The mysteries of Medicare decoded

Thursday, October 11, 2012

Keeping your health shouldn't mean losing your mind. Unfortunately, trying to decode one's medical options can sometimes leave one dizzy. Wrestling with the manifold mysteries of Medicare is no exception.

Medicare eligibility, for those who are not disabled, begins at age 65. The program consists of two parts.

Part A pays for inpatient hospital, as well as home health care costs. This first part is free when you enroll in Medicare.

Part B picks up various doctor services, outpatient care, diagnostic and other medical costs. It is not free. The premium paid will subject to government rating and will depend on your income level prior to enrollment. That said, the average monthly premium is about $115.

While Medicare provides benefits, it will not cover the full cost of medical care. The balance must be paid by the patient, and these costs can stretch into the thousands of dollars. Fortunately, there are options to help cover these additional expenses. They include Medicare supplements, prescription drug plans (PDPs), and Medicare advantage plans.

The first of these, sometimes called "Medigap" plans, are designed to pay some or all of the percentages and deductibles which Medicare parts A and B do not pay. These programs are labeled by the government to make them easier to understand.

The system is standardized, so that a plan rated "F" has identical benefits regardless of which insurance company you choose. One thing not covered by Medicare supplement plans is prescription drugs.

Rates will vary depending on the carrier, but typically range from $150 to $400 per month. Underwriting requirements also vary, though they are minimal for those enrolling at age 65. After that, it is necessary to fully qualify for a new program, which might be difficult for those with pre-existing conditions.

Medicare advantage plans, sometimes called MAPDs or Part C, is the second type of plan that is offered through many insurance providers. There are some significant differences. First, Medicare advantage plans include prescription drug benefits. They can also offer dental, vision, hearing and even the Silver Sneaker fitness program as an increased benefit.

In many states and counties -- including Carroll County -- the Medicare advantage program has no or very low premiums. You may enroll in a Medicare advantage plan when you turn 65 or each year from Oct. 15 to Dec. 7. During this period, you must answer only one health question to enroll. Medicare advantage plans are also open to those of all ages who are on Medicare for disability.

Medicare prescription drug plans, also called PDPs or Part D, are the third and final type of plan that can help cover expenses not paid by Medicare. Plans of this type can be used in conjunction with Medicare or a Medicare supplement.

The plans can also be wrapped into the Medicare Advantage plan. The PDP covers five tiers of medication, ranging from "generic" to "specialty drug." There is normally a $325 deductible. However, if you are already enrolled in a Medicare advantage plan, your provider will normally pay this deductible for you.

As a stand-alone product, the cost of prescription drug plans averages $30 per month. The program is only available during the open enrollment period or when you acquire Medicare.

While the information above is a great place to start, it represents only the basic facts of each program. It is highly recommended that you speak with a senior product specialist who can further assist you in choosing the right product for your individual needs.

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Dave Teigen is owner and agent/broker of Teigen Insurance, and Brooke Patten is senior products specialist there.

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