Navigating Medicare, open enrollment and the supplements available can be overwhelming. Our free guide gives you everything you need to know to choose the right Medicare option for you.
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If you’re already a Medicare beneficiary and want to re-evaluate your coverage or you are turning 65 and are considering enrolling, here’s what you should know about Medicare, its supplements, common mistakes when enrolling and more.
Original Medicare, as opposed to Medicare Advantage, is composed of two categories: Part A and Part B. Part A is hospital insurance and typically covers hospital stays, skilled nursing facility stays, hospice and some home healthcare services.
You’re eligible for Part A if you:
In most cases, you don’t have to pay a premium to enroll because you’ve paid into Medicare through tax deductions from your paychecks.
Keep this in mind: While there is no premium to enroll in Part A, there is a $1,408 deductible you need to meet before the insurance begins to pay for services.
Medicare Part B is medical insurance and covers doctor’s visits, outpatient care, mental health counseling, physical therapy, chemotherapy, durable medical equipment and preventative services like vaccines and screenings.
Yes, you need to pay a premium to enroll in Part B. In 2019, the premium for Part B was $144.60 per month, but may be higher if your income is higher than $87,000 per year.
Part B has an annual deductible of $198 per year, and once you meet your deductible, you’ll have to pay 20% of the Medicare-approved amount for most doctor services, outpatient therapy and durable medical equipment.
As part of its effort to encourage preventative care, Medicare covers the cost of vaccines for these conditions:
Medicare Advantage plans (Part C or “MA Plans”) are offered by private companies approved by Medicare. Medicare Advantage plans provide all of your Part A and Part B coverage. They also offer extra coverage for things like hearing, vision, dental or health and wellness programs.
Because Medicare Advantage is an optional program, you might be wondering if you need it. If you’re considering joining a Medicare Advantage plan, remember that the plan must cover all the things Medicare Parts A and B cover. The difference, as noted above, is that it covers services Parts A and B may not cover — like dental care or hearing. If you choose a Medicare Advantage plan that covers prescription drugs, you cannot buy a separate Medicare drug plan.
Types of Medicare Advantage plans include:
Medicare Part D is prescription drug coverage. According to Medicare, most Part D plans have their own unique list — called a formulary — of drugs they cover. Most plans cover generic and prescription drugs.
If you choose a Medicare Advantage plan, you cannot enroll in a Medigap/supplemental insurance policy.
If you take prescription drugs, Medicare Part D will be an important consideration as you evaluate your options. You can receive prescription drug coverage either through Medicare Part D or through a Medicare Advantage plan.
If you receive chemotherapy, dialysis or any kind of injectable or intravenous drug at an outpatient facility, Medicare Part B will cover those costs.
Part D does not cover over-the-counter medications like antacids or pain relievers. Like Medicare Advantage, Part D is optional. However, the National Council on Aging points out that even if you don’t regularly take prescription medication, you should have some form of prescription drug coverage in the event your health status changes.
Part D plans are offered by insurance companies and other private companies approved by Medicare.
You may not need Medicare Part D if you qualify for creditable coverage like:
The costs for your drug plan vary based on:
You’ll need to pay a premium and an annual deductible. A Part D plan can’t impose a deductible higher than $415 per year.
The Donut Hole — or the coverage gap — happens when you and your drug plan have spent a certain amount of covered prescriptions. In 2019, the amount you would have to spend to enter the gap was $4,020.
Your Part D plan will identify which pharmacies you can use. If you want to keep the pharmacy you currently use, make sure it’s included in the Part D plan you choose. Each Part D plan will have a list of accepted pharmacies. If you want to ensure your pharmacy is included, you can call your pharmacy and ask, call your plan or call 1-800-633-4227.
Starting in 2019, most plans can immediately remove brand name drugs from their formularies and replace them with a generic equivalent. If a plan adds a new generic drug, it can change the cost or coverage rules for the brand-name medication. If your plan changes its medications, you’ll get information about any changes after they’re made.
If you find your medications are not covered, you should start by contacting your plan to ask why, says the National Council on Aging. When you get an answer, you can either pay full price for your medication, ask your doctor to switch to a similar drug that is on your plan’s formulary or ask your plan for an exception. If you want to ask for an exception, you’ll need to write your plan and ask. Your doctor will also need to send a statement saying the drug you’re asking for is medically necessary. If your request is denied, you can file an appeal.
Medicare supplements — called Medigap plans — help cover some of the costs Medicare doesn’t cover like copayments, deductibles and coinsurance. Some Medigap policies will also cover medical care if you travel outside the U.S. Here’s what to consider if you’re evaluating a Medigap plan:
The COVID-19 pandemic has highlighted the necessity of telehealth. In response, Medicare has temporarily expanded its coverage of telehealth services. Medicare has also waived restrictions on who can practice telemedicine during the pandemic. This means nurse practitioners, physician assistants, physical and occupational therapists can conduct telehealth visits.
Medigap plans C and F are being eliminated in 2020. However, if you are enrolled in Medicare Part A by December 31, 2019, and you have a C or F plan, you can continue to keep it. The C and F plans were among the most popular because they covered the Part B deductible. If you enroll in Medicare on or after January 1, 2020, you will have to choose a different Medigap supplement.
Medicare Savings Accounts (MSA) combine high deductible insurance plans with a medical savings account. The MSA options are offered by Medicare-approved companies and the medical savings account is used to pay for healthcare costs.
According to Medicare, MSAs cover all services Medicare Advantage plans cover and may cover additional services like dental or vision. MSAs don’t cover prescription drugs.
The highest-allowed deductible for MSAs, according to CMS, will be $13,400 in 2020. PBS columnist Phillip Moeller points out that if you don’t have any chronic health conditions, an MSA may be a good option for you.
If you have Medicare parts A or B, it does not cover the following:
Choosing a Medicare plan for your needs can be a confusing process. To help, the Medicare Rights Association put together these top mistakes people make when selecting a plan:
You’ll want to enroll in Medicare during your initial enrollment period (IEP). Your IEP runs from the three months before you turn 65 to the three months after. If you don’t sign up during your IEP, you can enroll during Medicare’s general enrollment period from January 1 to March 31. If you enroll during the open enrollment, however, your premiums for Part B will likely cost more.
Medicare has a special enrollment period that allows you to sign up for Medicare when you stop working or you lose your health insurance coverage without a late penalty. But you can only use the special enrollment period when you have insurance from your employer or for the eight months after you no longer have it.
For every year you delay enrolling in Part B, your premium may increase by 10%. If you still have insurance from your employer or are still under your special enrollment period, the late penalty won’t apply.
For every year you delay enrolling in Part D, your premium may increase by 1%. You won’t have to pay the penalty if you can show you have drug coverage as good as that provided by Medicare.
Medigap policies pay some of the out-of-pocket costs that Medicare doesn’t cover. Depending on your location, you may be able to choose from 10 Medigap plans. The best time to purchase a plan is during your Medigap open enrollment period, which is the six-month window that starts when you have enrolled in Medicare Part B.
Your out-of-pocket costs can include:
If you travel within the U.S. or to its territories, you’ll be covered at any facility that accepts Medicare for routine or emergency care. Medicare generally doesn’t provide coverage if you’re traveling outside the U.S. except if you’re on a ship within six hours of a U.S. port, or if for example, you’re traveling to Alaska and need medical attention in Canada during your trip.
Some Medigap policies may offer coverage if you travel overseas, however, there is no coverage for prescription drugs (Part D or otherwise).
Medicare scammers make their money by obtaining your personal information and using that to file false claims. Scammers typically employ the following tactics:
If you receive a phone call from someone claiming to be from Medicare and if they ask for your Medicare information or financial information, hang up.
Medicare will only call you if you are already a member of a Medicare or drug plan or if you called 1-800-MEDICARE and asked a customer service representative to call you back. The Medicare agent who helped you join a plan can also call you.
Only give your personal information — like your Medicare number — to doctors or insurers acting on your behalf.
When you receive healthcare services, record the date and services on a calendar and compare the statements you receive to what you recorded. If you are billed for services you did not receive or receive a suspicious phone call from someone claiming to be from Medicare, hang up and call 1-800-MEDICARE to report them.
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