Aging into Medicare

By Lorraine Iron Cloud, Scripps Health

According to the U.S. Census Bureau, there are more than 40 million Americans 65 years and older. This age group is the fastest growing demographic in the nation, with the first baby boomers aging into Medicare in early 2010. While reaching this milestone is certainly reason to celebrate, it also means having to prepare and navigate through the increasingly complex world of health insurance between the ages of 64 and 65.

As you approach 65, you need to decide between the many options offered by government-run Medicare and other private health insurance programs. This is especially important in the three months before and after your 65th birthday. Acquiring information, asking questions and finding helpful resources are keys to making these important decisions.

Medicare is a health insurance program administered by the Centers for Medicare and Medicaid Services (CMS) for people 65 years of age and older, under age 65 with certain disabilities, or those with end-stage renal disease (ESRD).

Following is an overview of Medicare and information on your coverage options.

Medicare Basics

Medicare benefits are divided into four parts:

Medicare Part A (Hospital Insurance)

This helps cover your inpatient hospital care and can help cover home health care, hospice and skilled nursing care (not custodial).

Medicare Part B (Medical Insurance)

This covers your care by a physician including outpatient care, physician appointments, some preventive care and medical equipment.

Medicare Part C

This is also referred to as Medicare Advantage. These options are handled by Medicare-approved private insurance companies. Medicare Advantage Plans are a way to get the benefits and services covered under Part A and B.

Medicare Part D

This helps cover the cost of prescription drugs and is run by Medicare-approved private insurance companies. Co-pays on medications will vary based on the insurance carrier and whether the prescription medication is part of their list of medications – also called the “formulary.”

Make sure you sign up for B and D during enrollment periods to avoid penalties. The enrollment period for Part B and D begins three months before you turn 65 and lasts seven months. If you don’t enroll during this time, your coverage will be delayed and your premiums will be higher. However, if you are still working, your enrollment rules may be slightly different. Check with your employer.

Obtaining Medicare Coverage

There are two main ways to obtain Medicare coverage—Original Medicare and Medicare Advantage plans. These steps can help you decide.

Step 1: Decide if you want Original Medicare or a Medicare Advantage Plan.

Original Medicare includes Part A (Hospital Insurance) and/or part B (Medical Insurance).

Medicare provides this coverage directly. You have your choice of doctors, hospitals, and other providers that accept Medicare. Generally, you or your supplemental coverage pay deductibles and coinsurance. You pay a monthly premium for Part B.

A Medicare Advantage Plan (Part C) is similar to an HMO or PPO and includes both Part A and Part B. Private insurance companies approved by Medicare provide this coverage. Most plans require you to use plan doctors, hospitals, and other providers or you may pay more or all of the costs. You usually pay a monthly premium (in addition to your Part B premium) and a copayment or coinsurance for covered services. Costs, extra coverage, and rules vary by plan.

Step 2: Decide if you want prescription drug coverage (Part D).

If you choose Original Medicare and want this coverage, you must join a Medicare Prescription Drug Plan.  These plans are run by private companies approved by Medicare, and usually include a monthly premium.

If you choose a Medicare Advantage Plan and you want prescription drug coverage, in most cases you must get it through your plan. If your plan doesn’t offer drug coverage, you can join a Medicare Prescription Drug Plan.

Step 3: Decide if you want supplemental coverage.

If you have Original Medicare and want to get coverage that fills in the gaps, you can choose to buy a Medicare Supplement Insurance (Medigap) policy from a private company. These costs vary by policy and company. Employers and unions may offer similar coverage.

If you join a Medicare Advantage Plan, you can’t be sold a Medigap policy.

In addition to Original Medicare or a Medicare Advantage Plan, you may be able to join other types of Medicare health plans. You may be able to save money or have other choices if you have limited income and resources. You may also have other coverage, like employer or union, military, or veterans’ benefits.

You may also want to check with your doctor on which programs will work best for you based on your current health care needs. To get the facts about the latest changes with Medicare, call 1-800- Medicare or go to medicare.gov. Additional information is available through your current or former employer, HICAP (Health Insurance Counseling and Advocacy Program) 1-800-434-0222 or 858-565-8772 and the Medicare & You 2012 handbook available through Medicare.

Lorraine Iron Cloud, MBA, is the primary care marketing director with Scripps.  For a referral to a Scripps primary care physician who takes Medicare and Medicare Advantage plans, call 1-800-SCRIPPS (1-800-727-4777).