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/// Posted byAviva Sapers & Peter Stoner

Whether your 65th birthday is fast approaching or decades away, it pays to understand the basics of how Medicare works and what it does and does not cover—and then plan accordingly for any additional coverage that you may need in retirement.

Enrolling in Medicare can be more complicated and frustrating than many might expect, and the rules and regulations are changing.

Parts A & B (Original Medicare): Applying for Medicare A/B is handled through Social Security and can be administered on-line rather than going to a Social Security office. An on-line Social Security account will require setting up a username and password and may require the answering of “security questions” based on credit bureau information—some of which can be very specific and based on older data they have on record. Unfortunately, this can sometimes result in failed attempts and needing to go to a Social Security office to complete the enrollment process.

Medicare Part A is used for hospital insurance and covers inpatient stays at medical facilities, as well as costs of hospice care, home health care, and nursing homes (which are limited). If you will be spending the remainder of your life in a nursing home, Medicare will not cover it. Part A has a per “benefit period” deductible of $1420 in 2020. A new benefit period begins after a beneficiary has been released from the hospital for at least 60 days, meaning the deductible can be incurred multiple times throughout a year.

Part A has a $0 premium for most people, but will only pay for a maximum of 100 days of nursing home care (after certain conditions are met). After 20 days of full coverage, a significant daily co-pay is required for days 21-100 at skilled nursing facilities.

Medicare Part B provides medical insurance to help cover the costs of physical therapy, physician visits, durable medical equipment costs, and other medical services, such as lab tests, and screenings.

Part B requires a monthly premium based on income level, along with an annual deductible of $197 in 2020. It also requires a co-pay of 20% of costs.  

Part C (Medicare Advantage Plans): These Medicare-contracted plans are offered by insurance companies with a wide assortment of greater coverage options than what is offered through Parts A & B. Switching from Original Medicare to Medicare Advantage, or vice versa, can be done during the Medicare Open Enrollment Period (October 15 – December 7) every year, for an effective date of January 1.

Provider networks, premiums, copays, coinsurance, out-of-pocket spending limits and types of coverage will vary greatly based on the plan you choose.

Medicare Supplement Plans: Also called “Medigap” Plans, are used to address gaps in Part A & B coverage. They can help pickup copayments, coinsurance fees, and deductibles not otherwise covered by Original Medicare.

Medigap Plans require the payment of premiums along with Plan B premiums to keep the policy in effect. None of these plans cover prescriptions, which can be purchased by taking a separate “stand alone” Part D plan.

Medicare Part D (Prescription Drug Plans):  Participants in Original Medicare can purchase Part D as a stand-alone, tiered prescription drug plan.

Part D premium payments are required along with Part B premiums. Medicare’s website can determine the appropriate Plan D level for you based on your medication requirements at: www.medicare.gov/find-a-plan. You can also get help from SHINE Councilors at Senior Centers or brokers who specialize in Medicare products.

This is just the bare-bones of Medicare plans and enrollment, additional rules, regulations, and conditions will apply. Enrolling and navigating the Medicare system can be unwieldy and challenging. We highly recommend that you call us early and plan ahead to determine what you’ll need, what you should expect, and whether you should look into supplemental coverage options around long-term care and projected cost maintenance.

As always, we are here and ready to help you secure the best path forward.  

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