It feels strange to type 2015 – I am still getting used to it. But it is, indeed, 2015, and as we move into this new year, I wanted to share a new program that I am doing starting in February of 2015.

Health care reform is a hot topic of discussion and debate, and it has been for at least the last five years. There are many polarizing viewpoints, politicized stances and overall vitriol

What does Medicare cover?

Medicare, administered by The Centers for Medicare & Medicaid Services (CMS), is the largest health insurance program in the U.S. Created as a result of the Social Security Act in 1965, its enrollees account for about 40 million people.  Original Medicare does not pay for everything. Even if you are covered by Medicare Parts A and B, there will be some out-of-pocket expenses you may have to incur, i.e. copayments, coinsurance and deductibles, as well as travel outside the U.S. Original Medicare pays for 80% of your Part B medical expenses; the remaining 20% (of the Medicare-approved amount of the service, if the doctor or other health care provider accepts assignment) is your responsibility. That 20% gap could place a significant financial burden on you, resulting in very high out-of-pocket expenses.  There are no limits to the Part B 20% copays.  That is the reason why it is necessary to have a Medicare supplemental insurance plan in place.  This insurance is commonly referred to as a Medigap policy, its name implying its purpose to fill in the gaps where Medicare coverage does not exist.

There is usually no premium to pay for Part A of Medicare upon turning age 65, if you or your spouse paid Medicare taxes while working.  That is why this is often called premium-free Part A.  Important! To qualify for Medicare Part A and/or Part B, you must be a U.S. citizen or be lawfully present in the U.S. (be a legal resident of the U.S. for the last five years).

Part A covers the following:

• inpatient hospital stays, including a semi-private room, meals, general nursing, drugs as part of your inpatient treatment and other hospital services and supplies.
• physician’s fees
• home health care – it covers medically necessary part time or intermittent skilled nursing care and/or physical therapy, speech language pathology services, and the need for continuing occupational therapy.  Your care must be ordered by a physician and it must be provided by a Medicare-certified home health agency
• skilled nursing facilities,
• hospice care – to qualify either a hospice doctor or your doctor must certify that you are terminally ill (life expectancy of 6 months or less).  After 6 months, you must be re-certified if you are still there.  Coverage includes pain management modalities, medical, nursing and social services, drugs, certain durable equipment, aide and homemaker services.  Hospice does not cover spiritual or grief counseling; stay in a facility (room & board) unless the hospice medical team deems it necessary for pain and symptom management; and the stay must be in a Medicare-approved facility.
• critical access hospitals (small rural facilities)
• inpatient care in a religious nonmedical health care institution.
• blood – no charge except in cases where the hospital must buy the blood for you.  In that case, you must either pay the hospital for the first three units of blood you receive during the calendar year; or have blood donated by you or someone else.

Part B of Medicare is the medical insurance part.  It covers medically necessary physician’s services, i.e. x-rays, laboratory and diagnostic tests, flu and pneumonia vaccinations, blood transfusions, some ambulance transportation, and chemotherapy. In addition, outpatient care, physical and occupational therapy and some home health are also covered services.

Covered services also include the following:

• Preventive screenings such as bone density tests, breast cancer screenings (mammograms), cardiovascular disease screenings and cervical and vaginal cancer screenings;
• Clinical research studies
• Mental health services
• Surgical second opinions
• Durable medical equipment (canes, walkers, wheelchairs, etc.), prosthetic and orthotics, surgical dressings, and therapeutic shoes and inserts.

According to the CMS website, coverage is equal to 80 percent of the lower of either the actual charge for the item or the fee schedule amount calculated for the item, less any unmet deductible. The beneficiary is responsible for 20 percent of the lower of either the actual charge for the item or the fee schedule amount calculated for the item, plus any unmet deductible.

What is not covered by Parts A and B of Medicare?

Medicare does not cover the cost of:

• Routine dental care
• Eyeglasses
• Hearing aids and exams for fitting them
• Acupuncture
• Cosmetic surgery
• Any type of custodial care for those who are unable to live independently.  That is provided you do not have an acute illness that would necessitate skilled nursing services.  For example, Medicare would not cover the medical expenses of someone in a nursing home who has Alzheimer’s or dementia, unless they suffered an acute illness, i.e. heart attack or pneumonia.
• Long-term services
• Concierge care (retainer-based medicine, boutique medicine, platinum practice or direct care).

In summary, supplemental insurance can help most people enrolled in Medicare pay for the things that are not covered by Medicare.  It covers the “gap” that Medicare Parts A and B do not cover.  The additional expenses can be quite substantial and become a financial burden to seniors.  Although Medigap plans have standardized benefits regulated by the Federal Government, it is very important to note that costs can vary from company to company, even though the insurance and the coverage is the same.  So, choose a plan wisely!

When is the Medicare Open Enrollment Period?

The Medicare Open Enrollment period is terminology that many people often use to refer to the end of the year period during which you can change medical and prescription plans. However, there is definitely some serious confusion about this period and some misuse of the term. This is, at least in part, due to the enormous amount of marketing the insurance companies do during this time of year. So, let’s clear up the Medicare open enrollment period confusion.

Medicare Open Enrollment: When You First Turn 65 or Start Medicare

The actual Medicare open enrollment period is when you first turn 65 or go on Medicare Part B. During this time period, you have open enrollment into a Medigap (Medicare Supplement) plan. This open enrollment period lasts for 6 months starting with the first day of the month you turn 65 (or your Part B effective date if that date is later). During this time, you cannot be made to answer any health questions or undergo any medical underwriting to be approved on a Medigap plan.

Likewise, when you turn 65 or start on Medicare Part B, you have an initial election period, during which you can select a Part D plan (prescription drug plan) without restriction or penalty. This initial election period lasts for 7 months – the month you turn 65 and three months on either side of that month. During this time, you can select any Part D plan without restriction or penalty.

If you are opting to go with a Medicare Advantage plan, you get the same initial election period as detailed above – 7 months including the month of your 65^th birthday and three months on either side of that month.

So, What is the Annual Medicare Enrollment Period?

The period that occurs annually, at the end of each year, is actually the “annual election period” or AEP. This period does not apply at all to Medigap policies (Medicare Supplements). On the contrary, this period only applies to Part D and Part C (Medicare Advantage).

The annual election period runs from October 15 to December 7. During the AEP, you can make changes to your Part D prescription drug plan or your Part C Medicare Advantage plan. Any changes that you make will take effect at the start of the following calendar year.

Many people often mistakenly think that you can also make unrestricted changes to your Medigap plan during that period; however, that is not the case. While you certainly can compare and change your Medigap plan during that period, you do still have to answer medical questions and be approved. It is not, technically, an open enrollment period for Medigap plans though. And, you can compare Medigap plans and change your plan at any time of the year.

How to Prepare for the Medicare Annual Election Period?

If you have either a Part D plan or a Medicare Advantage plan (Part C), you will receive a notice of plan changes for the following year in the mail. This usually comes in late September or early October. It is crucial not to merely disregard this mailing. Some of these plans change drastically each year, and you don’t want to get stuck in a deteriorating plan.

When you receive your notice of plan changes, you should look over it carefully. It should show a side-by-side comparison with the previous year’s benefits. See what changes have been made and decide, based on the plan changes, your satisfaction with your plan, and any changes to your health or finances, whether you want to “shop” for a new plan.

If you do want to shop for a new Part D or Advantage plan, keep in mind that you can only do so during the annual election period, which runs from October 15 to December 7.

Secure Medicare Solutions is a leading, independent Medicare insurance agency. We work with the companies that do Medicare Supplement plans so that you can compare all options in a centralized, unbiased place. We also provide Medigap quotes online by email and can answer any questions that you have. You can reach us at 877.506.3378 or online.