Here’s what you should consider when picking a plan
By Deborah Jeanne Sergeant
The various “parts” of Medicare may seem confusing. Learning a few principles about how they work can make it much easier to understand. Otherwise, what is covered by the various parts of Medicare can be challenging to sort out.
“Part A is for hospitalization,” said Sean Kelly, a Medicare adviser in Buffalo. “In most cases, you don’t have to sign up for it. With Part B, you have to sign up at age 65 or after two years when you’re on disability on Social Security.”
Most people pay about $150 per month, depending upon income. People can pay stiff penalties if they do not sign up once eligible. That is not so for people who are still covered by an employer’s qualifying healthcare plan.
Some eligible people skip signing up for Medicare because they do not have chronic health issues or take prescription drugs. But they face lifelong financial penalties when they sign up late.
Parts A and B cover 80% of the costs for care. Part A covers hospice, in addition to hospitalizations. For nursing home rehabilitation care, it pays for 20 days. After that, patients owe a co-insurance of $185.50 a day up until 100 days, but only if they still qualify for that care. Once a patient “plateaus” in their rehabilitation, the coverage drops. It does not cover long-term care.
Part B covers out-patient services after an annual deductible of $203 for things such as doctor’s visits, laboratory tests, x-rays, diagnostic tests, therapy and other services. It also pays towards durable medical goods.
Private insurance companies administer Part C for the government. Part C is also called a supplement plan or Medicare Advantage, which pays for what A and B do not cover.
Insurance companies receive money from the government to subsidize the premium costs.
“They pool all the money of all the clients and act as a mini-Medicare to pay the bills,” Kelly said. “The way they separate themselves from other carriers is by value-added benefits to entice people to join their company, at first things like gym memberships, dental cleanings, over-the-counter care and transportation.”
Advantage plans “limit out-of-pocket expenses,” said Maria Schenk, licensed sales agent at Sheridan Benefits, LLC in Buffalo. “Advantage plans become primary and often includes dental, vision, prescription and wellness benefits.”
For those who have Medicare A and B but not an Advantage plan, a Medigap plan can cover items not covered by A and B.
Parts A, B and sometimes C do not cover prescriptions. Part D is the prescription drug program, which is offered through a private insurance company.
“For someone who’s 65 and not on prescriptions, they don’t think they need it,” Kelly said. “But they will end up getting penalized later if they decide later that they want a Part D plan. In the past, many people didn’t go on an Advantage plan because they thought they’d have to pay for it, but for most people there’s zero or little premium.”
The open enrollment window for signing up for Medicare is three months before and three months after the 65th birthday.
While going for the most expensive Advantage Plan or the plan that someone else likes seems like the best option, Kelly said that’s not always best. He advises clients to carefully examine their healthcare needs to determine what plan suits them.
A Medicare expert can provide help in figuring out the best plan.
Roxanne Sorenson, owner of Elder Care Solutions of WNY in Amherst, cautions clients to look at their providers and prescriptions while reviewing plans.
“Are they covered under your plan?” she said. “What they cover in 2021 may not be what they cover in 2022. Drug costs and copays can be significant. You have the opportunity every year to change so don’t just say, ‘Nothing’s changed.’ It doesn’t hurt to take an hour in the year to look at your health insurance.”
Qualifying policyholders should also look at Elderly Pharmaceutical Insurance Coverage (EPIC), a senior program that helps minimize the cost of medications for income-eligible seniors.
She has known of policyholders who signed up for the wrong plan and ended up with many thousands of dollars in medical bills.
To prevent this, she said it is vital to “meet with an independent broker who knows what he’s talking about. You don’t have to go just once. It’s an important decision. You’ll be locked in for a year. You owe yourself this.”
An independent agent receives a flat amount regardless of the plan chosen, whether a basic one or not. Clients pay nothing for their consultation.