Medicare 101
What is Medicare?
Medicare is health insurance for people 65 years or older, under age 65 with certain disabilities, and any age with end-stage renal disease (ESRD) or Lou Gehrig's disease. Medicare has four parts -- Part A, which is hospital insurance, Part B, which is medical insurance, Part C, which is Medicare Advantage Plans, and Part D, which is Prescription Drug Coverage.
The different parts of Medicare:
Part A: Hospital Insurance:
Part A is hospital insurance that helps cover inpatient care in hospitals, skilled nursing facility, hospice, and home health care.
What does Part A cover?
- Inpatient care in hospitals (such as critical access hospitals, inpatient rehabilitation facilities, and long-term care hospitals)
- Inpatient care in a skilled nursing facility (not custodial or long term care)
- Hospice care services
- Home health care services
- Inpatient care in a Religious Non-medical Health Care Institution
What Is Part B (Medical Insurance)?
Part B helps cover medically-necessary services like doctors' services, outpatient care, home health services, and other medical services. Part B also covers some preventive services. Check your Medicare card to find out if you have Part B.
How Much Does Part B Cost?
- If you have Part B, you pay a Part B premium each month. Most people will pay the standard premium amount. Social Security will contact some people who have to pay more depending on their income. If you don't sign up for Part B when you are first eligible, you may have to pay a late enrollment penalty.
How Do I Get Part B?
- Some people automatically get Part B. Others need to apply for it.
What Does Part B Cover?
To find out if Part B covers something specific, visit Your Medicare Coverage. Part B covers two types of services:
- Medically-necessary services — Services or supplies that are needed to diagnose or treat your medical condition and that meet accepted standards of medical practice.
- Preventive services — Health care to prevent illness (like the flu) or detect it at an early stage, when treatment is most likely to work best.
Medicare Advantage (Part C)
A Medicare Advantage Plan (like an HMO or PPO) is another Medicare health plan choice you may have as part of Medicare. Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare.
Different Types of Medicare Advantage Plans:
- Health Maintenance Organization (HMO) Plans
- Preferred Provider Organization (PPO) Plans
- Private Fee-for-Service (PFFS) Plans
- Special Needs Plans (SNP)
How Much Does a Medicare Advantage Plan Cost?
In addition to your Part B premium, you usually pay one monthly premium for the services included. Each Medicare Advantage Plan can charge different out of-pocket costs. Your out-of-pocket costs in a Medicare Advantage Plan depend on:
- Whether the plan charges a monthly premium.
- Whether the plan pays any of your monthly Part B premium.
- Whether the plan has a yearly deductible or any additional deductibles.
- How much you pay for each visit or service (co-payments or co-insurance).
- The type of health care services you need and how often you get them.
- Whether you follow the plan’s rules, like using network providers.
- Whether you need extra benefits and if the plan charges for them.
- The plan’s yearly limit on your out-of-pocket costs for all medical services.
When Can You Join?
- Between October 15 – December 7, Medicare recipients can join, switch, or drop a Medicare drug plan. The change will take effect on January 1 as long as the plan gets your request by December 7.
- When you’re first eligible for Medicare, you can join during the 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.
How to Switch Your Medicare Drug Plan
- You can switch to a new Medicare drug plan simply by joining another drug plan during one of these times. You don’t need to cancel your old Medicare drug plan or send them anything.
- Your old Medicare drug plan coverage will end when your new drug plan begins.
- If you want to join a plan or switch plans, do so as soon as possible so you’ll have your membership card when your coverage begins, and you can get your prescriptions filled without delay. You should get a letter from your new Medicare drug plan telling you when your coverage begins.
How to Drop Your Medicare Drug Plan
- If you want to drop your Medicare drug plan and you don’t want to join a new plan, you can do so during one of these times.
- You can disenroll by calling 1-800-MEDICARE.
- You can also send a letter to the plan to tell them you want to disenroll.
- If you drop your plan and want to join another Medicare drug plan later, you have to wait for an enrollment period. You may have to pay a late enrollment penalty.
What Does a Medicare Advantage Plan Cover?
- In all types of Medicare Advantage Plans, you’re always covered for emergency and urgent care. Medicare Advantage Plans must cover all of the services that Original Medicare covers except hospice care.
- Original Medicare covers hospice care even if you’re in a Medicare Advantage Plan. Medicare Advantage Plans aren’t supplemental coverage.
- Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D).
How Do I Get Medicare Advantage Plan?
- You must have Medicare Part A and B
- You must live in the plan's coverage service area
- You must not have End-stage renal disease (ESRD)
- Not all Medicare Advantage Plans work the same way, so before you join, take the time to find and compare Medicare Health Plans in your area.
- SBHIS agents specialize in helping you navigate through these choices and finding the plan that best suits your needs. All at no cost to you, call now 1(888)-988-8072. One call does it all!
Medicare Prescription Drug Coverage (Part D)
Medicare offers prescription drug coverage to everyone with Medicare. If you decide not to join a Medicare drug plan when you’re first eligible, and you don’t have other creditable prescription drug coverage, or you don’t get Extra Help, you’ll likely pay a late enrollment penalty.
To get Medicare prescription drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered.
2 Ways to Get Medicare Drug Coverage:
- Medicare Prescription Drug Plans. These plans (sometimes called “PDPs”) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
- Medicare Advantage Plans (like an HMO or PPO) or other Medicare health plans that offer Medicare prescription drug coverage. You get all of your Part A and Part B coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.
When Can You Join?
- Between October 15 – December 7, Medicare recipients can join, switch, or drop a Medicare drug plan. The change will take effect on January 1 as long as the plan gets your request by December 7.
- When you’re first eligible for Medicare, you can join during the 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.
How to Switch Your Medicare Drug Plan
- You can switch to a new Medicare drug plan simply by joining another drug plan during one of these times. You don’t need to cancel your old Medicare drug plan or send them anything.
- Your old Medicare drug plan coverage will end when your new drug plan begins.
- If you want to join a plan or switch plans, do so as soon as possible so you’ll have your membership card when your coverage begins, and you can get your prescriptions filled without delay. You should get a letter from your new Medicare drug plan telling you when your coverage begins.
How to Drop Your Medicare Drug Plan
- If you want to drop your Medicare drug plan and you don’t want to join a new plan, you can do so during one of these times.
- You can disenroll by calling 1-800-MEDICARE.
- You can also send a letter to the plan to tell them you want to disenroll.
- If you drop your plan and want to join another Medicare drug plan later, you have to wait for an enrollment period. You may have to pay a late enrollment penalty.
What You Pay for Medicare Drug Coverage
- Monthly premium
- Yearly deductible
- Co-payments or co-insurance
- Costs in the coverage gap
- Costs if you get Extra Help
- Costs if you pay a Late Enrollment Penalty
Your actual drug plan costs will vary depending on:
- The prescriptions you use and whether your plan covers them
- The plan you choose
- Whether you go to a pharmacy in your plan’s network
- Whether your drugs are on your plan’s formulary
- Whether you get Extra Help paying your Part D costs
Monthly Premium
- Most drug plans charge a monthly fee that varies by plan. You pay this in addition to the Part B premium. If you belong to a Medicare Advantage Plan (like an HMO or PPO) or a Medicare Cost Plan that includes Medicare prescription drug coverage, the monthly premium you pay to your plan may include an amount for prescription drug coverage.
Get Your Premium Automatically Deducted
- Contact your drug plan if you want your premium deducted from your monthly Social Security payment. Your first deduction will usually take 3 months to start, and 3 months of premiums will likely be deducted at once.
- After that, only one premium will be deducted each month. You may also see a delay in premiums being withheld if you switch plans. If you want to stop premium deductions and get billed directly, contact your drug plan.
Your Premium Could Be Higher Based on Income
- A small group—fewer than 5% of all people with Medicare—may pay a higher monthly premium for Part D coverage based on their income. This includes Part D coverage you get from a Medicare Prescription Drug Plan, or a Medicare Advantage Plan or Medicare Cost Plan that includes Medicare drug coverage.
Costs in the Part D Coverage Gap
- Most Medicare drug plans have a coverage gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs.
- Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs.
Costs in the Part D Coverage Gap
- Most Medicare drug plans have a coverage gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs.
- Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs (Initial Coverage Limit – ICL)
- Once you enter the coverage gap, you get a 50% manufacturer-paid discount on covered brand-name drugs. Although you’ll only pay 50% of the price for that brand-name drug, the entire price will count as out-of-pocket spending, which will help you get out of the coverage gap. You’ll also save 7% of the plan’s cost for all generic drugs until you reach ICL.
4 Ways to Lower Your Costs in the Coverage Gap
- Consider Switching to Generics or Other Lower-Cost Drugs: Talk to your doctor to find out if there are generic or less-expensive brand-name drugs that would work just as well as the ones you're taking now. You might also be able to save money by using mail-order pharmacies. Learn more in the Medicare Plan Finder.
- Pharmaceutical Assistance Programs: Some pharmaceutical companies offer help for people enrolled in Medicare Part D. Find out whether there’s a Patient Assistance Program for the drugs you take by visiting our Pharmaceutical Assistance Program site
- State Pharmaceutical Assistance Programs: Many states and the U.S. Virgin Islands offer help paying drug plan premiums and/or other drug costs. Find out if your state has a program by visiting our State Pharmaceutical Assistance Program site.
- Apply for Extra Help: Medicare and Social Security have a program for people with limited income and resources that helps you pay for your prescription drugs. If you qualify, you could pay between $1-$6 for each drug. Apply with Social Security by visiting www.socialsecurity.gov or by calling 1-800-772-1213. TTY users should call 1-800-325-0778.
What Part D Plans Cover
- Each plan has its own list of covered drugs (called a formulary). Many Medicare drug plans place drugs into different "tiers" on their formularies. Drugs in each tier have a different cost.
- For example, a drug in a lower tier will generally cost you less than a drug in a higher tier. In some cases, if your drug is on a higher tier and your prescriber (your doctor or other health care provider who is legally allowed to write prescriptions) thinks you need that drug instead of a similar drug on a lower tier, you or your prescriber can ask your plan for an exception to get a lower copayment.
Drug Plan Coverage Rules
- Prior authorization-You and/or your prescriber must contact the drug plan before you can fill certain prescriptions. Your prescriber may need to show that the drug is medically necessary for the plan to cover it.
- Quantity limits-Limits on how much medication you can get at a time.
- Step therapy-You must try one or more similar, lower cost drugs before the plan will cover the prescribed drug.