For those nearing the age of 65, let us be the first to wish you a happy early birthday! Party hats and cake slicing aside, you’ve probably also been receiving some (okay, a lot) of information about Medicare — and we understand it can get quite overwhelming.
When it comes to your health coverage (especially Medicare), you shouldn’t stay in the dark. There’s a lot of options — and letters — to choose from, but we hope this handy 101 guide makes this milestone decision a little easier.
What is Medicare?
Medicare is the federal health insurance program for people who are 65 years of age or older, people who have certain disabilities, and people with end-stage renal disease and amyotrophic lateral sclerosis (also known as ALS). According to the 2019 Medicare Trustees Report, Medicare provided health insurance for over 59.9 million Americans — 52 million aged 65 or older, and about 8 million younger people with disabilities.
What are the parts of Medicare?
Medicare is uniquely divided into four parts: Parts A, B, C, and D. There’s Original Medicare (Parts A and B), and Medicare Advantage (Part C). If you’re already confused, hang tight — we’re going to break it down.
Medicare Part A is hospital insurance. These benefits include inpatient hospital stays, care in a nursing facility, hospice care, and some home health care. These benefits do not cover regular doctor visits or prescription drugs. To enroll, you can get Part A directly from the government, or through a Medicare Advantage plan. (More on that later.)
Medicare Part B is medical insurance. These benefits include certain doctors’ services, outpatient care, labs, medical supplies, and preventative services. To enroll, you can get Part B directly from the government, or through a Medicare Advantage plan. (Stay with us, it’s coming.)
Together, Part A and Part B are referred to as “Original Medicare,” so you’re covered if you need to go to the hospital or just have a checkup with your primary physician. This is a bit different from what you might have been used to with your previous health coverage — so if you find you need extra coverage, there are supplemental plans to look into, as well as...
Medicare Part C, or Medicare Advantage, is privatized, all-in-one health insurance. These benefits are the alternative to Original Medicare, bundled together with Parts A, B, and usually D. These benefits also sometimes cover dental care, vision care, over-the-counter items, and other specialized health needs. To enroll, you must have Part A and Part B Medicare, and also live within the service area of your Medicare Advantage plan.
Medicare Part D is prescription drug coverage. These benefits include your prescription drugs, which are not covered in Parts A and B. To enroll, you can get Part D through a private insurance company that offers Part D coverage on its own, or through Medicare Advantage plan (almost there!).
Original Medicare or Medicare Advantage?
Deciding between Original Medicare and Medicare Advantage is a huge step, because there are a lot of factors to keep in mind. Here are a few of them:
For Medicare Part A, you usually don’t pay a monthly premium if you (or your spouse) paid enough in Medicare taxes while you were working. For 2020, Medicare Part B has a standard monthly premium amount of $144.60. So, if you opt for Original Medicare (instead of just Part A or just Part B), you can expect to pay around that much per month — unless you decide to add on Medicare Part D, or a Medicare Supplement plan, called Medigap.
Medicare Part D, or prescription drug coverage is an additional cost, with a monthly premium, yearly deductible, co-pays, and coinsurance, and is offered by private insurance companies.
Medigap, or extra health insurance you can buy from a private company to pay health costs not covered by Original Medicare, is also an additional cost, with a monthly premium, yearly deductible, co-pays, and coinsurance, and is offered by private insurance companies.
Medicare Advantage, on the other hand, offers plans with low-cost premiums — sometimes as low as $0. However, these dollar amounts will vary based on your geographic location.
Both plans have premiums, co-pays, deductibles, and coinsurance.
Original Medicare members can typically expect to pay 20% of the total cost of services.
Medicare Advantage members can typically expect to have a set dollar co-pay, so you can plan ahead and budget accordingly.
Original Medicare does not have a maximum out-of-pocket (MOOP), or the most amount of money you are responsible for paying in one year.
Most Medicare Advantage plans have a MOOP, so once you’ve reached this amount for the year, your insurance company covers your services 100%.
Network of doctors
Original Medicare members can go to any doctor that accepts Medicare.
Medicare Advantage members must visit doctors that are in the plan’s network to get the full benefit.
Who is eligible for Medicare?
People who are 65 years of age or older are eligible for Medicare. You must also be a U.S. citizen (or lawfully present), and you or your spouse must have paid Medicare taxes for at least 10 years.
For those younger than age 65, you qualify for Medicare if you have certain disabilities, end-stage renal disease and amyotrophic lateral sclerosis (also known as ALS). You must have been receiving Social Security disability benefits for at least 24 months prior to enrollment.
How can I enroll in Original Medicare?
Your 65th birthday gift is automatic enrollment into Original Medicare (Part A and Part B) if you’re receiving Social Security retirement or Railroad Retirement benefits. The government will send you a welcome letter with all of the details in lieu of a birthday card. (It’s the thought that counts, right?) If for some reason you have not received your red, white, and blue Medicare card in the mail, contact Social Security for your membership information.
Additionally, if you’re not automatically enrolled, you have the opportunity to sign up during your Initial Enrollment Period (IEP). This is a seven-month period of time when you can enroll in Medicare Parts A and B for the first time, and it begins three months before your birthday, lasts throughout your birth month, and ends three months after your birthday.
How can I enroll in Medicare Advantage?
If you’d like to enroll in a Medicare Advantage Plan, or Medicare Part C, make sure you:
Already have Medicare Parts A and B.
Have checked to make sure you live in the Medicare Advantage plan’s service area.
Do not have end-stage renal disease.
You can enroll in Medicare Advantage during your IEP. But you can also enroll during:
The Annual Election Period. This is the time in which you can change your plan or enroll in Medicare Advantage. Your benefits will go into effect on January 1 of the upcoming year.
A Special Enrollment Period, which is when certain qualifying life events occur, like retirement, losing employer-covered insurance, or even if you move out of your plan’s service area.
The Open Enrollment Period. This is the time in which those that are already enrolled in a Medicare Advantage plan have the opportunity to change plans.
Which is better: Original Medicare or Medicare Advantage?
This depends on what your priorities are — if you find having a flexible network of doctors is important to you, Original Medicare could be the better option. Or, if you like the financial certainty of a maximum out-of-pocket and bundled care, Medicare Advantage is probably your best bet. It all comes down to what you want out of your healthcare — it’s different for everyone!
Find the right Medicare plan with a simple conversation.
We know Medicare can be confusing — and Kasasa Care is here to change that. If you’re still not certain on the plan you should choose, we’d recommend you reach out to the team we’ve partnered with at KindHealth. Their licensed agents are certified in all your Medicare options, and are just a phone call away.
Talk to a licensed advisor at 866-924-8896 — it’s free Medicare expertise, right at your fingertips.