Understanding Medicare and Medicare Supplements
Most people are familiar with Medicare, but few understand the complexity of the system and the choices they are faced with making when they become eligible.
Sloan Financial has a staff of highly trained professionals, serving Charlotte, NC, Clover, SC and the surrounding metro area, that can help you make sense of Medicare and the options available to you. Call us or stop by, and let us see if you are making the most of these plans and programs.
Medicare is the government-run healthcare plan that is made available to most people age 65 and older, as well as people under 65 with certain disabilities. When an individual becomes eligible for Medicare, he or she is given two options on how to receive coverage. People are most familiar with the traditional Medicare offering which is made up of Part A and Part B.
Medicare Part A and Part B
Medicare Part A covers inpatient hospital care and some expenses for skilled nursing facilities and is provided to people at no charge, assuming they have paid Medicare taxes while working. Part B covers doctors' and other healthcare providers' services, outpatient care and preventative services. There is a premium for Part B. In 2018, most individuals will pay $134 per month, but this premium can rise significantly based on the individual’s prior two years income. 1
Medicare Part C – The Other Option
The other option individuals have when they become Medicare eligible is to purchase a Medicare Advantage plan, or Medicare Part C. A Medicare Advantage plan is technically still Medicare, but these plans are run by private insurers and may be similar to an HMO or PPO plan. Premiums for a Medicare Advantage plan can be similar to Original Medicare Part B or they can be substantially higher, depending on the benefits that are offered. With Medicare Advantage plans operating similar to traditional HMO or PPO plans, in most cases this is where the options end. In some cases optional Prescription Drug Coverage may be available if the Advantage plan does not include coverage.
Medicare Part D – Prescription Drug Coverage
The final piece of the Medicare puzzle is Part D, Prescription Drug Coverage. With traditional Medicare (Part A and Part B), Part D is not included but may be purchased for an additional monthly premium. Medicare Part D plans can vary greatly and should be reviewed based on an individual’s specific prescription needs. Even if you do not currently take prescription medication, you will still want to consider adding coverage to avoid a future penalty. Your supplemental coverage provider can explain the pros and cons and help you decide what is right for you.
Medicare Selection Process Overview
Medicare Supplement (Medigap) Overview
If a person has chosen the Original Medicare option, he or she is also eligible to purchase a Medicare Supplement plan. Medicare Supplement, Medigap or Med Supp is private health insurance that supplements Original Medicare and helps an individual pay the coinsurance, copayments and/or deductibles not covered by Medicare. Medicare Supplement is regulated by the federal government through the Center for Medicaid and Medicare Services (CMS) and requires insurers to only sell standardized plans, which means they include the same benefits and features, regardless of the company a consumer purchases the coverage through.
Even though the coverage is standardized, there are 10 different plans from which to choose that offer differing levels of coverage. This coverage ranges from the basics, Plan A, to covering almost all out of pocket expenses with first dollar coverage, Plan F, which is by far the most popular. Because of the number of plan offerings and the various state regulations, exploring the options can be quite complex. Working with a professional who can help examine all of your options and match them with your specific needs is highly recommended.
There are three ways an individual can apply for a Medicare Supplement policy. The first is during your initial enrollment period that lasts for seven months and begins 3 months before the month you turn 65, includes the month you turn 65 and ends 3 months after the month you turn 65. Coverage starts the first day of the month in which the applicant is age 65 and enrolled in Original Medicare Part B. The advantage of applying during the initial enrollment period is that applicants are not subject to medical underwriting and cannot receive an adverse underwriting decision because of a pre-existing condition. If an individual applies for Medicare Supplement insurance after the initial enrollment period concludes, the insurance carrier to whom he or she is applying can medically underwrite the individual and possibly decline the person for coverage.
The second scenario would be a Special Enrollment Period. If you delayed enrolling in Part B when you were first eligible because you had group health insurance based on current employment, but that coverage is ending, you have an 8 month SEP in which to enroll in Part B and purchase a Supplement policy without medical underwriting.
In a third enrollment scenario, an individual would be eligible for guaranteed issue, even though he or she is outside of the initial enrollment period. This involves moving from a Medicare Advantage plan to a Medicare Supplement plan within a defined period or coming off other, non-Medicare health insurance.
The decisions surrounding Medicare and its various parts and supplements is complex and should be examined very carefully before deciding which path and product is best for you. At Sloan Financial, we have a staff of professionals who can look at each person’s specific situation and make recommendations based on individual needs. As an independent agent, working with Sloan also opens the door to a number of carrier options, and we are always here to review your plan, your situation and help you make adjustments when they are needed.
Call or visit us today and let us help make sense of the Medicare Puzzle.