doesn’t. Consumers should compare companies offering these insurance services for premium costs and coverage.
Medicare Advantage: These plans are provided by private companies who contract with Medicare to provide Part A and Part B services. They also often include prescription plans and offer more variety in customizing plans. As examples, dental services, vision, hearing and acupuncture are NOT covered by Parts A or B but may be part of a Medicare Advantage plan. Also, there is often an out-of-pocket maximum cap which Parts A and B don’t have. The burden is on the consumer to compare plans and choose one based on fit for cost and services.
Learn more for your circumstances
Linda Clarkson, a health insurance broker with Futurity First in Medford has led free Medicare 101 workshops and webinars for several years. She says people who attend often are aware of the basic information but want to know how the options fit their individual lives. Many people express concern about coverage for their prescription drugs as well as interest in how medical supplements can lower out-of-pocket expenses, she reports. Adding services becomes a matter of comparing the many options available. “There are 27 different stand-alone prescription drug plans and half a dozen Medicare Advantage plans available in Jackson and Josephine counties,” Clarkson says.
There are also some specific rules for people who are still working and eligible for their companies’ benefits and for those who get benefits through the Veteran’s Administration or a union. Criss Garcia, manager of the Population Health Program with Asante in Medford, recommends people consult with a licensed health insurance broker as they approach 64 ½-years-old.
“These brokers represent multiple plans, and they are not tied to any particular one,” he says. “Their consultations are usually free, and they are motivated to have a lifetime relationship. They want to keep you happy and deliver you the best value, not a cookie-cutter solution.”
Well-care concept in Medicare Advantage plans
Traditional Medicare pays providers in a fee-for-service model (paid per patient rather than by their health outcome). Garcia explains that Medicare compensates providers at a fraction of the actual cost of providing care, which creates a financial loss. As a result, they usually have to limit the number of Medicare patients they accept. It also means there is little leftover for preventive health measures, he adds.
Clarkson explains that Medicare Advantage flips this proposition by investing in preventive health to avoid costly care later. “These private companies work to try to keep your health as good as it can get, then keep you healthy. Their costs go down if their members are healthier. That is why they may offer a zero-dollar copay to see a primary care doctor, or they may offer you a gym membership.”
Garcia said that providers prefer Medicare Advantage because it allows them to manage the patient according to care needs and prevention, such as diabetes education. “At Asante, we partner with a couple of Medicare Advantage plans that we feel match our values.”
Medicare Advantage networks are designed as preferred provider organizations (PPO) or health maintenance organizations (HMO). Garcia said that unlike most of the state, Southern Oregon options are about 88% PPOs versus 12% HMOs. PPOs offer a network of selected providers to choose among.
“I think it’s worthwhile to attend a free program to learn the basics about what you get in Parts A and B,” Clarkson says, “and then learn how to compare options for additional coverage.”