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Medicare 101 basics



Medicare as easy as A, B,C and D.


When should you start thinking about

Medicare? It’s a good idea to learn

the basics well before you become

eligible. That way you can be prepared

to make an informed decision when the

time comes.

4 Getting started with Medicare

Some of the elements

Original Medicare

(Parts A and B)

does not cover are:

Vision

Dental

Hearing

Prescription

drugs

Medicare Made Clear™ — an overview.

Medicare Parts A and B are considered Original Medicare.

Part A pays for hospital care and Part B pays for doctor visits

and other outpatient care.

Original Medicare doesn’t cover everything.

Original Medicare helps you get health care coverage, but you

should expect to pay some of the costs.

You can enroll in a Medicare supplement insurance plan to help

pay some of the costs and benefits that aren’t paid by Original

Medicare Parts A and B. You can also enroll in a stand‑alone

Medicare Part D plan for help with prescription drug costs.

OR

You can instead enroll in a Medicare Advantage Part C plan

offered by private insurance companies. Part C plans generally

give you all of the coverage provided by Parts A and B, as well

as additional benefits:

••Combines hospital costs and doctor and outpatient care

in one plan

••Often include Part D prescription drug coverage

••May include additional benefits such as dental, vision or

hearing services

Who is eligible for Medicare?

Someone who is a U.S. citizen or legal resident for at least

five consecutive years And is one of the following:

••Age 65 or older

••Younger than 65 with a qualifying disability

••Any age with a diagnosis of end-stage renal disease or ALS

Your plan choices don’t have to be permanent.

As your health care needs change, you can change plans to

best meet them. You’re not locked in to one plan permanently.

You’ll have an opportunity to change plans at least once a year

during the Medicare Open Enrollment Period (October 15 –

December 7). Keep in mind there may be limitations to rejoining

a Medicare employer-sponsored plan.

Original Medicare is a federal health

insurance program for people

65 and older and others with disabilities.

Your choices — illustrated.

Medicare Choices

Decide if you need additional coverage. You have two ways to get it.

step 2

Choose a Medicare Advantage plan:

Medicare Advantage (Part C)

Offered by private companies

Add one or both of the following

to Original Medicare:

Medicare Supplement Insurance

Offered by private companies

Covers some of the

costs not paid by Original

Medicare Parts A and B

Medicare Part D

Offered by private companies

Part D covers

prescription drugs

Part C combines

Part A (hospital) and

Part B (doctor)

Provides additional

benefits

Most plans cover

prescription drugs

Option 1 OR Option 2

Enroll in Original Medicare.

step 1

Original Medicare

Provided by the government

Part B covers doctor and

outpatient visits

Part A covers

hospital stays

6 Getting started with Medicare

1 There are two main ways to get Medicare coverage.

You can choose Original Medicare (Parts A and B), which is provided by the

federal government. Original Medicare includes Part A for hospital stays and Part B

for doctor visits.

OR

You can choose a Medicare Advantage (Part C) plan from a private insurance

company. Medicare Advantage plans combine Part A and Part B coverage, and

many also include prescription drug coverage as well as additional benefits, such as

routine hearing and vision care.

2 You will pay a share of your costs.

••Original Medicare doesn’t pay for everything, and there is no limit on your

out‑of‑pocket costs

••No matter what type of Medicare plan you choose, you will pay a share of your

costs through monthly premiums, deductibles, co‑pays and co-insurance

3 Medicare supplement insurance plans help pay some of

your out‑of‑pocket costs.

Medicare supplement insurance plans, which are sold by private insurance

companies, help pay for some of the expenses not covered by Original Medicare, like

deductibles and co-pays.

4 There are two ways you can get coverage for

prescription drugs.

You can enroll in a stand-alone Part D prescription drug plan to go with your

Original Medicare coverage. Part D plans are sold by private companies.

OR

You can enroll in a Medicare Advantage (Part C) plan that includes prescription

drug coverage. Part C plans are also sold by private companies.

Medicare basics.

5 Know the choices in your state.

••Original Medicare (Parts A and B) is the same across the U.S.

••Medicare Advantage (Part C) plans and prescription drug (Part D) plans may be

available in only certain counties, states or regions

••Medicare supplement insurance plans help pay some of your out-of-pocket costs.

They travel with you nationwide. Not all plans are available in all states

6 Enroll at the right time.

Your Initial Enrollment Period (IEP) is your first chance to enroll in Medicare.

Your IEP is seven months long and includes the three months before the month you

turn 65, your birthday month and the three months after your birthday month.

••If you enroll before the month you turn 65, your coverage starts the first day of

your birthday month

••If you enroll during your birthday month or later, your coverage start date could

be delayed

••If you’re under 65 and have a qualifying disability, you are automatically enrolled

in Part A and Part B after you get Social Security or Railroad Retirement benefits

for 24 months

••If you’re under 65 and have ALS, you are automatically enrolled in Part A and

Part B the first month you get disability benefits from Social Security or the

Railroad Retirement Board

7 You can review your choices once a year.

After you choose your Medicare coverage, you can make changes each year during

Medicare Open Enrollment, which is from October 15 to December 7.

8 You may be eligible for a Special Enrollment Period.

You may be able to switch your Medicare coverage during a Special Enrollment

Period (SEP) if you have certain life changes, such as:

••You retire and leave a health care plan offered by your employer or union

••You move out of your current plan’s service area

8 Getting started with Medicare

Medicare Part A

(hospital coverage).

Medicare Part A helps with the cost of inpatient

hospital stays and skilled nursing after a hospital

stay. It also helps with hospice care and some

skilled care for the homebound.

What providers can I see?

You can choose any qualified provider in

the United States who is accepting new

Medicare patients.

Coverage limits.

There are some coverage limits with Part A.

For example, if you’re hospitalized or in a skilled

nursing facility for a long time (more than 90 days

at one time), you may have to pay part of the cost.

What isn’t covered.

Doctor services in the hospital are not covered

by Part A. Other services, such as personal

in‑hospital costs like telephone calls or services

related to “custodial care” — help with eating,

bathing or dressing — will also not be covered

under Part A unless medically necessary.

Costs.

Premium. If you or your spouse have made

payroll contributions to Social Security for

at least 10 years, you will not pay a premium for

Part A. Most people don’t pay Part A premiums.

If you haven’t made contributions, the premium

in 2016 is $411 a month. If you enroll late,

your monthly premium amount is higher.

Your share of the costs.

Deductible. You have to pay a deductible

before Part A starts paying a share of your costs.

In 2016, it’s $1,288 for each hospital stay, subject

to certain limits.

Co-pay. After staying a certain number of days,

you pay a co-pay. For hospital stays in 2016,

you’ll pay $322 per day (days 61 through 90) and

$644 per day (days 91 through 150). In a skilled

nursing facility, you’ll pay $161 per day (days 21

through 100). In 2016, you’ll also pay a co-pay of

up to $5 for each outpatient prescription drug

you receive in hospice care.

Co-insurance. You pay a small co-insurance

for inpatient respite care for hospice patients.

Part A Enrollment.

When can I join? As soon as you become eligible for Medicare.

How do I sign up? For most, if you’re already getting benefits from Social Security, enrollment

in Part A is automatic and there is no monthly premium. If you aren’t getting benefits from Social

Security, you can sign up at your local Social Security office.

Can they refuse to cover me or delay coverage? Not if you’re eligible for Medicare. You can’t be

refused Part A because of your medical history or a pre-existing illness.

Medicare Parts A and B

combined are often referred to as

Original Medicare.

Medicare Part B

(doctor visits).

How it works.

If you are receiving Social Security benefits

when you become eligible for Medicare you

will likely be automatically enrolled in Part B.

Medicare Part B helps with the cost of medically

necessary doctor visits and other medical

services, including outpatient care at hospitals

and clinics, laboratory tests, some diagnostic

screenings, and some skilled nursing care.

What providers can I see?

You can choose any qualified provider who

is eligible to participate in Medicare and

who is accepting new patients.

Coverage limits.

There are limits on a few services — for example,

the amount Part B will pay for occupational

therapy and some screenings.

What isn’t covered?

Keep in mind that Part B only covers vision,

dental or hearing in certain situations.

Additionally, it usually doesn’t cover care outside

the United States or help with things like bathing

or getting dressed.

Costs.

Premium. This depends on your yearly

income. Most people pay a monthly Part B

premium. If you receive Social Security, it will

be automatically deducted from your Social

Security benefits. For 2016, premiums range

from $104.90 to $389.80 a month.

Your share of the costs.

Deductible. Before Part B starts paying

a share of your costs, you first have to pay a

deductible. In 2016, it’s $166 for the year.

Co-pay. In 2016, outpatient hospital services

co‑pays range from a few dollars up to $1,288.

Co-insurance. After you pay your deductible,

Part B generally pays 80% and you pay 20%

as co-insurance.

Part B Enrollment.

When can I join? As soon as you become eligible for Medicare. You can also join later on, but only

at certain times of the year, and there may be a penalty.

How do I sign up? For most, if you’re already getting benefits from Social Security, enrollment in

Part B is automatic and most people pay a monthly premium. Otherwise, you can sign up at your

Social Security office.

Can they refuse to cover me or delay coverage? Not if you’re eligible for Medicare. You can’t be

refused Part B because of your medical history or a pre-existing illness.

Monthly premiums for Part B are

automatically taken out of your

Social Security check.

10 Getting started with Medicare

Medicare Part C

(Medicare Advantage).

How it works.

Medicare Advantage (Part C) plans are offered

by private insurance companies, and some

are offered through your plan sponsor. They

combine coverage for certain hospital costs,

doctor visits and other medical services in one

plan. They may also include prescription drug

(Part D) coverage, often with no added premium.

What providers can I see?

With some plans, you choose a primary care

doctor. In other plans, you can go to any

Medicare‑eligible provider who accepts the

plan’s terms, conditions and payment rates.

Medicare Advantage plans have service areas

and offer nationwide emergency coverage.

Coverage limits.

Plans vary. Check the limits and exclusions.

What isn’t covered?

Part C plans generally cover the same services

as Original Medicare (Parts A and B), except for

hospice care, which is provided under Part A.

Costs.

You’ll continue to pay your Part B premium.

And in many cases Part C plans may have their

own premiums too. Plan premiums vary widely.

Your share of the costs. Some plans have

deductibles. Some don’t. Many charge co-pays

or co-insurance. Look at the plan for details.

Out-of-pocket limits. All plans limit the

amount you have to spend, whereas Original

Medicare does not limit the amount that you may

spend out-of-pocket.

Coverage gap. If you have prescription

drug coverage, there’s a coverage gap when

your costs will likely go up.

Part C Enrollment.

When can I join? Once you have enrolled in Original Medicare (Parts A and B), you can enroll in a

Medicare Advantage plan. Unless you qualify for an exception, you may pay a penalty on your premium

if you don’t sign up for Medicare Part D coverage as soon as you are eligible. You must also join

Original Medicare (Parts A and B).

How do I sign up? Each insurance company handles its own enrollment process. These plans renew

automatically each year as long as you pay your premiums. To join, you can go online at Medicare.gov

or contact a plan provider (insurance company) directly.

Can they refuse to cover me or delay coverage? Not if you have joined Original Medicare

(Parts A and B), and the plan is accepting new members.

Can I change my coverage later? Yes, you have a chance to change your coverage each year during the

Open Enrollment Period, October 15 – December 7, or if you qualify due to a Special Enrollment Period

(SEP). Keep in mind there may be limitations to rejoining a Medicare employer‑sponsored plan.

Most Medicare Advantage

(Part C) plans include prescription

drug coverage.

How it works.

Medicare Part D plans help with the cost of

prescription drugs. They’re optional, although if

you don’t sign up when you become eligible, you

may pay a higher premium if you enroll later.

Part D is sold by private companies. Plans offer

different costs and different drug lists. The

federal government sets the guidelines. Some

Medicare Advantage plans include prescription

drug coverage.

What pharmacies can I use?

••Some plans limit your choice by area

••Others offer nationwide coverage

••Your plan may also offer mail order service

Coverage limits.



Enrolling in a Medicare

plan for the first time.


eligible for Extra Help.

Extra help is available.

If you have a lower income and fewer assets,

you may qualify for help.

Less than half of those who would qualify actually sign up,

so don’t hesitate to apply.

Medicaid

Helps pay for health care costs not covered by Medicare for

people and families with limited incomes. It may also offer extra

benefits that Medicare doesn’t cover, but each state creates its

own program, so contact your state office for more information.

See the resources on page 17 or call the Medicare Helpline at

1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048,

24 hours a day, 7 days a week for more information.

Medicare Savings Program

Helps you pay your Parts A and B premiums, deductibles

and co‑insurance.

Program of All-Inclusive Care for the Elderly (PACE)

Combines medical, social and long-term care services for frail

elderly people who live in the community, not a nursing home.

Only available in certain states.

Prescription drug premium assistance program

Helps pay for some or all of a person’s Medicare Part D

premiums, deductibles, and co-pays or co-insurance.

Other programs

May be available in your state.


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