Understanding Medicare Health Insurance
Betty Chaffee, PharmD, is owner and sole proprietor of BetterMyMeds, a Medication Management service devoted to helping people get the maximum benefit from their medications.
Signing up for Medicare health insurance can seem complicated. Well, it can BE complicated. If you or someone you know is nearing the magic age of 65, it's probably time to start thinking about it. Some folks can continue to use their employer-based health insurance after age 65, but most will turn to Medicare. Medicare was the first insurer to stress the importance of Medication Management for certain beneficiaries, and is one of the only insurers who routinely cover the cost of this valuable pharmacy service. We'll talk about what Medicare is, who can use it, what options there are, and where to look for more help.
What is Medicare?
Medicare is the government-funded program that provides healthcare for those who are 65 years of age and older. It also covers some younger people with disabilities, and with severe kidney disease. It's directed by the federal government so it's different from Medicaid, which is a state-directed program. Medicaid is also health insurance, but provides for low-income adults and children, pregnant women, and people with disabilities. There is some overlap between the two programs, and there are people who are covered by both programs at the same time.
Unless you become eligible for Medicare earlier, be sure to plan ahead so you can enroll at the right time. Medicare offers a 7-month window for enrollment; the 3 months before your birth month, your birth month, and the three months after. Missing the initial enrollment window can result in higher premiums, but you can still enroll later during the annual enrollment period from October 15 through December 7.
The ABC's of Medicare plans
Medicare identified its plans with letters of the alphabet. Some parts of Medicare are required, others optional. Some are essentially the same for everyone, others have variety of choices. That's where the complexity comes in.
Medicare Part A is essentially hospitalization insurance. When you apply for Medicare you will automatically be enrolled in Part A. It covers the majority of hospital costs, and some home care and other post-hospitalization costs.
Medicare Part B is optional. It covers outpatient costs, doctor's fees, and preventive services.
Medicare Part C is also known as "Medicare Advantage". This plan is more like an HMO or PPO, and is offered through private insurance companies approved by Medicare. Generally, Medicare Part C covers services provided by traditional Part A and B plans - if you have Part C there's no need for Parts A and B. Those with Part C pay one monthly premium to cover specific services. Some plans cover a multitude of services, from eye care to hospitalization, from prescription drugs to hospice care. Others cover a more limited scope of services. It's important to look closely at the coverage provided to make sure your policy will cover your needs.
Medicare Part D is prescription drug coverage. Unless you have prescription drug coverage from another source, you must sign up for Medicare Part D when you initially enroll in Medicare. If you choose not to enroll in Part D at first but then sign up later, there'll be a higher monthly premium for coverage. We'll talk in more detail about Part D in a separate article.
Medicare Supplemental Insurance - Also known as "Medigap" policies, these are also designated with letters, from Medigap Plan A all the way through Medigap Plan N. Traditional Medicare health insurance (parts A and B described above) covers the majority of healthcare costs for beneficiaries, but the uncovered cost (co-pays and deductibles) can go up pretty quickly during hospitalization or when there are multiple doctor's visits. Medigap policies cover some or all of the costs not covered by traditional Medicare insurance. As with Medicare Part C, Medigap policies differ widely from one another in cost and coverage, and their availability varies from state to state. Medigap policies are optional, but may go up in price if enrollment is delayed beyond the original eligibility period. The most objective information can be found on the Medicare website, but there's also a nice summary of different plans here (just be aware that this is an insurance company website and expect to see lots of ads suggesting you "call now").
Visit our online resources for more information about Medicare, and links to many more topics of interest. And add your comments below or Contact Us at BetterMyMeds with questions!
Originally published July 31, 2019, revised September 25, 2019