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What is Medicare?
Medicare has
Four Parts:
- Part A
(Hospital Insurance)
Most people do not have to
pay for Part A.
- Part B
(Medical Insurance)
Most people pay monthly for
Part B.
- Part C
(Medicare Advantage Plans)
Medicare Advantage plans are
offered by private insurance
companies as an alternative
to Original Medicare; plans
are government subsidized
and regulated.
- Part D
(Prescription Drug Coverage)
Part D Plans are offered by
private companies to provide
coverage for prescription
drug costs; plans are
government subsidized and
regulated.
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Part A (Hospital Insurance)
Care in
hospitals as an inpatient,
critical access hospitals (small
facilities that give limited
outpatient and inpatient
services to people in rural
areas), skilled nursing
facilities, hospice care, and
some home health care.
Most people
get Part A automatically when
they turn age 65. They do not
have to pay a monthly payment
called a premium for Part A
because they or a spouse paid
Medicare taxes while they were
working.
If you (or
your spouse) did not pay
Medicare taxes while you worked
and you are age 65 or older, you
still may be able to buy Part A.
If you are not sure you have
Part A, look on your red, white,
and blue Medicare card. It will
show "Hospital Part A" on the
lower left corner of the card.
You can also call the Social
Security Administration toll
free at 1-800-772-1213 or call
your local Social Security
office for more information
about buying Part A. If you get
benefits from the Railroad
Retirement Board, call your
local RRB office or
1-800-808-0772.
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Part B (Medical Insurance)
Doctors,
services, outpatient hospital
care, and some other medical
services that Part A does not
cover, such as the services of
physical and occupational
therapists, and some home health
care. Part B helps pay for these
covered services and supplies
when they are medically
necessary.
Medicare
beneficiaries pay a monthly part
B premium. Starting in 2007,
that premium is based on income.
The monthly Part B premium for
2009 is $96.40 for most with
incomes under $85,000 (single)
and $170,000 (married). In some
cases this amount may be higher
if you did not choose Part B
when you first became eligible
at age 65. The cost of Part B
may go up 10% for each 12-month
period that you could have had
Part B but did not sign up for
it, except in special cases. You
will have to pay this extra 10%
for the rest of your life.
Enrolling in
part B is your choice. You can
sign up for Part B anytime
during a 7 month period that
begins 3 months before you turn
65. Visit your local Social
Security office, or call the
Social Security Administration
at 1-800-772-1213 to sign up. If
you choose to have Part B, the
premium is usually taken out of
your monthly Social Security,
Railroad Retirement, or Civil
Service Retirement payment. If
you do not get any of the above
payments, Medicare sends you a
bill for your part B premium
every 3 months. You should get
your Medicare premium bill by
the 10th of the month. If you do
not get your bill by the 10th,
call the Social Security
Administration at
1-800-772-1213, or your local
Social Security office. If you
get benefits from the Railroad
Retirement Board, call your
local RRB office or
1-800-808-0772.
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Part C (Medicare Advantage
Plans)
People with
Medicare can get their coverage
through Original Medicare
(the traditional fee-for-service
program) or from Medicare
private plans (the Medicare
Advantage program also known as
Medicare Part C). Depending on
where you live, you may be able
to enroll in a Medicare
Advantage Plan offering one or
more of the following types of
health care: HMO, PPO, PFFS, MSA.
If you choose
coverage under the traditional
fee-for-service Medicare
program, you can generally get
care from any doctor or hospital
you want and receive coverage
for your care anywhere in the
country. However, traditional
Medicare has high cost-sharing
requirements and does not
currently cover the costs of
certain services. To help pay
for uncovered benefits and to
help with Medicare's
cost-sharing requirements, many
people in the traditional
Medicare program have
supplemental insurance, known as
Medicare Supplements or
Medigap Plans (these
supplemental insurance plans
fill in gaps that Medicare does
not cover but unlike Medicare
Part C and Part D, these plans
are not part of the government
Medicare program).
Medicare
HMOs
Medicare HMOs
cover the same doctor and
hospital services as the
original Medicare program, but
out-of-pocket costs for these
services are usually different.
HMOs appeal to some people with
Medicare because they may
provide additional benefits,
such as eyeglasses, which are
not covered by the traditional
Medicare program. Medicare HMOs
may charge a premium that you
would need to pay in addition to
the Part B monthly premium.
You should be
aware that Medicare HMO
enrollees generally can only use
doctors, hospitals, and other
providers in the HMO's network.
For an additional fee, some HMOs
offer point-of-service (POS)
benefits that partially cover
care received outside the
network.
If you join a
Medicare HMO, you will usually
have to select a primary care
doctor who is responsible for
deciding when you should see a
specialist and which specialist
you should see.
Neither
Medicare nor the HMO will pay
for unauthorized visits to
specialists in the plan,
providers outside the HMO's
network, or for non-emergency
care outside the HMO's service
area.
Medicare
PPOs
Medicare PPOs,
or "Preferred Provider
Organizations," are private
health plans, much like Medicare
HMOs. HMOs and PPOs differ in
two key ways:
- Medicare
PPOs cover some of the costs
of your care if you use
doctors and hospitals
outside the network.
- Medicare
PPOs generally do not
require that you see a
primary care physician
before going to a
specialist.
Regional PPOs
became available under Medicare
in 2006. These plans are similar
to local Medicare PPOs, but
serve a larger geographic area
(either a single state or
multi-state area) and must offer
the same premiums, benefits, and
cost-sharing requirements to all
beneficiaries in the region.
Regional Medicare PPOs offer all
Medicare benefits, including the
prescription drug benefit, but
unlike traditional Medicare,
these plans have a single
deductible for hospital and
physician services and an annual
out-of-pocket limit on cost
sharing for benefits covered
under Parts A and B of Medicare.
Keep in mind that the
out-of-pocket limit will vary
depending on the plan you
select. As with local PPOs,
individuals who sign up for a
regional PPO will typically pay
more if they go to providers
outside of the network.
Private
Fee-for-Service (PFFS) Plans
Private
fee-for-service plans cover
Medicare benefits like doctor
and hospital services, much like
Medicare HMOs and PPOs. Unlike
Medicare HMOs and PPOs, private
fee-for-service plans do not
have a formal network of doctors
and hospitals. Still, not all
doctors and hospitals are
willing to treat members of a
private fee-for-service plan. If
considering enrolling in a
private fee-for-service plan,
make sure your doctor and
hospital are willing to accept
the private fee-for-service
plan’s payments for services
before you enroll. Also, be sure
you understand a plan’s benefits
and cost sharing requirements
before you enroll because
private fee-for-service plans
decide how much enrollees pay
for Medicare-covered services
and may charge higher cost
sharing for certain health care
services than the original
Medicare program. While private
fee-for-service plans are not
required to offer the Medicare
drug benefit, most do. If you
enroll in a private
fee-for-service plans without
drug coverage, you can also
enroll in a Medicare stand-alone
prescription drug plan for your
drug coverage.
Medicare
MSA Plans
A Medicare MSA
Plan is a health insurance
policy with a high deductible
coupled with a Medical Savings
Account (MSA). Medicare pays the
premium for the Medicare MSA
Plan and makes a deposit to the
Medicare MSA that you establish.
You use the money deposited in
your Medicare MSA to pay for
medical expenses. If you don't
use all the money in your
Medicare MSA, next year's
deposit will be added to your
balance. Money can be withdrawn
from a Medicare MSA for
non-medical expenses, but that
money will be taxed. If you
enroll in a Medicare MSA, you
must stay in it for a full year.
Special
Needs Plans (SNPs)
Special needs
plans are private plans that
provide Medicare benefits,
including drug coverage for
beneficiaries with special
needs. These include people who
are eligible for both Medicare
and Medicaid, those living in
certain long-term care
facilities (like a nursing
home), and those with severe
chronic or disabling conditions.
For additional
information about Medicare
Advantage plans, call
1-800-MEDICARE, or get
information about Medicare
options in your area on the
Medicare Personal Plan Finder
website,
http://www.medicare.gov/MPPF/home.asp.
Medicare Advantage and
Prescription Drugs
All companies
offering Medicare Advantage
plans must offer prescription
drug coverage in at least one of
their plans. Medicare Advantage
plans with drug coverage may
vary in their premiums,
deductibles, formularies and
cost-sharing, depending on the
type of Medicare Advantage plan
you select.
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Know What You Want from a
Medicare Plan
Whether
Original Medicare alone,
Original Medicare plus a
Medicare Supplement plan, or
a Medicare Advantage plan
is right for you will depend on
your unique needs and
circumstances. Think about what
is most important to you when
you are healthy and when you are
sick. Here are some topics to
consider:
Receiving
care from the doctor and
hospital of your choice
Under original Medicare, you can
use whichever specialists and
hospitals you choose, whenever
you need, and without a referral
from another doctor. Medicare
private plan options could limit
your ability to get care from
the doctor or hospital of your
choice, or there may be extra
charges for out-of-network care.
If provider choice is a
priority, you should consider
original Medicare with added
protection from a Medicare
Supplement insurance policy,
sometimes known as Medigap, or
from an employer-sponsored or
union retiree health plan, if
you are eligible.
Getting
coverage of additional benefits
to reduce your medical costs
If you are on a tight budget and
are willing to limit your choice
of doctors and hospitals, you
may be able to reduce your
health care expenses and get
coverage of additional benefits
through a Medicare Advantage
plan. It is important to review
the scope and limits of
additional benefits when
choosing among available plans.
It is also important to look at
how much your out-of-pocket
costs will be if you get sick.
For example, some Medicare
private plans charge a copay for
each day of an inpatient
hospital stay, while original
Medicare charges only a
deductible but no daily copays
for the first 60 days of a
hospital stay.
Maintaining
health care coverage while away
from home
Under original Medicare, you
will be covered for care
anywhere in the United States.
While private plans must cover
emergency care for members
outside the plan area, most do
not cover other health care
services while away from home.
For example, Medicare HMOs have
more restrictive networks of
doctors and hospitals that limit
coverage away from home.
Keeping
supplemental coverage from a
former employer or union
If you are considering joining a
Medicare private plan (either a
Medicare Advantage plan or a
stand-alone prescription drug
plan), you should talk to your
employer or former employer to
be sure you won't lose valuable
retiree health benefits if you
sign up for a private plan. Many
employers offer retiree health
coverage as a supplement to
traditional Medicare; some also
offer coverage through Medicare
HMOs and other private plan
options.
Coordinating with Medicaid
benefits
If your income and assets are
quite modest, you may qualify
for Medicaid benefits or other
special programs that will help
pay some of your health care
costs. For those who qualify,
Medicaid often pays for valuable
benefits, such as nursing home
care, and also pays Medicare's
premiums. If you are already
covered by Medicare and
Medicaid, you should find out
what you must pay to join a
Medicare private plan and
whether Medicaid will cover the
plan’s copayments.
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Medicare Part D (Prescription
Drug Coverage)
Medicare Part
D is the federal government's
prescription drug program that
covers both brand-name and
generic prescription drugs at
participating pharmacies in your
area. The coverage is available
to all people eligible for
Medicare, regardless of income
and resources, health status, or
current prescription expenses.
Medicare prescription drug
coverage provides protection for
people who have very high drug
costs. For more details see
What is Medicare Part D.
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