Medicare is a federal health insurance program that pays a large part of the medical expenses for most Americans over the age of 65 and some younger, disabled persons who have received federal disability benefits for at least 24 months. Individuals with end-stage renal disease or ALS (amyotrophic lateral sclerosis, or “Lou Gehrig’s Disease”) may qualify for Medicare without the 24-month requirement. Anyone over age 65 may apply for Medicare.
When people get Medicare coverage there are two paths most people can take to utilize their benefits. Beneficiaries will either choose Original Medicare OR a Medicare Advantage Plan. (There is an Annual Open Enrollment Period to switch which path you are on, should you decide later you would like your coverage a different way.)
The Original Medicare path consists of Part A: Hospital Insurance , plus Part B: Medical Insurance. Original Medicare enrollees can also choose to add Part D: Prescription Drug Coverage. Part D insurance is optional. However, there can be a late enrollment penalty for beneficiaries who do not enroll when initially eligible and who do not have creditable coverage (coverage that is at least as good as Medicare) for prescription drugs from another source. Original Medicare enrollees can also choose to add optional Medigap (Supplemental) insurance. Medigap insurance is not required and there are no late enrollment penalties. However, other restrictions may apply.
Original Medicare = Part A + Part B + Part D (if you choose to enroll) + Medigap (if you choose to carry this type of policy). You can go to any doctor or hospital that takes Medicare anywhere in the U.S., and in most cases, you do not need referrals. Out-of-pocket costs vary depending on usage and how you set-up your coverage.
When beneficiaries take the Medicare Advantage Plan path, also known as Part C, the separate parts of Original Medicare (Parts A & B, and usually D) are “bundled” and overseen by a private insurance company.
Plans may have lower out-of-pocket costs than Original Medicare (depending on coverage and services needed). In many cases, beneficiaries need to use doctors who are in the plan’s network, and some plans may require referrals. Most plans offer “extra” benefits that Original Medicare does not offer.
Help with Medicare Premiums
Help is available for low-income enrollees who cannot afford to pay Medicare premiums, copayments, or deductibles. To find out more about Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), Qualifying Individuals 1 (QI1), and Extra Help programs, or to enroll, see pages 127-129. The resource limits for the Medicare Savings (QMB, SLMB, and QI1) and Extra Help programs change yearly. Call Affordable Medicine Options for Seniors (AMOS) for current resource limits.
When to Apply for Medicare
To apply for Medicare benefits, you should contact Social Security three months before you turn 65, whether or not you are retired. If you do not sign up at that time, you may be charged higher premiums when you do enroll. The only way individuals may delay taking Part B without a penalty is if they are enrolled in a plan that is at least as good as Medicare (creditable coverage). Contact Social Security for details about when and how to apply.
If you are already receiving Social Security or Railroad Retirement when you turn 65, you are automatically enrolled in Medicare, and your card will be mailed. The only way individuals may delay taking Part B without penalty is if they are enrolled in a plan that is at least as good as Medicare (creditable coverage).
If you continue to work after age 65 and are covered by your employer’s health insurance, Medicare will be the secondary payer for some hospital services under Part A. Contact Social Security promptly to enroll in Part B when you stop working or employment-related health insurance ends. Your premiums could be higher if you do not. You may be able to purchase a Medigap policy if your employment-related coverage is ending.
You can request pamphlets about Medicare benefits by telephone at 1-800-MEDICARE (1-800-633-4227) or online at www.medicare.gov. The Centers for Medicare & Medicaid Services (CMS), the federal agency that administers Medicare, sends a Medicare & You handbook to beneficiaries yearly with the latest information about Medicare benefits and where to get help.
For reliable information about obtaining desired Medicare benefits, contact Affordable Medicine Options for Seniors (AMOS) or the local office of Tennessee State Health Insurance Program (SHIP).
Part A: Hospital Insurance
Medicare Part A helps pay the cost of inpatient hospital care, and in some cases, helps pay for home health care, hospice care, and skilled nursing care in a nursing facility. Per benefit period, the patient must pay the deductible–the cost of the first day in the hospital (set annually; $1,484 as of Jan. 1, 2021). A benefit period begins with admission and ends 60 days after discharge. A new deductible is charged only after that 60-day period. Some Medicare Supplement plans cover that cost.
Written material about patients’ rights under Medicare should be provided upon admission.
Soon after admission, the patient and family should be contacted by the discharge planner or social worker. If such contact is not made, ask for it. Plans for patient care after discharge should be made as early as possible. For scheduled procedures, basic planning can be done before entering the hospital.
The amount Medicare will pay for a hospital stay is based on a patient’s diagnosis and whether hospital care is medically necessary. Once a doctor has decided it is no longer medically necessary for a patient to remain hospitalized, the person will be discharged.
If the patient or family disagrees with the decision to discharge the patient, they can appeal before leaving a hospital or other skilled care facilities. To appeal, contact KEPRO (page 127), Tennessee’s Medicare Quality Improvement Organization, for information and assistance in starting the appeal process within the time allowed. You may have to insist on your right to appeal.
Part B: Medical Insurance
Medicare Part B helps pay for medically necessary doctors’ care, out-patient therapies and hospital services, durable medical equipment, and some other medical services.
Enrollees pay a monthly premium and yearly deductible for Part B. Ask Medicare for more information. Part B will pay at least 80 percent of the Medicare-approved amount for any eligible service. Many preventive procedures do not require the 20-percent copayment. Doctors and durable medical equipment suppliers who accept as their full fee what Medicare allows are said to “accept Medicare assignment.”
Part D: Prescription Drug Insurance
Medicare Part D helps pay for medically necessary prescription drugs for beneficiaries. Medicare Part D is optional; however, there is a penalty for beneficiaries who do not enroll when initially eligible and who do not have creditable coverage, and then later enroll. The annual open enrollment period is Oct. 15 to Dec. 7 each year. Anyone who is entitled to Part A coverage (whether enrolled or not) or who is currently enrolled in Part B, may join a Part D plan. There may be a Part D premium and yearly deductible. There are limits to what Part D covers, which are outlined in the annual Medicare & You handbook.
Enrollees eligible for both Medicare and Medicaid (“dual eligibles”) currently receive prescription drug coverage through Medicare, not Medicaid.
Help with Medicare Premiums and Deductibles
Help is available for low-income Medicare beneficiaries who cannot afford to pay Medicare premiums, copayments, or deductibles. To find out more about Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), Qualifying Individual (QI), or Extra Help programs, or to apply, call AMOS or the local office of Tennessee State Health Insurance Assistance Program (SHIP).
Medigap (Medicare Supplement Insurance)
Medigap policies are sold by private health insurance companies to fill “gaps” in Original Medicare Part A and Part B coverage. Medigap policies help pay your share (coinsurance, copayments, and deductibles) of the costs of Medicare-covered services; some policies cover certain costs not covered by Original Medicare. In Tennessee, you may choose from up to 8 different standardized types of Medigap policies, which must follow federal and state laws that protect beneficiaries. Medigap policies do NOT work with Medicare Advantage Plans, only with Original Medicare.
A Medigap policy must be clearly identified as “Medicare Supplement Insurance.” You need only one Medigap insurance policy. Before purchasing, be sure the policy provides the coverage you want and can afford. For more information, contact Affordable Medicine Options for Seniors (AMOS) or the State Health Insurance Assistance Program (SHIP).
State and federal laws guarantee your right to purchase the Medicare supplement insurance policy of your choice during an Initial Enrollment Period that begins when you turn 65 and are enrolled in Parts A and B. You cannot be refused or charged more based on health, medical history, or claims experience.
Guarantees of access, called Guaranteed Issue Rights, to Medigap policies are available outside the Initial Enrollment Period in these situations:
- Your employer-provided retiree group health insurance that supplemented Medicare is terminated.
- You dropped your supplement insurance when you enrolled in any Medicare Advantage plan for the first time and elect to leave the plan within 12 months of enrolling.
- You move out of the geographic area served by your Advantage plan.
- Your Advantage plan’s contract with Medicare is not renewed.
- Your Medigap policy coverage ends through no fault of your own.
- You leave an Advantage plan or Medigap policy because the company hasn’t followed the rules or misled you.
In the above situations, fast action is required: Enrollees must choose a Medigap policy within 63 days of losing previous coverage. For more information or assistance, contact Affordable Medicine Options for Seniors (AMOS) or the State Health Insurance Assistance Program (SHIP).
Medicare Advantage Plans
Medicare Advantage plans (Medicare Part C) are approved by Medicare but administered by private companies. When you join a Medicare Advantage plan, you are still in Medicare, but you cannot simultaneously hold a Medicare Advantage plan and Original Medicare. When you have an Advantage plan, you do not need a Medigap policy; it is illegal for anyone to sell you one.
Medicare Advantage plans provide all of your Part A and Part B coverage and must cover medically necessary services. They may offer extra benefits (such as dental care, routine eye exams, and preventive care), and many include Part D drug coverage. However, you must still pay your Medicare Part B premiums in addition to any premiums charged by the Medicare Advantage Plan. The kinds of Medicare Advantage plans available in our area are:
- Health Maintenance Organizations (HMO)
- Preferred Provider Organizations (PPO)
- HMOs with Point of Service (POS) options
- Special Needs Plans
Medicare Advantage plans have networks, which means you may have to see doctors who belong to the plan or go to certain hospitals to get covered services. In many cases, your costs for services can be lower than the Original Medicare Plan.
Although Medicare Advantage plans have many advantages, consumers should understand that providers are encouraged to be as cost-effective as possible. If you are denied services, an appeal is worth pursuing. Each plan has a member services phone number for help with the appeal process.
Medicare Advantage plans available in Tennessee are listed in the Medicare & You handbook. You also can call Medicare or go online to www.medicare.gov.
Factors to Consider When Choosing Coverage
To decide whether to enroll in a Medicare Advantage plan (HMO, PPO, or Special Needs) or remain in Original Medicare, evaluate the pros and cons.
- An HMO limits you to the doctors, hospitals, and health- care providers that have signed contracts with that plan. A PPO allows nonparticipating physician visits with a higher copayment. Original Medicare allows your choice, of physicians, hospitals, and other providers, and covers eligible services anywhere in the U.S.
- Check with all your doctors, specialist(s), and hospital(s) to find out whether they are members of the Medicare Advantage plan you are considering. You may have to change your primary care doctor or specialist if he or she is not affiliated with the plan. If your doctor leaves the plan, you will need to find a physician who participates.
- An HMO may require prior approval from your primary care physician (usually a general practice physician, family care physician, or internist) to see a specialist, have surgery, or obtain medical equipment if you expect the plan to pay; in some instances, you also must have prior approval from the managed care company. Original Medicare allows more freedom in choosing medical providers.
- Some Medicare Advantage plans have low premiums and modest copayments and coinsurance.
- Medical expenses are more predictable under Medigap and Medicare Advantage plans because monthly premiums and deductibles are known in advance.
- Inpatient hospitalization may require a daily copay, which can be very expensive, depending on your plan. Evaluate carefully the inpatient deductible for each type of plan under consideration.
- PPOs allow members to see specialists without a referral and also may offer out-of-network benefits.
- You must continue to pay Part B premiums in all types of Medicare Advantage plans unless you qualify for assistance from the State of Tennessee.
- You should understand clearly what is required by your plan if you need emergency or urgent medical care when you are not in the geographic area served by your plan.
- Benefits, premiums, copayments, and medical providers included in Medicare Advantage plans may change annually, as will the plans available in our area.
- When comparing Medicare Advantage plans, compare copayments, premiums, and added benefits and their costs and limits. For example, what medicines are covered? What is the copay for hospital or nursing home stays?
If you join a Medicare Advantage plan and drop your Medigap policy, you may have Medigap protections that allow a return to your old policy (possibly at a higher cost) or to buy a new one if you choose to leave your Medicare Advantage plan or other Medicare plan within the first year.
You can compare the Medicare Advantage plan choices available in Knox County at www.medicare.gov.