Managing The Medicare Maze In Retirement

Includes: DVY, SDY
by: Joe Eqcome

Note: The Open Enrollment Period to change your Medicare health or prescription drug coverage ends on December 7. As long as the plan gets your request by that date your new coverage will begin on January the 1st 2012.

Health Care Coverage in Retirement: Your health care cost is a significant expenditure in retirement. Medicare provides a number of options available to retirees for managing their health care cost and benefits. The following is a premier regarding some the issues retirees must consider—particularly, if they are approaching retirement.

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Initial Response to Medicare: An enrollees initial response to Medicare, the U.S. sponsored health insurance program primarily for seniors (those who are 65 and older) established in 1965 as an amendment to the Social Security Act of 1935, is one of confusion.

Rules, Options & Choices: The program has many rules, options and choices that may take an eligible beneficiary some time to get to know prior to making the appropriate health care insurance choices. Most important is an understanding of the enrollment process and dates for enrollment. Delaying enrollment in the various Medicare “Parts” (see chart below for brief description) can result in a monetary penalty in the form of an increased monthly premium over a certain period of time.

Medicare Enrollment Table: The table below is a quick summary of the various Medicare “Parts” that cover inpatient and outpatient medical services, prescription drug coverage, as well as alternatives in deciding how you would like to have your health care services paid for and delivered.

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Medicare is very user friendly and most questions can be answered by visiting its website or calling the toll free number (1-800-633-4227).

Navigation of the Medicare Maze: The chart below is a schematic of walking through your options as you’re considering your Medicare healthcare insurance coverage.

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Step 1: A decision on how an enrollee wants to receive his or her health care coverage. You have two choices.

1. The first is to opt for the Original Medicare Program which consists of Part A (Inpatient Insurance, e.g. hospital patient, etc.) and Part B (Outpatient Insurance, doctor visits, etc.). Typically, Part A doesn’t require a premium. These premiums are supported by funds collected as part of employment payroll tax. However, Part B does require a current “out of pocket” premium payment for coverage.

2. Your alternative choice to the Original Medicare Program is to select a Medicare Advantage Plan (Part C) which functions like a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO). You may already be familiar with these health care alternatives through you group health insurance plans. These plans are provided by private insurance companies whose plan offerings have been reviewed and approved by Medicare. These plans combine both Part A and Part B and usually Part D. Such plans are flexible and provide a wide array of premiums and services depending on your health care coverage needs.

Step 2: A decision to add prescription drug coverage. As previously mentioned, in the case of Medicare Advantage (Part C), such offerings usually provide for prescription drug coverage. However, if the enrollee chooses the Original Medicare Program, or if the Medicare Advantage you’ve selected doesn’t provide for prescription drug coverage, then in either case, the enrollee has the option of receiving prescription drug coverage under Part D for a monthly premium.

Step 3: A decision for those choosing the Original Medicare Program option: a choice to add supplemental insurance coverage through a “Medigap” policy. A Medigap supplemental insurance policy is provided by private insurers for an additional monthly premium.

Note: If you decide to opt for the Medicare Advantage (Part C), then you don’t need and can’t by law be sold a Supplemental Insurance Policy (Medigap) or a policy by any other name.

Again, to gain more information on Medicare, you can visit its very robust website.

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