Turning 65: Your Medicare Choices

If you are turning 65 in the next few months, you have choices to make concerning your Medicare coverage.  Are you still working and have employer coverage? Will you consider enrolling in a Medicare Advantage plan? Do you think a Medicare Supplement will be better coverage?

Here is some information to get started in understanding your Medicare choices:

MEDICARE ONLY: You will be responsible for the Part A hospital deductible ($1,100 ). You will pay the Part B deductible ($155). You will be responsible for 20% of the cost for doctor visits and services, lab tests, emergency room treatment, ambulance, chemotherapy, radiation therapy, physical therapy, and most medical care you receive outside a hospital.  THERE IS NO CAP TO YOUR 20% CO-INSURANCE.   The Medicare Part B premium is $110.50 per month.

MEDICARE SUPPLEMENTS: These work with your Medicare to give you more complete coverage. Also known as “Medigap ” plans, these fill the gaps in Medicare. A Medicare Supplement Plan F will generally leave you with no medical bills because Medicare will pay first and your Plan F Medicare Supplement will pay the balance after Medicare has paid.  I always say, “think FULLEST coverage when you think of PLAN F”.

Medigap plans are named by letters: A, B, C, D, F,  G, K, L, M, N   and each one covers the gaps in a slightly different way. Because F offers the fullest coverage, it has the highest monthly premium.  Plans M and N are new in June.  Plan N is very much like Plan F except you will pay a $20 co-pay for doctor appointments, $50 for an emergency room visit, and $155 for the Part B deductible. Because of these co-pays, the monthly premium for Plan N is generally 25% less than Plan F.

Medigap plans in Arizona cost between $85 per month for Plan N and $129 per month for plan F.  A Plan F is exactly the same from company to company, except that the premium will differ from company to company.

MEDICARE ADVANTAGE:  These are private Medicare plans offered by insurance companies – and they replace your Medicare. If you enroll in an Advantage plan, you won’t use your Medicare card because Medicare doesn’t pay your bills.  You will use the card given to you by your Medicare Advantage (MA) plan and your MA plan will pay your bills.  Many MA plans in Arizona have a $0 premium, though you must pay your Medicare Part B premium ($96.40 or $110.50/month). You will have co-pays for every medical service. For example, you might pay $15 when you see your primary care physician.  And you might pay $45 to see a specialist. Then there are hospital co-pays, emergency room co-pays, co-pays for labs, x-rays and other services.

Almost half of all Medicare beneficiaries in Maricopa, Pinal, and Pima counties are enrolled in these private Medicare plans. People like them because they usually include a Part D drug plan. Most have a monthly premium between $0 and $60.  The premium is low because these plans almost always involve a local network (HMO or PPO) – and because Medicare pays a lot of money to the insurance companies to provide your Medicare coverage.  Most Advantage plans offer free gym memberships.

Most Medicare Advantage plans have a network of doctors and hospitals, and you must stay in the network.  Most Advantage plans are HMO’s which require you to have a primary care physician who gives you referrals to specialists. Most plans will require you to get prior authorization for certain tests, treatments, and hospitalization (except in an emergency situation).  If you do not follow all the rules, bills will not be paid by the plan.  Each MA company has different co-pays, rules, and networks – though many doctors are contracted with multiple MA plans.

PART D: This is the drug plan which Medicare wants you to have (and pay for). If you get a Medicare Supplement you should also sign up for stand-alone Part D plan.   Part D is offered by insurance companies that are contracted with Medicare.  In Pima county there are 46 Part D plans to choose from and each has a different monthly premium and a different formulary (list of drugs covered).

Part D premiums range from $17 to $70 per month.  Before signing up for a plan, you need to be sure your drugs are covered by that plan and what your co-payment will be.  If you are enrolling in a Medicare Advantage plan, Part D usually comes with the plan.  But you still must make sure all your drugs are covered and what your co-pay will be.


PS:  If you are working for a large employer and have group health insurance, you won’t need to use your Medicare or pay the Part B premium.  Your employer must keep you and your spouse on the group health plan.

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