Welcome to HealthPocket's Medicare Guide. This guide will help you quickly understand the basics of Medicare and the decisions you will want to make so the program best meets your needs. There is no single solution right for everyone and no best Medicare plan for all enrollees. Much depends on your personal situation and preferences.
Medicare is available to people age 65 or older and also to individuals who have been receiving Social Security disability for 2 or more years. The main shorthand Medicare descriptions follow the beginning of the alphabet. They are:
You can enroll in Medicare during a seven-month period that includes three months before and after your 65th birthday. This period is referred to as your initial enrollment period. If you do not enroll when you are first eligible for Medicare Part B or Part D and do not have another form of coverage, such as through an employer, you may have to pay higher premium rates if you want this coverage later. Therefore, it is important to make sure you have coverage when you are first eligible. The government has an online Medicare application to help in the process. Once you are enrolled in Medicare you can decide on how best to manage the coverage gaps that are described in the next section.
Medicare provides a base of insurance, but it has coverage gaps. Part A has a $1,216 deductible for each benefit period. It has additional co-payments and eventually drops coverage entirely when the stay is lengthy. Part B provides preventive services at no cost, but other medical services are subject to a $147 deductible and usually 20 percent coinsurance.
People who have just Parts A and B (often referred as “Original” or “Traditional” Medicare) can face unlimited out-of-pocket expenses, and unless they purchase a separate Part D prescription drug plan, no coverage for medication. Medicare also does not cover most medical services provided outside of the United States and the costs of long term care, except under limited circumstances and for a limited time when the services are rendered right after hospitalization.
Unless they have employer paid coverage, Medicaid or some other form of support, most Medicare beneficiaries take one of two paths:
HealthPocket performed several studies on Medicare costs and benefits for consumers in 2014. One study from March 2014 compared three different approaches to obtaining Medicare coverage:
The study compared costs of the three aforementioned Medicare plan combinations for a 65-year-old enrollee making four specialist visits, two primary care visits, and taking one prescription each month for each of the three drugs Metoprolol tartrate, Furosemide, and Crestor. The AARP MedicareRx Preferred Plan was used to estimate costs for a prescription drug plan since it was the Medicare Part D plan with the highest market share in 2013. Moreover UnitedHealthcare's AARP MedicareComplete HMO, which had a $0 premium, was used to estimate costs for a Medicare Advantage plan since UnitedHealthcare had the greatest market share by firm for Medicare Advantage plans and their HMO plans had the greatest enrollment by plan type.
The study found that Medicare Advantage was the clear winner in terms of total costs, and was 19% less expensive than Original Medicare Parts A and B combined with a prescription drug plan. The costs for an enrollee using a Medigap Plan F with Parts A, B, and D were 82% higher than for a Medicare Advantage enrollee. It is important to note that the value of Medigap Plan F improves as the enrollee increases their use of hospital (Part A) and medical (Part B) services since Medigap Plan F covers 100% of the deductibles and coinsurance for Parts A and B.
A second HealthPocket study analyzed the prevalence of extra benefits in Medicare Advantage plans. It found that 97% of 2014 Medicare Advantage plans offered at least one extra vision, dental, or hearing benefit. 94% of 2014 Medicare Advantage plans had vision benefits, while 71% and 59% of 2014 Medicare Advantage plans offered dental and hearing benefits respectively. All three of these extra benefits were present in 42% of 2014 Medicare Advantage plans.
While extra benefits were widespread in 2014 Medicare Advantage plans, it is important to note that the coverage and cost-sharing associated with the extra benefits varied among plans. Therefore Medicare beneficiaries should carefully examine the summary of plan benefits before enrolling in a Medicare Part Advantage plan. Moreover if the beneficiary has a dentist or hearing or vision specialist they prefer to continue to see, then they should make sure that the Medicare Advantage plan which they select includes their preferred healthcare providers within its provider network.
A third HealthPocket study found costs for every 2014 Medicare Part D plan based on the combined costs of the top 50 drugs by units sold. The study found that the plan with the lowest cost in the most states was the Humana Enhanced (PDP), which was the lowest in 26 states and covered 48 of the top 50 drugs. The plan with the highest cost in the most states was the Aetna Medicare Rx Premier (PDP), which was the highest in 37 states and covered 41 of the top 50 drugs. On average the lowest cost Part D plan in each state covered approximately 48 of the top 50 drugs, while the highest cost Part D plan covered approximately 40 of the top 50 drugs.
On average the highest cost Part D plan in each state had 109% greater combined costs than the lowest cost Part D plan in the same state. Moreover the highest cost Part D plan in the nation had 155% greater combined costs than the lowest cost Part D plan in the nation. However consumers should note that out-of-pocket costs for a Medicare Part D plan are determined by the prescription drugs that they take. In order to estimate costs of Part C and Part D plan based on specific prescriptions, you can use the cost estimator on HealthPocket's Medicare plan comparison tool.
Medicare Advantage has increased in popularity over the past several years, and more people now take that approach than those purchasing Medicare Supplement plans. Here are some common considerations for you as you decide on which approach works for you:
These questions will help you think about your decision:
HealthPocket can help you by showing you all your choices for Medicare Advantage and Part D plans. Our website will also allow you to input information about yourself that will help us personalize the cost and ratings for each plan. Finally, when you’ve narrowed your choice we will provide you information so you can contact any carrier that interests you to make sure you fully understand the coverage they are offering before you make your purchase.
I am about to turn 65 or have just turned 65 & need to apply for Original Medicare, what information do I need for my Initial Enrollment Questionnaire?
You should prepare the following information:
How does the Affordable Care Act, also known as Obamacare, affect Medicare?
The Affordable Care Act (ACA) does not impact how you enroll in Medicare but it did eliminate some Medicare Advantage (Medicare Part C) subsidies. However, the majority of cuts have been postponed via a demonstration project sponsored by the Federal government. Currently the government spends significantly more on Medicare Advantage than for similar care under Original Medicare and it hopes to gradually decrease Medicare Advantage subsidies to reduce the cost disparity.
The ACA also expanded preventive service coverage. You can now receive certain preventive services such as mammograms or colonoscopies without a Part B coinsurance or deductible. Seniors also can get yearly “Wellness” exams at no cost. Additionally, the ACA extended the Medicare Trust fund for 12 years to at least 2029.
Lastly, the ACA impacts the Medicare Part D coverage gap, also known as the “donut hole”. You will receive a 50% discount when purchasing Part-D brand-name drugs that are covered by your plan’s formulary. The discount is applied automatically when you purchase your drug(s). The ACA also aims to close the coverage gap altogether by 2020.
If I only enroll in Medicare Part A do I have to pay an uninsured penalty?
No, you do not have to pay a penalty. Medicare Part A is sufficient to meet the ACA’s insurance requirement.
What should I do if I forgot to enroll in Original Medicare during my initial enrollment period?
During the General Enrollment Period from January 1 to March 31 of each year you can still enroll in Medicare Part A and B. However, your coverage does not begin until July 1 and you may have higher premiums as a penalty for late enrollment.
Can I purchase a Medicare Advantage or a Medicare Prescription Drug Plan on Healthcare.gov or on my state’s health insurance marketplace?
No, you cannot enroll in either a Medicare Advantage or a Medicare Prescription Drug Plan via the health exchanges established by the Affordable Care Act. You also cannot qualify for premium subsidies in the form of tax credits that certain individuals are eligible for on the health insurance marketplaces. It is also illegal for someone to knowingly sell a marketplace plan to a Medicare beneficiary. If you are already a Medicare beneficiary be wary of scams during the ACA open enrollment period and do not give your personal or Medicare information to anyone who tries to sell you a marketplace plan.
I am 65 and I have been living in the U.S. for four years with a green card. Do I qualify for Medicare?
No, Medicare’s residency requirement stipulates that you must have lived in the U.S. for five continuous years. However, plans sold on health insurance marketplaces do not have a residency waiting period and you may qualify for one.
If I am not satisfied with the Medicare plan that I choose during my initial enrollment period, what are my options?
During Medicare’s annual Open Enrollment Period (OEP) you may change your current health and drug plans for the following year. The OEP is from October 15 to December 7 of every year. Outside of the open enrollment period, if you qualify for a Special Enrollment Period (SEP), then you also have the ability to change your current Medicare plan. Situations that would trigger a SEP include certain living and coverage changes. If you are enrolled in a Medicare Advantage plan and you don’t qualify for a SEP and you wish to return to Original Medicare, you can do so between January 1 and February 14 every year, which is also known as the Medicare Advantage Disenrollment Period. Lastly, if there is a plan in your area that is rated five stars by CMS, then you can still switch to this plan between December 8th and November 30th using the 5 star plan’s SEP.
HealthPocket is a free information source designed to help consumers find medical coverage. Whether you are looking for Medicare, Medicaid or an individual health insurance plan, we will help you find the right healthcare option and save on your out of pocket healthcare costs. We receive our data from government, non-profit and private sources, and you should confirm key provisions of your coverage with your selected health plan. If you select a plan presented on our site, you will be directed (via a click or a call) to one of our partners who can help you with your application. Our website is not a health insurance agency and not affiliated with and does not represent or endorse any health plan. HealthPocket, Inc. is a wholly owned subsidiary of Health Plan Intermediaries Holdings LLC (NASDAQ: HIIQ)