You are facing a multitude of decisions as you transition on to the Federal Medicare programs. For most people the decisions they face can be overwhelming. Medicare programs, like the new prescription drug plans offered as stand alone plans and the drug plans included in Medicare Advantage health care plans, make your decisions even more complex.
One of the cornerstones for a safe, secure and happy retirement includes proper health care planning which is appropriate for your individual situation. Making smart, insightful choices now will give you peace-of-mind in knowing that your health care plans have been examined and implemented based on your personal situation and designed to meet your current and future health care needs!
Prior to turning 65 you should receive a consumer’s guide detailing the Medicare programs. You should also receive the red, white and blue Medicare ID card 60-90 days prior to your 65th birth month. If you do not get the Medicare ID card in the mail at least 30 days prior to your 65th birth month contact Medicare and find out why. When you get the ID card it should indicate on the card that you are being enrolled in Medicare part ‘A’ and Medicare part ‘B’.
Your eligibility for Medicare parts ‘A’ and ‘B’ can be based on a number of different factors. Most people qualify for Medicare hospital part ‘A’ benefits at no additional costs. However, medical part ‘B’ premiums will be starting at $96.40 per month for 2008. The Part ‘B’ premium is usually deducted from your Social Security check. High income individuals will pay more on a sliding scale. If you do not take your Social Security income at 65, you will be required make direct payment to Social Security for the medical part ‘B’ coverage. In the majority of cases you should be sure to enroll in the medical part ‘B’ program. Late enrollment in part Medicare part ‘B’ can be very costly.
If you are still covered by a group health plan through your employer or your spouse’s employer your options are different than what we have discussed above. Several other issues come into play. How you are individually affected is based on many factors unique to your individual situation. The 2008 Medicare buyers guide outlines the multitude of choices you face including some of the following information.
Congratulations! Now you must decide if you just want Medicare or should you purchase or enroll in one of multitude of different plans available in Arizona to either administer (under annual contract) or supplement Medicare. The good news is you have the ability to select virtually any plan without proof of insurability. If however, you currently have end stage renal disorder you may not be eligible for Medicare Advantage plans.
Medicare part ‘D’ (Prescription Drugs) went into effect January 1, 2006 and affected over 42 million Medicare beneficiaries. Your drug usage and plan formularies are the most critical factors in choosing which plan is best for you. These plans are subject to benefit and cost changes annually.
Confusion has been widespread regarding many aspects involving the stand-alone plans and the Medicare Advantage health care plans that may or may not include this new Medicare part ‘D’ benefit. Basically, if you enroll an MA-PD Plan (Medicare Advantage with prescription drugs), you are not allowed to enroll in a stand-alone prescription drug plan. If you enroll in a traditional Medicare supplemental insurance plan, you should also select a stand-alone prescription plan. You can also select an MA plan (Medicare Advantage no prescription drugs) and in this case you should also select a stand-alone prescription plan.
You are not required to enroll in any plan for prescription drugs under Medicare part ‘D’. However, the penalty for late enrollment is currently 1% per month for each month you delay enrollment. In addition, if you do not enroll during your initial enrollment period (turning 65) you will not be allowed to enroll in any stand alone plan ‘D’ until the next annual election period. (Currently November 15th through December 31st.) Many other rules apply depending on your individual situation. For example; you may be using the VA for your prescription drugs or you may have prescription drugs available through your retirement health care plan.
Private insurance companies offer these plans. They allow you the freedom to go to any medical provider that accepts Medicare beneficiaries. You have the freedom to seek medical care anywhere in the country and may also have benefits out of country with some of the plans offered. These plans are discussed in your Medicare guide and letters ‘A’ through ‘L’ identifies them. Regardless of the insurance company plan you purchase, benefits are standardized. In other words, if you buy plan ‘F’ from ABC Company the benefits are identical to the plan ‘F’ benefits with XYZ Company. Lower premium, high deductible plans are also available, called Medicare select plans.
Traditional “Fee for Service” plans are usually more costly on the basis of premium paid, verses Medicare Advantage plans. They are designed to pay benefits in addition to Medicare and are secondary to Medicare. Traditional “Fee for Service” plans do not currently offer prescription drug benefits and you should consider purchasing one of the stand-alone prescription drug plans for Medicare part ‘D’.
The health care provider bills Medicare, then the insurance company pays some or all of the remaining charges depending on the plan selected. This type of plan has been around longer then any other type of insurance plans to date. You are still required to pay the Medicare part ‘B’ premium. Competition from lower cost Medicare Advantage plans is resulting in a mass exodus from these traditional plans. Lower income beneficiaries who cannot afford to pay the higher premiums for this type of coverage have been gravitating towards Medicare Advantage plans particularly in the rural areas.
Private insurance company’s contract with Medicare to process all Medicare claims for the person enrolled in the plan. The individual still pays the Medicare part ‘B’ premium, that premium is then assigned to the private insurance company by Medicare to process all Medicare claims. The private insurance company may charge a separate premium for the additional benefits offered by the plan.
One of the unique features of this type of plan is the monthly premium cost is usually lower than traditional plans. It is similar to traditional “Fee for Service” plans because you are not required to see providers of any contracted network. The plan allows the enrollee the freedom to see any provider willing to bill the insurance company for services. The enrollee only shows the health care provider one ID card and the provider submits all claims to one insurance company.
The provider is not required to contract with the insurance company. The health care provider submits billing to the insurance carrier directly not Medicare. Unlike traditional Fee-for-Service plans, these plans can vary dramatically from one PFFS plan to another. They are not standardized like the traditional “Fee-For-Service” Plans. Some offer (PDP) prescription drugs part ’D’, some do not.
We caution everyone considering this type of plan to carefully compare the PFFS plans because of the dramatic differences in the PFFS plans currently offered. Always check with you providers to be sure they are willing to bill the sponsoring plan.
The name says it all! You are required to see providers in network if you want the plan to pay the higher benefit levels and have lower co-pays. If you are out-of-area and out-of-network expect benefits to be reduced considerably. Some plans are local county networks only and some are regional or statewide networks. You are not required to stay in network and can see any health care provider willing to bill your insurance plan. If the provider is unwilling to bill the plan you must pay the provider and submit the claim the old fashioned way for reimbursement. The Medicare part ‘B’ premium is assigned to the insurance company and they process all your claims. These plans are usually lower monthly premium cost verses traditional supplemental plans. These plans usually include prescription drug coverage and benefits and coverage options vary considerably by plan.
The HMO plans in Arizona are predominately offered in the larger populated areas. The plans feature low monthly premium costs and require the enrollee to select a primary care physician who manages the patients care. You are usually required to see the primary care physician for referrals to network specialist. Care received outside the servicing area is usually only provided for emergency care, not routine or non-emergency care.
The plan choices are limited in the rural areas of the state and in the urban areas the plan options vary widely. These types of plans appeal to those people traveling on a limited basis or are comfortable with the managed care approach for their health care. The individual who spends extended periods of time out of the servicing area runs the risk of paying for care out-of-pocket if it is deemed to be a non-emergency situation. The enrollee continues to pay the Medicare part ‘B’ premium.
These plans are relatively new and only a few insurance companies are currently offering them. If you are in good health and have the resources to cost share your medical expenses, this type of high deductible plan could be your least costly option in the long run and give you the freedom to self manage your health care needs. Details regarding this program vary by county and state. Contact us for specific details on whether this approach would be suitable for your situation.
John Rada & Associates can help you select the most suitable type of Medicare health plan to meet your needs. Contact us today and find out how we can help you.
John Rada & Associates offer Medicare health insurance planning, Long-Term Care, Life insurance, and fixed Annuities.
For other insurance and professional services not available directly through our agency we refer you to specialists in your area to assist you with individual and group major medical insurance (for those people not on Medicare), disability insurance, and property and casualty insurance, investment, financial, legal, and accounting services. Please contact us directly or go to our links page on this site for more information about our network of qualified professionals in your area available to assist you.
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