Medicare is a federal health insurance program that pays for much, but not all, of the medical expenses for people 65 and over. It also covers individuals under 65 with certain disabilities. These are the four parts:
- Part A – helps cover inpatient care in a hospital, skilled nursing facility, hospice and home health care.
- Part B – helps cover doctor’s services, hospital outpatient care and some preventative services. For individuals new to Medicare in 2011 the average Part B premium is $115 per month. This amount is higher for singles earning more than $85,000 or couples earning over $170,000.
- Part C – is Medicare Advantage Plans (also known as Medicare Health Plans). These plans are another way to receive your Medicare benefits and are sold by private insurance companies approved by Medicare. They combine the benefits of A, B and often D. To be eligible for a Medicare Advantage Plan you must be enrolled in both A and B.
- Part D – is Medicare prescription drug coverage. Starting this year, 2011, high income earners will pay a surcharge for this coverage.
Here are 8 tips for North Carolina residents turning 65:
1. If you are retired from a government agency or company check to see if they will pay part or all of your Medicare Supplement or drug plan.
2. Since Medicare does not pay for all medical expenses, most Medicare beneficiaries either purchase a Medicare Supplement and a drug plan or a Medicare Advantage Plan with drug benefits from private insurance companies. With either choice you will have to continue to pay your monthly Part B premium. For additional information about Part B you can contact Social Security at 800-772-1213.
3. Medicare Supplements do not cover prescriptions. If you neglect to purchase a drug plan when you are first eligible you may have to pay a higher premium if you decide to purchase one at a later date. Financial assistance is available through government programs if you have a low income.
4. To avoid a break in coverage, being “rated up”(paying a higher premium) or declined due to your health, the best time to purchase a Medicare Supplement, drug plan or Medicare Advantage plan is during the three months before your 65thbirthday.
5. If you are healthy and trying to keep your premiums low, do consider a Medicare Advantage Plan. In addition to offering low premiums and drug benefits, they frequently offer extras you do not get with a Medicare Supplement, such as gym memberships, dental benefits and vision benefits. However, they typically have co-pays, hospital deductibles and restrictive doctor and hospital networks that you do not encounter with popular Medicare Supplement Plans like Plan F.
6. Government sponsored help for selecting your best plans includes the handbooks Medicare and You and Choosing a Medigap Policy, SHIIP (Seniors’ Health Insurance Information Program, 800-443-9354) and www.medicare.gov (800-633-4227).
7. What appears to be your least expensive Medicare Supplement might not be in the future. They can be “rated” in three ways: Community-rated (Everyone in the same area, such as NC, pays the same, but rates can increase due to inflation and other factors.), Entry age (Rates may go up due to inflation and other factors, but not your age.) and Attained-age (premiums increase with age and inflation). Additionally, some insurance companies offer high discounts initially that gradually disappear and leave the beneficiary with higher than anticipated monthly payments.
8. Despite all the resources, selecting the best plans among these complex choices of benefits and companies is confusing for most people. An independent licensed agent who represents multiple insurance companies can help you navigate this myriad of plans and companies. Since these agents are compensated by the companies they represent, you will not pay an extra fee for using an agent versus doing all the work yourself. Wanda Stephens is one of these agents and can be contacted at wanda@hisonc.com or 919-845-6001.
