By Robyn A. Friedman
City & Shore PRIME
If you’re eligible for Medicare, you don’t need a reminder from us that it’s open-enrollment time. More than likely, your mailbox has been overflowing with solicitations from insurance companies looking to sell you supplemental or Advantage plans.
But if you’re a baby boomer approaching age 65, you might not be as familiar with the Medicare program. You may not know, for example, that Medicare coverage is not free – you must pay for parts of it. Or that the dreaded donut hole is gone.
“There are some changes taking place next year,” said David Bruns, a spokesman for AARP Florida. “And Medicare issues, like all health-insurance issues, can be mind-numbingly complicated and bewildering for people.”
Here are six things you need to know about Medicare and the changes for 2020:
- Medicare is comprised of four parts. Part A helps pay the cost of hospital stays, care in a skilled nursing facility, hospice care and some home-health care, as well as medication administered to inpatients. Part B helps pay doctors’ bills, as well as outpatient care, medical supplies and preventive services. Parts A and B are often referred to as “Original Medicare.” Part C plans are known as Medicare Advantage Plans, and they are private plans that are an alternative to Original Medicare. They often include prescription drug coverage. We’ll get back to Part C plans later. Part D plans are private plans that add prescription drug coverage to Original Medicare.
- If you are already receiving Social Security retirement benefits when you turn 65, you do not need to apply for Medicare; you will be enrolled automatically in Parts A and B and will be covered the first day of your birthday month. If you do not already receive Social Security, then you need to sign up during a seven-month enrollment period that starts three months before the month of your 65th birthday and ends three months after that month. If you fail to sign up then, you must pay a penalty unless you have another form of health coverage. Special rules apply to those who are covered by an employer’s group health-insurance plan, on a COBRA plan or in the military, so check with an advisor.
- Medicare is not free. While Part A is usually free if you or your spouse paid Medicare taxes while working, you’ll have to pay a monthly premium for Part B. The amount varies based on your income and whether you receive Social Security benefits. You must pay for Parts C and D, which are private plans.
- Parts A and B only cover 80 percent of usual and customary medical costs, so many people purchase a Medicare Supplement plan, also called Medigap, which covers the balance. The cost depends on your age, sex, zip code and the plan you select.
- The donut hole, the gap in coverage for prescription drugs, has been eliminated. But that doesn’t mean you shouldn’t shop around for a Part D plan. During open enrollment, make a list of your medications, and check the formulary for each Part D plan you’re considering to make sure they’re covered – and at a competitive price.
- Part C plans, the private alternative to Parts A and B, often include a lot more than Original Medicare. They may include prescription drugs, vision care, dental care, hearing aids, fitness center memberships and more – and they may have premiums as low as $0. But while these plans are popular, they’re also risky. If your preferred healthcare provider or hospital is not in-network, and you’re treated by a provider outside the plan, you could face high medical bills. “If you’re shopping for a Medicare Advantage plan, you may find that these plans are offering a lot of new bells and whistles,” says Eleanor Laise, a senior editor at Kiplinger’s Personal Finance. “Think about the factors that matter most to your health and finances. A plan with a low premium and a free gym membership might sound great, but if it doesn’t give you access to your favorite doctors and hospitals or cover all your medications, it may be more costly in the long run.”
If you’re in the market for Medicare coverage, don’t wait until the last minute. There’s a lot to learn, and you need to allow enough time to educate yourself as well as shop around for the best supplemental and Part D plans.
The Medicare website (Medicare.gov) has been improved and provides all the information and resources you need. You can also search for plans on that site. Additional information is available in AARP’s Medicare Resource Center, at aarp.org/health/medicare-insurance, or from Kiplinger, at kiplinger.com/article/retirement/T039-C000-S004-navigate-2020-medicare-changes-open-enrollment.html. Medicare help is also available free from SHINE (Serving Health Insurance Needs of Elders) volunteers. Visit floridashine.org or call 800-963-5337 for information.