Medicare is a federally funded government health program that helps pay for medical bills and prescription drug costs for persons age 65 or older and for certain disabled persons. There are four parts to Medicare: Part A (hospital insurance); Part B (medical insurance); Part C (Medicare managed care plans); and Part D (prescription drug plan). Medicare Parts A and B are administered by the government, whereas Parts C and D are approved by the government but run by private insurance companies. This article will focus on Part C, which is called Medicare Advantage managed care, and offer Medicare tips on how to successfully navigate the sometimes confusing landscape of Medicare and how to choose the right plan.
Part A (hospital insurance) and Part B (medical insurance) are together what most people associate with traditional Medicare. Part A covers care in hospitals as an inpatient, critical access hospitals (small facilities that give limited outpatient and inpatient services to people in rural areas), skilled nursing facilities (not custodial or long-term care), hospice care, and some home health care. You automatically get Part A when you turn 65 or begin taking Social Security benefits. You don't have to pay a monthly premium for Part A coverage because you've already paid into the system, through Medicare taxes, while you were working.
Part B (medical insurance) covers outpatient hospital care that Part A may not cover, such as physical therapy and some home health care, when they are medically necessary. Part B requires payment of a monthly premium (currently about $100).
In lieu of continuing to accept benefits from Medicare Parts A and B, you have the choice of enrolling in a managed care plan--Part C of Medicare, referred to as Medicare Advantage. Medicare Advantage is a privately run health care plan that combines the benefits from Medicare Parts A and B. While the government doesn't control the cost of Medicare Advantage, it does regulate who can enroll in the plan and when they can do so.
Medicare Advantage plans include managed care plans such as:
If you enroll in Medicare Advantage, you receive all of your Medicare benefits through the plan. You will have to pay the monthly premium for Medicare Part B, and may have to pay an additional premium for the extra benefits the Medicare Advantage plan offers. Depending on your Medicare Advantage plan, it may or may not include a prescription drug plan.
Medicare Advantage plans aim to curb the amount of co-payments and deductibles and fill in the gaps of coverage between Plan A and Plan B. As a result, those who enroll in Medicare Advantage do not need to purchase a Medigap insurance policy (which previously was the only way assure coverage for the gaps between Plan A and Plan B).
Advantages of enrolling in Medicare Advantage include:
However, while Medicare Advantage typically provides better coverage and lower costs, be aware of several potential drawbacks to enrolling. These include:
Keeping these advantages and disadvantages in mind, there are a few Medicare tips which you should follow or investigate when choosing your Medicare Advantage plan, or in deciding whether to enroll at all.
Medicare can be confusing with all its rules and eligibility process, so for more information and Medicare tips, there are several places to go. First is the government Medicare website, at www.medicare.gov. There, you can find information on the different types of coverage, as well as publications on comparing coverage and signing up for different programs.
You can also visit the State Health Insurance Assistance Program ("SHIP") at www.shiptalk.org which offers one on one counseling for people on Medicare, or the AARP website, www.aarp.org which has further information on Medicare and its effect on retired persons.