More ABC'S and D's of Medicare,an FAQ

What are Medicare Parts A, B, C, and D?

Medicare Part A typically pays for your inpatient hospital expenses.
Medicare Part B typically covers your outpatient healthcare expenses, including doctor fees.
Medicare Part C also known as Medicare Advantage (formerly Medicare+Choice) offers a choice of options including Medicare managed care plans (like Medicare HMOs and PPOs) and Medicare private fee-for-service plans.
Medicare Part D is the outpatient prescription drug benefit resulting from the Medicare Modernization Act of 2003 that went into effect on January 1, 2006.

What if I turn age 65 and it's not during a Medicare prescription drug open enrollment period? Can I choose to enroll in a Medicare Advantage or Drug Plan?

Absolutely! When you turn age 65, you are eligible to enroll in the Medicare prescription drug plan, a Medicare Advantage plans, Medicare Supplement Plan without having to answer health questions. This is called Special Enrollment Period or SEP.

What are the options under MedicareAdvantage?

Insurance companies offering Medicare Advantage health plans must belicensed before Medicare will enter into an arrangement to purchase coverage for you. Medicare Advantage plans are based on your geographic location and are not available in all counties. The types of Medicare Advantage plans are:

• Health Maintenance Organization (HMO):

A type of managed care health plan with a defined list of providers, often referred to as a network, that enrollees must use. HMOs generally have more restrictions on the providers you may use than other types of health plans in which you can enroll, although they often provide benefits, such as additional preventive care, that are not available from other types of health plans.Normally, an HMO will make referrals to non-network providers only in unusual situations. The HMO may also require that you obtain a referral from your primary provider
before seeing a specialist. Other than in an emergency situation, an HMO will not pay for services you obtain from a provider who is not part of the HMO’s network. Before you enroll in an HMO, you should carefully review the list of providers that is available through the HMO. You should also review whether the HMO allows access to out-of-state provider networks. HMOs do notcover services provided by non-network providers that are not emergency or urgent caresituations. Typically, an HMO has only small or no copayments for covered medical services.

• POINT OF SERVICE PLAN

A type of managed care health plan with a network of providers that also permits you to use
non-network providers, usually at some additional cost to you. The POS plan may also have requirements that you obtain a referral from your primary provider before the plan will agree to pay for out-of-network care. Similar to the HMO, the POS has small copayments for medical services received from providers in the network.

• Preferred Provider Organisation (PPO):

A type of managed care health plan offered by private health insurance companies that pays a
specific level of benefits if certain providers are used, and a lesser amount if non-PPO providers are utilized. Like an HMO, a PPO operates in a certain geographic area and is limited to specific providers.

• Private Fee for Service (PFFS):

A type of health plan offered by private health insurance companies. The plan allows you to go to any health care provider who accepts Medicare assignment or participates in the Medicare program but charges in excess of the Medicare assignment amount, and who accepts the PFFS’s fee schedule. If you see a provider who does not accept Medicare assignment, you may be responsible for any charges that are up to 15 percent in excess of the Medicare allowed amount. If you see a provider who does not accept the PFFS’s fee schedule or who does not participate in the Medicare program, you will not be covered and will be responsible for the entireamount charged by the provider. The planmay charge you, through premiums, additional
out-of-pocket expenses (such as copayments and coinsurance), or both, for any costs that exceed what original Medicare would pay.

Other Medicare Advantage options you may hear about are:

• Medicare Medical Savings Account
(MSA):

A health plan option made up of two parts. One part is a high deductible health insurance policy that covers the same services as Medicare Part A and Part B. The other part is a special savings account where Medicare deposits money to help you
pay for expenses to meet the deductible. The deductible may be as high as $6,000 annually.

• Medicare Special Needs Plan (SNP):

A special type of health plan limited to people in certain institutions (such as nursing homes), or eligible for both Medicare and Medicaid, or with certain chronic or disabling conditions. SNPs are available in limited areas, and are designed to provide services to people who can benefit the most from special experts of plan providers and from care management.

Having a Senior Moment?

A Medicare Primer: Savvy Seniors maximize their benefits.

There are many milestones in a person’s life but few are more intimidating than turning 65. A magical date that transforms you from being middle aged to officially being a “Senior Citizen”, many regret that loss of status, and the stereotyping, but this can also be a time of renewal, freedom, and growth. You finally have the time to do all those things you dreamed of while you were still working, and leisure opportunities abound. If you're approaching your 65th birthday, you're about to enter the wonderful world of Medicare coverage. There are now so many choices, rules and timetables, that it can be complex and confusing. Here are a few things you should know.

When to sign up
The first thing you should know is when to enroll. Everyone is eligible for Medicare at age 65, even if your normal retirement age for full Social Security benefits is later. To avoid possible mishaps, contact the Social Security Administration -- (800) 772-1213; http://www.socialsecurity.gov/ -- three months before you turn 65 to sign up. The initial enrollment period for Medicare runs for seven months, starting three months before your birthday month and continuing for three months afterward.

If you miss your initial enrollment period for Medicare Part B, you'll have to wait until the next annual enrollment period, which runs from Jan. 1 to March 31 for benefits that begin the following July 1. There is also a penalty of 10 percent penalty for each year you wait beyond your initial enrollment period, which will be tacked on to your monthly Part B premium. You can sign up for premium-free Part A, which covers hospital services, at any time with no penalty.


Gaps, Doughnut holes, and Medicare Advantage

Did you know that Medicare also offers a comprehensive health plan sold by private insurers called Medicare Advantage? These plans provide health-care, prescription drug coverage and additional services all in one policy, and thanks to generous government subsidies, these plans are better, cheaper and more readily available than ever before. Medicare Advantage plans are available through HMOs, PPOs, and now as private fee for service plans which allow you to use doctors and hospitals outside your network, usually at an additional cost. Some of these plans charge nothing beyond the cost of the Medicare Part B premium, which is $93.50 a month in 2007. Before deciding on the best option for you, learn about each Medicare Advantage plans offerings, and do your due diligence by comparing and speaking with a knowledgeable advisor.
If you decide to opt for traditional Medicare (Part A and B) or Fee for Service, you'll need two additional insurance policies -- supplemental medigap insurance and a Part D prescription-drug plan -- to get the same level of coverage as a Medicare Advantage plan. And Advantage plans on average are cheaper than what you would pay for traditional Medicare, a medigap policy, and a stand alone prescription drug plan.


Fill the Gaps
Should you choose traditional Medicare, it's recommended you get a medigap policy (sold by private insurance companies) to fill in the gaps that basic Medicare doesn't cover. Policies come in 12 standardized versions, labeled A through L, and cost on average about $140 per month.

Drug Coverage
Along with traditional Medicare coverage and a medigap policy, you need to enroll in a Part D prescription drug plan for drug coverage. There are tons of options offering a wide range of coverage (premiums costs average $24 per month) so choosing can be difficult.

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