Top 10 things to know about Medicare:
These are the top 10 things to know about Medicare, whether you’ve already signed up, or whether you’ve been on Medicare for years, keep in mind these ten tips about Medicare.
Medicare Part A covers Hospitalization.
Almost everyone gets Medicare Part A free of charge, because the requirement is to have worked 40 quarters. If you did not work 40 quarters then you will pay for Medicare Part A. There are co-pays and deductibles with Medicare Part A, and after a certain amount of time in the hospital, it doesn’t cover you at all.
Medicare Part B covers your Doctor bills and other outpatient services.
Unless you are on Medicaid (Medi-Cal in California) you will pay for Medicare Part B. The cost for this is normally taken out of your social security check, or if you are not receiving Social Security, you can pay quarterly. If you do not sign up when you are initially eligible and you do not have creditable coverage, you may pay a penalty when you do sign up, and you may have to wait until open enrollment to obtain coverage.
COBRA is not considered Medicare creditable coverage, so if you are over 65, you may want to skip COBRA and go straight onto Medicare to avoid paying penalties later.
Medicare Part C is optional.
This is also known as a Medicare Advantage Plan. If you have Part C, you are giving up Parts A and B (and normally D) to have a private insurance company manage your Medicare Insurance. You get some additional benefits (such as an out of pocket maximum) that you do not get if you keep original Medicare Parts A and B without a Supplement Plan. The Insurance company that manages your Part C gets a monthly stipend from Medicare to do this. These plans are normally less expensive on a monthly basis than a Medicare Supplement Plan, but normally offer less flexibility in doctor choices.
Medicare Part D (Prescription Drug Plan) is also optional, but because there is a penalty if you do not have creditable coverage, and sign up for it later.
Medicare Supplement Insurance Plans (also known as Medigap Plans) are also optional.
You should not have both a Medicare Advantage Plan (MA or MAPD) AND a Medicare Supplement Plan (Medigap). The Medigap will not pay the copays and deductibles of an MA or MAPD plan. If you obtain a Medicare Supplement Plan you will need to obtain a Part D drug plan separately. These plans allow the most flexibility in choosing a doctor.
If you have high income you will pay more for both Medicare Part B and also Medicare Part D.
Medicare has a booklet that you can receive free of charge here that explains the higher costs.
If you have a Medicare Advantage Plan or a Prescription Drug Plan, you should shop your plan every year.
You will receive an Annual Notice of Change which explains the changes to the plan. Every year your plan will most likely change, so don’t “set it and forget it”. You can change your plan during open enrollment which is October 15th through December 7th of every year. The new plan will go into effect on January 1 of the following year.
If you have a Medicare Supplement Plan in California, you should also shop your Supplement Plan within 30 days of your birthday.
Since Supplement Plans are standardized, there is virtually no difference between them except the monthly premium, the financial strength ratings, and the customer service.
Medicare does not cover any custodial or Long Term Care.
It does cover Skilled Nursing (up to 100 days) and limited home health care but you will need a Long Term Care Insurance Policy to cover custodial care.