12 Sep 2016
How much do we really have to know about Medicare and the intricacies of the health coverage for those aged 65 and older?
The short answer is way more than we already know, and there are lots of reasons why so many people end up just buying something – anything! – and hope for the best.
Medicare is confusing, and it’s hard to get the information we need. First of all, the government doesn’t offer much in the way of counseling services to help people figure out what coverage might work best for their situation. Then there’s word of mouth: a well-meaning friend or relative may recommend a plan, not realizing it isn’t the best solution for you. There’s also so much advertising! Our mailboxes and TVs are flooded with insurance products during the Fall Open Enrollment period, each company claiming that its plan is the best, when clearly the whole process of choosing involves some very personal choices.
Here’s what you absolutely need to know. “Original Medicare” consists of Part A (hospital, skilled nursing facility, hospice, etc.) and Part B (doctors, therapists, tests, lab work, durable equipment, etc.). The government pays for some of this flat out (because when you worked, you paid into the system), but in most cases, you are expected to pay 20% of the cost: either out of pocket or through a separately purchased supplemental plan (Medigap) from a private company. And your stand-alone plan for prescription drugs, confusingly called Part D, also needs to be purchased through private insurance companies.
The other way you can get the same basic benefits (and some extras as well) is through a Medicare Advantage Plan, also known as MAPs (or MAPDs, if they include drugs – and most do). Sold by private companies in the form HMOs, PPOs and POSs, the insurance providers receive Part A, B and D allotments from the government and offer you all-in-one plans in which premiums, deductibles, co-pays, networks, lab tests, out-of- pocket maximums, drug restrictions and many, many other things that vary from plan to plan. Luckily, there are electronic tools to help you work your way through some of the variables.
Once you get a handle on these basic two structures, you might also have to take into account how your other insurance interfaces with Medicare. For example, you may still be working and have employer coverage, which might or might not continue once you retire in the form of an employer or union plan. Some people get COBRA, others get TRICARE, FEHBP and VA benefits. How do these work with Medicare? They do, but in different ways.
If you need financial assistance with your coverage, there are cost-savings programs at both the federal and state level that you may want to look into. Medicare Savings Programs (MSPs) and Extra Help pay for premiums, co-pays, and/or deductibles. EPIC is available to help people even with moderate incomes pay for expensive prescription drugs.