Medicare MinuteMarch 2017
We teach hundreds of Medicare education classes a year all over Maricopa County, but folks still call us with questions, which is great! Some questions we get, have to deal with names of the parts of Medicare. So let’s clarify names, parts, and plans.
Parts of Medicare:
Part A is hospital coverage.
Part B is medical services.
Part C is an all-in-one-plan called Medicare Advantage. This is when you combine Part A, Part B, and (most of the time) Part D all in one plan.
Part D is an independent prescription drug plan to go with original Medicare and a Medicare Supplement (or Medigap).
Part C of Medicare is when Medicare contracts a private plan to provide medical services. You will replace your original Medicare with one of these Medicare Advantage plans. These are the network plans offered in a geographic area. These all-inclusive plans cover doctors, hospital, labs, diagnostics, x-rays, and usually prescription drug plan premiums. Thus, many folks refer to these Part C Medicare Advantage plans as “All-In-One” plans. These plans typically have co-pays and co-insurance for services. You will choose a Primary Care Physician, and you can only visit plan-participating medical providers in your network for medical services.
Medicare Supplements (or Medigap) is when you have Medicare as your insurance and select a Medicare Supplement plan to cover the balance,after Medicare receives and processes the bills from your medical providers. This is why these Medicare Supplement plans are referred to as Medigaps. They cover the leftover portion (gap) of the bill after Medicare process the bill, pays its portion of the bill, then Medicare automatically sends the balance of the bill to your Medigap. Your Medicare Supplement (or Medigap) will send a second payment to your medical provider paying the balance of your bill.
The issue: there are many Retiree Group Insurance plans that will contain the word “Supplement”, but the only “Medicare Supplement” plan is a Federally Standardized Medigap plan.
Another question we get is “when can I change plans?”
For Medicare Advantage Plans and Independent Part D Prescription Drug Plans, you can change once a year during the Annual Election Period (Open Enrollment). This occurs
October 15th through December 7th each year. You can shop your current plan for any new changes for the new year or simply compare your plan to other plans in your geographic area. If you elect to change to another plan, your new plan will start January 1st of the new year. Keep in mind that these plans are sensitive to where you live. The Part D drug plans asks no medical questions, but the Medicare Advantage plans only ask one question; do you have End Stage Renal Disease (kidney dialysis)? This one chronic condition can keep you from switching from plan to plan.
For Medicare Supplement Plans (Medigap), you can change any month of the year. While Medicare never asks any medical questions in order to switch from plan to plan, the Supplement Plan (Medigaps) must ask medical underwriting questions in order to qualify to switch. In other words, you need to be healthy in order to switch. Most (but not all) of these Medigap plans require that you have no chronic conditions in order to switch.
Also remember that there are many Medicare Supplement (Medigap) carriers and plans to choose from. Most folks choose a Plan F or a Plan G, as these two plans are very popular. Here is a quick list of all available Medicare Supplement plans; A, B, C, D, High F, F, G, K, L, M, and N.
If you are a client of American Retirement Advisors we will give you a reminder in September that the Annual Election Period is upon you and assist with researching your options!