Part A, Part B, Part D, Medicare Advantage, Medigap — so many choices. It can be bewildering for seniors signing up for Medicare for the first time as well as pondering changing plans at open enrollment, which runs from Oct. 15 through Dec. 7.
If that’s you, you’ve got lots of company. About 64 million Americans are in the Medicare system now, and by 2030, that pool is expected to exceed 80 million, when the youngest members of the baby boomer generation come of age.
“The process of enrolling in Medicare for the first time can be paralyzing, confusing, frustrating, all of it, because there are so many different options out there. Generally, you think you want as many choices as you can get, but trying to navigate what A, B and D are as well as what the supplements cover and don’t cover as well as what Medicare Advantage covers can cause some people to shut down and not make a choice at all,” said Jeff Johnson, state director of AARP Florida.
Don’t let that be you.
And if you already have Medicare coverage, it is important to research and re-evaluate every year, Johnson said. “Once the enrollment period comes around, there is a temptation to just let it ride. That may be the best choice, particularly if the networks haven’t changed much, but people often discover too late that they are costing themselves money or shutting themselves off from benefits or providers they would have preferred.”
We’re here to help. We’ve consulted experts to help decipher the alphabet soup that is Medicare. We’ll start with the basics and answer some common questions about what these plans cover and what they don’t. You will learn about the two main ways to get Medicare coverage — Original Medicare or a Medicare Advantage plan.
Medicare covers cancer treatments — about half of the $74 billion spent in the U.S. on treatments last year was through Medicare. You won’t be barred from coverage because of pre-existing conditions or your income level. But does Medicare cover home healthcare? (Spoiler alert: very little.) Who covers vision, dental and hearing? Will you be covered when you are traveling internationally? What if you are a snowbird and have two U.S. residences?
First up: The Basics
You can’t understand Medicare without learning its alphabet.
Part A is part of Original Medicare and covers Medicare hospital coverage. It covers inpatient care at hospitals and limited coverage for skilled nursing facilities when a patient is recovering from an illness or injury. It also covers hospice care.
Part B, also part of Original Medicare, covers doctor visits, outpatient procedures and laboratory tests and X-rays, preventive care and some mental health services and medically necessary ambulance services. It also covers medical equipment such as wheelchairs and walkers.
Part C, more commonly called Medicare Advantage, is a comprehensive privately run managed care option. These bundled plans, similar to an HMO or PPO, offer Part A, Part B and, in Florida, Part D, and are approved by the Medicare system.
Part D covers prescription drugs. These plans are provided by private companies approved by Medicare, and their lists of covered drugs differ.
To pile on to the confusion, there’s more than the ABCs and Ds because about 10 million people across the U.S. have supplemental plans, called Medigap, and those can have letters too. But Medicare itself has Parts A through D, said Tricia Neuman, senior vice president of the Kaiser Family Foundation and an expert on Medicare policy. She explained the differences in a podcast about the basics of Medicare.
Medicare vs. Medicare Advantage
People who opt for traditional Medicare coverage have a Part A, which is premium free, a B and often elect for Part D because it covers prescription drugs. Parts A, B and D carry deductibles and other cost-sharing expenses, so people may also opt for a supplement, or Medigap policy, to cover some of those costs or to give them extra coverage.
Another popular choice is Medicare Advantage plans. They make up about a third of all Medicare policies and are particularly popular in South Florida, where 66 percent of the Medicare population has them, according to Kaiser Family Foundation research. United Healthcare, Humana and Blue Cross Blue Shield are the largest providers.
“Some people like the simplicity of it because they don’t have to buy a separate Medigap policy and a separate Part D plan. Some people like it because they have been with that same insurer through the years and it is familiar to them. Some like it because they see the ads on TV and like the idea of the gym membership or some dental benefits. The premiums and cost sharing can be lower particularly for healthier people with a Medicare Advantage Plan. But there are trade-offs as with any option,” Neuman said.
The biggest trade-off is you have to stay in the network.
“The benefit of joining a Medicare Advantage Plan is that here in South Florida there’s no monthly premium. It’s free to join because they are paid behind the scenes by Medicare for each member they have,” said Kathleen Sarmiento, SHINE Liaison for Floridashine.org with Miami-Dade’s Alliance for Aging.
“But then you have to go to the doctors and the hospitals in that network. Whatever co-payment schedule they have is now your co-payment schedule. They are also county or region based so if you are in a Medicare Advantage Plan you have to go to providers in your area,” said Sarmiento, who runs Miami-Dade’s SHINE, the free unbiased state program that helps seniors navigate their choices.
She advises seniors considering a Medicare Advantage Plan to ask their doctors and preferred hospital which Medicare Advantage Plans they work with.
“And know that that can change,” said Johnson of AARP. There have been instances over the years where hospitals, cancer centers and individual physicians have gone in and out of contract with particular Medicare Advantage providers, he added.
“Many people just choose a Medicare Advantage plan based solely on price tag, which can be very attractive compared to traditional Medicare Part B, Part D and a supplement. But it is worth thinking through how important it is for you to have flexibility to see the providers you want to see.”
What About Costs?
Final details of the 2020 plans, including costs, will be on Medicare.gov. Seniors already on Medicare Advantage plans will get a packet in the mail that includes what their current plan will look like in 2020 and any changes in coverage or costs. That will allow them to potentially make changes during the open enrollment period.
“I would encourage people to think about what their actual health needs are,” adds Johnson. “Spend time on research, and talk to SHINE or go to the medicare.gov website to make sure they are the right choices for this year.”
Medicare plans typically carry deductibles and cost sharing and Part B and D typically carry premiums. People who choose Original Medicare often buy a supplemental “Medigap” policy to cover some of Medicare’s out-of-pocket costs or add extra coverage. Medicare Savings Programs, such as the SLMB, can help low-income seniors afford coverage.
For prescription drug plans, or Medicare Part D, there is the dreaded “doughnut hole” — a gap in which the Medicare drug plans don’t pay fully for patients’ medications after they have spent a certain amount and until they get to a higher amount. The good news is the costs are shrinking a bit. In 2020, you’ll pay no more than 25% for covered brand-name and generic drugs during the gap.
“If somebody is taking a lot of prescription medicine, then definitely we would want to compare the cost of the medicine with original Medicare with the least expensive Plan D vs. the cost of your medicine with Medicare Advantage plans. There can be a substantial difference — it depends on the medicines, of course. Here in South Florida, all the Medicare Advantage plans include drug coverage,” Sarmiento said.
Tip: If you have a money in a health saving account (many employers offered high-deductible health insurance plans with HSA), you can use those savings to pay your Medicare premiums, deductibles, co-pays and other qualified medical expenses. Since you never paid tax on that money, you are essentially reducing what you pay.
What’s Not Covered
Some of the items and services that Medicare doesn’t cover include long-term care, most dental care, eye exams related to prescribing glasses, dentures, cosmetic surgery, acupuncture, hearing aids and exams for fitting them and routine foot care.
You can go here to find out if Medicare Parts A or B cover a test or service you need: https://www.medicare.gov/coverage
Original Medicare, Medigap and Part D do not offer dental, vision or hearing coverage. If that is important to you, you would want to look at Medicare Advantage plans, which do cover some services, Sarmiento said. If you have Original Medicare, it will pay for cataract surgery.
What about home healthcare?
Long-term services and support at home or in an assisted living facility or nursing home are not covered by original Medicare or Medicare Advantage, an unfortunate reality as these costs can wipe out a life savings quickly and more seniors want to stay in their homes.
Some seniors have long-term care insurance, or spend down their assets to qualify for Medicaid, which does cover nursing home care.
All original Medicare and Medicare Advantage provide limited home healthcare when it is medically necessary to avoid hospital re-admittance, Sarmiento said. As of last year, Medicare Advantage Plans could include more home healthcare, but Sarmiento hasn’t seen that offered in South Florida yet.
“When people need home healthcare at this time, they are still having to pay a home health agency or if they don’t have the money, they apply for Medicaid. There is a huge need for that so we will see this year if any of these Medicare Advantage plans expand their benefits to include more comprehensive home healthcare.”
Adds Kaiser Family Foundation’s Neuman: ““If you have dementia and need someone to help you at home, Medicare is not going to cover that on a long-term basis. It never has, and it is an issue that unfortunately has yet to be revisited.”
Will I be covered in both my homes?
A Medigap plan would probably be better for that individual, Sarmiento said. A Medicare Advantage plan will pay for emergencies but will send you back to your primary residence to get ongoing care.
What about international travel?
Original Medicare and Medicare Advantage Plans historically have not covered healthcare you receive outside of the United States, and Medicare drug plans don’t cover prescription drugs you buy outside the U.S.
Medigap Plans C, D, F, G, M and N (there’s that alphabet again, C and F are being phased out for new enrollees beginning in 2020) cover some emergency care outside the United States. In 2019 plans, after you met the yearly $250 deductible, this benefit paid 80% of the cost of your emergency care during the first 60 days of your trip. There is a $50,000 lifetime maximum.
According to Medicare.gov, there are some exceptions, including cases where Medicare Part B may pay for medically necessary healthcare services that you get on board a ship that is not more than six hours away from a U.S. port.
The AARP’s Johnson also offers this parting advice for the busy open enrollment period ahead:
“There are going to be a bunch of people offering free lunch seminars to try to pitch a particular Medicare Advantage Plan. As always be wary — not that there isn’t good information, there often is — but be wary of being pressured to sign.
“We have had people who had enrolled in a Medigap plan and then went to a free lunch somewhere and without really knowing it they switched over to a Medicare Advantage plan that didn’t really fit their needs. While I recognize that everybody looks for opportunities to learn more at events that are out there, it is always a good mantra to remember there really isn’t such thing as a truly free lunch. Be cognizant of the potential for pressure to buy a particular product that may not be right for you.”
People to Contact
Here are organizations that can help you:
SHINE: in Miami-Dade, 305-671-6356, in Broward, 954-745-9567; all areas: FloridaShine.org
Medicare.gov and its Plan Finder, 1-800-Medicare
Email the writer at firstname.lastname@example.org and follow her on Twitter @ndahlberg.