Medicare Planning

When you reach 65, most people’s primary health care provider becomes Medicare. Medicare is the federal health insurance program created by the Federal government and implemented by the state and county governments. It is available to people 65 years of age or older. Medicare is also available to younger people with certain disabilities and people with end-stage renal disease – permanent kidney failure with dialysis or a transplant, sometimes called ESRD.

The benefits of Medicare include:

  • hospitalization insurance
  • post-hospital skilled nursing facility assistance with significant restrictions
  • physician visits
  • hospice care
  • outpatient treatment care

As a person eligible for Medicare, you have many health care coverage options – perhaps even more than when you selected benefits through an employer or on your own.

More than 44 million people are covered by the Medicare program. People with Medicare can get their coverage through original Medicare (the traditional fee-for-service program) or from Medicare private plans (the Medicare Advantage program). To make an informed decision, you need to first understand how these health plans work and how they differ, then decide which option is best for you.

There are two parts to original Medicare:

  • Part A covers inpatient care in a hospital or a limited stay in a skilled nursing facility
  • Part B covers doctors and outpatient hospital services

Medicare pays for many health care services and supplies, but it doesn’t cover all of your healthcare costs. Also, drug coverage when not in the hospital is very limited. That’s why most people with Medicare carry supplemental Medicare coverage from a private insurance company. In addition, there are supplemental prescription programs, known as Medicare Part D to cover the expenses of medications.

Medicare HMOs cover the same doctor and hospital services as the original Medicare program, but out-of-pocket costs for these services are usually different. HMOs appeal to some people with Medicare because they may provide additional benefits, such as eyeglasses, which are not covered by the traditional Medicare program. Medicare HMOs may charge a premium that you would need to pay in addition to the Part B monthly premium.

You should be aware that Medicare HMO enrollees generally may only use doctors, hospitals, and other providers in the HMO’s network. For an additional fee, some HMOs offer point-of-service (POS) benefits that partially cover care received outside the network.

If you join a Medicare HMO, you will usually have to select a primary care doctor who is responsible for deciding when you should see a specialist and which specialist you should see.

Neither Medicare nor the HMO will pay for unauthorized visits to specialists in the plan, providers outside the HMO’s network, or for non-emergency care outside the HMO’s service area.

As you approach eligibility for Medicare, Benefit Design can help you tailor supplemental insurance to meet your specific needs.

Medicare PPOs, or “Preferred Provider Organizations,” are private health plans, much like Medicare HMOs. HMOs and PPOs differ in two key ways:

  1. Medicare PPOs cover some of the costs of your care if you use doctors and hospitals outside the network.
  2. Medicare PPOs generally do not require that you see a primary care physician before going to a specialist.

You should consider four important factors before signing up for a plan:

As you approach eligibility for Medicare, Benefit Design can help you tailor supplemental insurance to meet your specific needs.

  1. Can you continue to see the doctors you know and trust if you join a certain plan? Your doctor or specialist might be in one plan’s network, but not in another’s. Even if your doctor is in a plan’s network, he or she can leave that network at any time. What about your choice of hospital?
  2. The supplemental benefits offered by Medicare private plans vary widely and may change every year. If you want to join a plan because of the prescription drug benefit, make sure that the plan covers the drugs you need and you understand any limits that may apply.
  3. How much are the monthly premiums and co-payments associated with different health care services? Is there a deductible? How do the costs for various services differ from Original Medicare? Keep in mind that costs generally change each calendar year.
  4. Not all Medicare private plans are the same. Review each plan’s written information and try to talk to plan members about their experiences. For information on quality and performance, visit Medicare’s website.

There are several options to consider for your health insurance coverage when you are eligible for Medicare. It is also important to make sure your financial planning incorporates both the expenses and the benefits of these programs.

Benefit Design Associates provides a variety of products and services to assist you with your planning.

For a no-obligation quote, use our online Quote Forms under Resources or call 480.998.0096.


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