Medicare is a federal health insurance program for eligible adults 65 and older and those younger than 65 with medical disability who qualify. The program helps with the cost of health care, but does not cover all medical expenses or the cost of most long-term care.

Medicare is made up of 4 parts. Each part helps pay different health care costs

• Part A
• Part B
• Part D
• Part C

There are two ways to receive Medicare coverage: Original Medicare (Part A and B) or a Medicare Advantage Plan (Part C). Along with Medicare you can choose to purchase Medicare Supplement Insurance (Medigap) policy from a private insurance company.

Look for an optional supplemental plan that offers additional benefits.

Original Medicare is made up of Part A & Part B:

Medicare Part A – acts as hospital insurance and helps pay for inpatient care in hospitals, hospice care, home health care and care provided in certain skilled nursing facilities.

Medicare Part B -provides medical insurance and helps cover doctor visits, procedures that don’t require overnight hospital stays and some preventative care services such as flu shots.

Note: Original Medicare does not cover most prescription drugs or custodial care, such as nursing home stays.

• Part A – If you or your spouse paid Medicare taxes while working, the federal government may pay your premium (monthly fee). If not, you can still purchase Part A
• Part B – Most people will pay a monthly premium that is based on their income and is typically paid from the monthly Social Security check.

There may be additional costs beyond the required Part A & Part B premiums such as:

• A deductible – set amount you pay every year before Medicare coverage begins
• The entire cost of services not covered by Medicare
• Coinsurance – portion of the cost for Medicare-approved services (typically 20%)
• Medicare supplement plan premium if you elect to purchase supplement insurance

Medicare Part D helps cover the cost for prescription drugs if enrolled in Original Medicare.

• Part D plans are managed by private Medicare-approved insurers. In order to receive Part D services, you must enroll in a private plan.
• Part D drug covered generally varies from plan to plan, includes commonly used brand-name and generic drugs and excludes over-the-counter medicines.

A cost-effective way to buy Part D drug coverage is through a Medicare Advantage plan (Part C).

During this time you can:

• Join a Medicare Advantage medical plan or Part D prescription drug plan
• Switch a Medicare Advantage medical plan or Part D prescription drug plan
• Change from a plan that includes Medicare Part D prescription drug coverage to one that doesn’t.
• Disenroll from a Medicare Advantage Plan

Newly elected coverage that was selected during the open enrollment period begins.

During this time, members can:

• Make a one-time election to switch Medicare Advantage plans
• Disenroll from a Medicare Advantage plan and move to original Medicare

Medicare Advantage Plan (Part C) integrates Part A, B and D coverage with additional medical benefits not included in Original Medicare.

Many Medicare Advantage plans are available through private health insurers and may include

• Routine eye and dental care
• Hearing aids and eyewear
• Wellness programs
• Discount programs for services and products, such as acupuncture and vitamins

It is important to sign up for Medicare coverage during your initial enrollment period, unless you have other coverage that is similar in value to Medicare (like from an employer). If you don’t, you may have to pay an extra amount, called a late enrollment penalty (LEP).
Late enrollment penalties:

• Are added to your monthly premium
• Are not a one-time late fee
• Are generally a lifetime penalty (some exclusions apply)
• Increase the longer you wait to sign up – they are based on how long you go without coverage similar to Medicare

The penalties for late enrollment are as follows:

• Part B late enrollment penalty (LEP): You will pay an extra 10% for each year you could have signed up for Part B but didn’t
• Part D late enrollment penalty (LEP): You will pay an extra 1% for each month (12% per year) if you don’t:

1. Join a Medicare drug plan when you first get Medicare
2. Go 63 days or more without creditable drug coverage

Health maintenance organization, or HMO
HMO requires you to choose a primary care provider, or PCP, to manage your medical needs. When you need a specialist or other provider, your PCP coordinates care and provides referrals as appropriate. The care provided, arranged and authorized by the HMO and your PCP within the HMO network is included in your benefits.

Point of Services, or POS
A POS is an HMO that lets you get certain out-of-network services at in-network costs.

Preferred provider organization or PPO
A PPO allows you to visit any health care provider of your choice although, you often pay more to see doctors outside the PPO network. Referrals are not necessary for specialist visits.

Special needs plan, or SNP
SNPs are for people with chronic illness, older adults with limited income and seniors living in a nursing home.

YES! All Medicare Advantage plans offer emergency or urgent care coverage worldwide. You may pay higher deductibles, copays or out-of-pocket maximums if out-of-network services are used.

To save money, choose a plan with a large national network of doctors and hospitals.

Anyone who is eligible for Medicare can enroll in a Medicare Advantage plan during the annual election period (October 15 through December 7) or during Initial enrollment (the seven-month window around your 65th birthday)

You can only do so in special circumstances. These include:

• Moving out of your existing plan’s service area
• Living in a facility, such as a nursing home
• Qualifying for Extra Help – receiving both Medicare and Medicaid, qualifying for Supplement Security Income or being eligible to apply for and receive financial assistance.

Medicare supplement can include Part A and Part B benefits. This helps bridge the gap between what Original Medicare covers and the total cost of medical services.

They cover all or a portion of Medicare deductibles and coinsurances and are accepted nationwide. Medicare supplement plans are guaranteed renewable, as long as you pay your premium.

You can enroll in a Medicare supplement plan anytime during the year.

There are certain times or circumstances where an insurance company can’t use medical underwriting to decide whether to accept your application. These include:

• During your Medigap open enrollment (first month that you’re 65 and enrolled in a Medicare Part B)
• Special Circumstance – Loss of Medicare Advantage or Medicare supplemental coverage

During these times an insurance company cannot:

• Refuse to sell you a Medicare supplement policy it offers
• Charge you more for a Medicare supplement policy than someone with no health problems
• Make you wait for coverage to start

• You must have Medicare Part A and Medicare Part B coverage
• Pay the private insurance company a premium for your Medicare supplement policy in addition to any Part A or Part B premiums
• Any standardized Medicare supplement policy is guaranteed renewable even if you have health problems.
• Different insurance companies may charge different premiums for the same exact policy.

Guarantee issue rights are situations where insurance companies are required to sell you a Medigap policy (Medicare Supplement Insurance) regardless of your health status. This means they can’t deny you coverage or charge you more based on your pre-existing conditions or medical history.

Outside of your Medicap open enrollment period you have guaranteed rights in the following circumstances:

• You were enrolled in an employee group health can plan that pays after Medicare and has recently ended
• You lost coverage from a Medicare Advantage plan, Program of All-Inclusive Care for Elderly, Health Care Pre-Payment Plan, other Medicare demonstration project or Medicare Select plan.
• You voluntarily disenrolled from a Medicare Advantage plan within 12 months after the effective date of enrollment
• You lost coverage from another Medicare supplement policy

YES! Medicare supplement plans purchased after January 1, 2006, do not include Part D drug coverage. Therefore, to avoid a late enrollment penalty for Part D, you can enroll in both a Medicare supplement plan and a stand-alone Part D plan.