By Dan Yaseen
If you are 65 or older, disabled or turning 65 you have to deal with Medicare. Understanding Medicare can be a daunting task for many people. The Social Security Act Amendments of 1965, signed into law by President Lyndon B. Johnson, established Medicare and Medicaid. President Harry S Truman was the first U.S. President to propose a national health insurance program for the people who were in the Social Security system. On July 30, 1965, President Johnson signed the Medicare and Medicaid Bill in Independence, Mo., in the presence of President Truman, who received the first Medicare card. Seniors love their Medicare and with good reason: It makes healthcare affordable.
Both older Americans and people living in poverty benefited from passage of the Social Security amendments. Medicare initiated a basic program of insurance for those aged 65 and older, funded by a tax on employees’ wages and matched by employer contributions. Medicaid, called Medi-Cal in California, provided grants to states to establish healthcare programs for low-income individuals and families. In 1972, another Social Security amendment added two additional groups of people to Medicare—the disabled and those who suffered from end-stage renal disease.
Signing up for Medicare
If you or your spouse (or former spouse) paid into Medicare you are eligible once you reach 65. You don’t have to be retired to sign up for Medicare. Even if you are covered by your employer, you should sign up for Part A. If you are already on Social Security, Medicare will automatically sign you up and notify you. Otherwise, it’s your responsibility to enroll on your own either online (www.socialsecurity.gov/medicareonly/) or by visiting the nearest Social Security office.
ABCD of Medicare/Medicare Supplement
Medicare is administered by the Centers of Medicare and Medicaid Services. It has four different parts. Original Medicare (Parts A and B) provides a lot of coverage, but it doesn’t cover everything. There are two ways you can get coverage to help with the deductibles, co-pays and co-insurance that you have to pay under Original Medicare. They are Medicare Supplement insurance and Medicare Advantage plans (Part C).
Part A: Also called Hospital Insurance, Part A covers inpatient hospital care, a skilled nursing facility, hospice and home healthcare. Part A is free if you, your spouse or your former spouse has paid Medicare taxes for more than 40 quarters. If you paid 30–39 quarters, your 2012 premium will be $248 per month, and if you paid less than 30 quarters your premium will be $451 per month.
Part B: Also called Medical Insurance, Part B covers doctors’ services, hospital outpatient care, home healthcare and preventive services. For 2012, the Part B premium is $99.90 per month. Beneficiaries with income greater than $85,000 and married couples with income greater than $170,000 will pay a higher monthly premium.
If you sign up late for Medicare Part B, you will have to pay a significant penalty every month, along with your Part B premium. You will pay this penalty as long as you have Medicare Part B. You may not have to pay the penalty if you had health insurance through your job or your spouse’s job when you were first eligible to sign up for Medicare Part B.
Part C: Also known as Medicare Advantage plans. You must have both Part A and Part B to enroll in a Medicare Advantage plan. These plans can be purchased from Medicare-approved private insurance companies. By law, these plans cover everything that Medicare Parts A and B cover. Medicare Advantage plans pay instead of Medicare, not in addition to Medicare. The deductibles, co-pays and co-insurance are lower than Original Medicare. There is an annual out-of-pocket maximum after which you have 100% coverage; there is no out-of-pocket maximum with Original Medicare. Coverage includes emergency and urgent care. Some plans may even include routine vision, routine dental and/or wellness programs.
There are different types of Medicare Advantage plans, but in Fresno and the vicinity only HMOs (health maintenance organizations) are available. These HMOs also cover Medicare Part D, prescription drug coverage. Medicare Advantage plans have low or zero premiums.
Part D: Prescription drug coverage was enacted as part of the Medicare Modernization Act of 2003 and went into effect on January 1, 2006. This coverage can be purchased only from Medicare-approved private insurance companies.
You are eligible for prescription drug coverage under a Part D plan if you are entitled to benefits under Medicare Part A and/or are enrolled in Part B. Beneficiaries can obtain the Part D drug benefit through two types of Medicare-approved private plans: They can join a stand-alone prescription drug plan for drug coverage only or they can join a Medicare Advantage plan that covers both medical services and prescription drugs.
If you don’t sign up when eligible for Medicare Part D, you will have to pay a significant penalty every month, along with your Part D premium. You will pay this penalty as long as you have Medicare Part D. You may not have to pay the penalty if you are low income or if you had other drug coverage through your job, your spouse’s job, retiree coverage or the Veterans Administration.
Medicare Supplement Insurance: Medicare supplement insurance, which is sold by private insurance companies, helps cover expenses that Medicare does not cover—deductibles, co-pays and co-insurance. You must be enrolled in both Medicare Part A and Part B to purchase a Medicare supplement insurance plan.
There are 10 standardized plans (Plans A, B, C, D, F, G, K, L, M and N). Each plan provides different coverage.
I realize that this is a complex subject. This short article can’t answer all the questions that you may have. For more information or if you have specific questions, please call me at 559-251-3361.
*****
Dan Yaseen is an independent insurance broker who has specialized in senior health and life insurance for more than 30 years. He is on the editorial board of the Community Alliance newspaper. Contact him at danyaseen@comcast.net or 559-251-3361.
