Going on Medicare is the largest insurance transition most people encounter in their lifetime. Preparation for that transition begins, for many, 6 months to a year prior to that date. If that is you (or was you), you probably noticed your mail volume increase and thought, “everybody wants to be my friend now that I’m turning 65″. AARP today, Blue Cross Blue Shield tomorrow, Mutual of Omaha the next day. its enough to make your head spin!
That said, it does not have to be confusing or overwhelming, because frankly, it’s really easy to understand once you cut through the clutter. The basic formula is simple: Medicare pays 80% at the doctor and hospital after the Part A and Part B deductibles, and you are responsible for the rest with no limits. That is, UNLESS, you have a Medigap Plan, (also known as a “Medicare supplement” plan) in which case the supplement fills in those “gaps” in Medicare and limits or eliminates altogether your out-of-pocket costs at the doctor and hospital.
Whether Secure Medicare Solutions is the one that assists you with the turning 65 transition or if someone else does, most people do find it advantageous to use a certified, licensed brokerage that can assist you with questions about the supplement plans (or Medicare in general) and provide rates for all of them. That way, you get an unbiased opinion (and equal or better rates) rather than going directly through the company, in which case you would not have a personal, unbiased representative to assist you in the enrollment process or with any future problems/concerns.
We’ve listed and answered below some actual questions that we’ve been asked by those turning 65 and in their Open Enrollment Period:
I called the Medicare 800 number but could not get answers to my questions. Where can I go to get information about Medicare and what the supplements cover?
You can visit http://www.medicare.gov to find answers to many questions. You can also work with a qualified, licensed brokerage to answer questions related to Medicare and Medicare Supplement insurance.
What is the difference between “parts” and “plans”?
Medicare “parts” refers to the different aspects of Medicare coverage. They are as follows:
- Part A: Hospital/inpatient coverage
- Part B: Outpatient/doctor’s office coverage (must have A to have this) - this is optional.
- Part C: Medicare Advantage plans (must have Part A and B to have this) - this is optional. With these plans, a private company takes over management of your Medicare benefits (see more information under next question).
- Part D: Prescription drug insurance (must have at least Medicare Part A to have this) - this is optional.
Medicare Supplement “plans”, however, refer to the 12 standardized plans that Medicare supplement insurance companies can offer. In 1992, the government standardized these, so each company is required to offer those plans. The confusing part is that they are also named for letters (A-L).
I keep hearing about these Medicare Advantage plans. Are they a Medicare Supplement? What is the difference between those plans and other Medicare Supplements?
Medicare Advantage plans are NOT a Medicare Supplement. On the contrary, they fall under Part C of Medicare. To sign up for these, you must have Medicare Parts A and B (just like with a supplement), but the private company takes over management of all of your Medicare benefits (sometimes, including prescription drugs).
Unlike Medicare Supplements, these types of plans have a system of cost-sharing (co-pays and deductibles, etc) at the doctor and hospital, but sometimes, can have lower monthly premiums than Medicare Supplements. Once you sign up for Medicare Part C (Medicare Advantage) and have that instead of “original”Medicare, you must qualify medically for a Medicare Supplement should you ever wish to return to that (unless you are in a special enrollment period).
I’m perfectly healthy. Why do I even need a Medicare Supplement? Why should I sign up now?
Medicare Supplements are, obviously, a completely voluntary part of health care for those on Medicare. Although the majority of people have some sort of complimentary plan with their Medicare, there are some who just have Medicare and pay the things that Medicare doesn’t cover out of their own pocket. So, you definitely have that option.
If you are considering that, one thing to keep in mind, is that you have a government-mandated “Open Enrollment” period when you turn 65. In most states, that extends for 6 months from the first day of the month in which you turn 65 (you can also sign up 6 months in advance of that date, in most cases, so that your coverage starts with your Medicare). By signing up during this period, a company can not deny you coverage or exclude pre-existing conditions.
IF you do NOT sign up during that period, but wish to sign up later, companies are not required to accept you. They may charge you a higher rate, deny your application, and/or not provide coverage for pre-existing conditions.
So, I understand that there are different plans but all companies are required to offer the standard plans. But, what do these standard plans cover?
Information about this can be found on the standardized plans chart. This can be viewed in the “Choosing a Medigap Policy” booklet that Medicare sends out or at the following link:
Your Free Guide to Medicare Supplements
Information about the different plans and what they cover can also be found on the Medigap Plans page of this web site or by calling 877.506.3378.
I keep seeing a rating tied to the companies I am considering. Is that important?
The company ratings are an indicator of financial strength and stability of the insurance company and are another factor that usually plays into the decision about which Medicare Supplement plan or company to choose. A.M. Best is the leading independent provider of these ratings, and companies are required to disclose their ratings. We also have access to that information and can provide it upon request (we provide it already with our rate quote analysis).