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Retirement and Health Insurance: Understanding Medicare

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Medicare Part A, B, C and D. What does it all mean?

  
  
  

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  • PART A is Hospital Insurance … and helps pay if you are a patient in a hospital, skilled nursing facility or in hospice care. Most people get Part A free (no premium), but under Part A you have to pay a deductible for each hospital admission (for room and board), plus 20% of the costs for any services received.
  • PART B is Medical Insurance … and helps pay for doctors’ services, outpatient hospital care, durable medical equipment and other medical services. You are responsible for paying the monthly Part B premium and the annual Part B deductible (plus 20% of costs).

Together, these are called Original Medicare (Part A + Part B). Think of these two parts as the building blocks of any Medicare coverage option.

  • PART C means Medicare Advantage: Medicare Advantage plans are offered through private insurance companies approved by Medicare. They provide all Part A and Part B benefits, help fill the gaps in Part A and Part B, and may include extra benefits like vision, hearing, dental or fitness. Many Medicare Advantage plans include prescription drug coverage. You must have Part A and B to enroll in a Medicare Advantage plan, and continue to pay your Part B premiums (in addition to any plan premium).

Although Medicare Supplement (Medigap) plans are not part of the federal Medicare program, they help fill the gaps in Original Medicare. In Massachusetts, private insurance companies can offer two plan options that are regulated by the Commonwealth of Massachusetts.

  • PART D is Prescription Drug Coverage: Original Medicare does not include coverage for outpatient prescription drugs. The Part D benefit is offered through private plans approved by Medicare. To receive Part D benefits, you can join a “stand-alone” drug plan (perhaps along with a Medigap plan) or a Medicare Advantage plan that includes drug coverage. To join a stand-alone drug plan, you must have Part A or B, continue paying Part B premiums (if applicable) and monthly Part D plan premiums (if applicable).

    IMPORTANT: People with limited incomes may qualify for Extra Help to pay for their prescription drug costs. If eligible, Medicare could pay up to seventy-five (75) percent or more of your drug costs, including monthly prescription drug premiums, annual deductibles and coinsurance. Additionally, those who qualify will not be subject to the coverage gap or a late enrollment penalty. Many people are eligible for these savings and don’t even know it.

    To see if you qualify for Extra Help to pay for your prescription drug premiums and costs, call:
    • 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048,
      24 hours a day/7 days a week;
    • The Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday – Friday. TTY users should call 1-800-325-0778; or
    • A MassHealth Health Benefits Advisor at 1-800-841-2900 (TTY: 1-800-497-4648).

A+B? A+B+D? C+D? Which Medicare combination is right for you?

Earlier we said that Part A and Part B (Original Medicare) are the building blocks of all Medicare coverage options, but it really starts with these two: Original Medicare (with add-ons like a stand-alone drug plan and/or a Medicare Supplement plan) or a Medicare Advantage plan (with or without drug coverage).

Say you want Original Medicare (Parts A and B) …

Under Part A, you get coverage for hospital stays and skilled nursing care, along with some other services. Part B helps pay for doctor visits, outpatient services and other medical expenses.

Want Medicare prescription drug coverage? You’ll need to join a stand-alone prescription drug plan (PDP) to get Part D drug benefits. These are available through private companies that have been approved by Medicare. Plan costs, covered drugs and pharmacies you can use vary by plan. These plans cover prescription drugs only.

If you have Original Medicare and want extra coverage to help fill the gaps, you can add a Medicare Supplement (Medigap) plan. These plans cover some or all of Medicare’s deductibles, copayments and coinsurance. In Massachusetts, there are two types of Medicare Supplement plans available (Tufts Health Plan Medicare Preferred offers both). Depending on the plan you choose, you could have little to no out-of-pocket costs for Medicare-covered services.

So, under this scenario your choices are:
Original Medicare with No Drug Coverage (Part A + Part B)
Original Medicare with Drug Coverage (Part A + Part B + Part D)
Original Medicare and a Medigap Plan with No Drug Coverage (Part A + Part B + Medigap)
Original Medicare, a Medigap Plan and Drug Coverage (Part A + Part B + Medigap + Part D)

Maybe a Medicare Advantage plan is more your style …

A Medicare Advantage plan (Part C) includes all the Part A and B benefits that you get under Original Medicare, and may include extras like vision, hearing, dental and gym memberships. Medicare Advantage plans include HMOs, PPOs and Private Fee-for-Service (PFFS) plans.

Most Medicare Advantage HMO and PPO plans offer Part D prescription drug coverage — but many give you the choice of medical-only or medical+drug coverage options. If a Medicare Advantage plan offers Part D drug coverage, and you want drug coverage, you must get it through the plan. You cannot join a stand-alone Part D plan if drug coverage is available through the Medicare Advantage plan, even if you select a medical-only coverage option.

Some Medicare Advantage plans (PFFS and Medicare Cost plans) do not typically include Part D drug coverage. In those cases, members are allowed to enroll in a stand-alone Part D prescription drug plan.

So, if you pick a Medicare Advantage plan …
You get Part A + Part B + Extra Benefits, With or Without Drug Coverage

 

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H2256_2012_250 File & Use 05/30/2012

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