Pulitzer Prize-winning journalist Saul Friedman (bio) writes the weekly Gray Matters column which appears here each Saturday. Links to past Gray Matters columns can be found here. Saul's Reflections column, in which he comments on news, politics and social issues from his perspective as one of the younger members of the greatest generation, also appears at Time Goes By twice each month.
The first shock comes when the kid in the movie booth asks if you’re a senior. Then AARP notifies you that you are eligible for membership. And three months before you turn 65, you should get some really good news - you’re about to get the nation’s best health care insurance, Medicare.
Medicare was passed in 1965 and went into effect within a year. And although it has expanded over the years and now serves more than 47 million older and disabled Americans, its basics have remained the same.
And despite what you may have been told, it is less complicated and more generous than the private insurance that you bought or had through an employer.
However, Monday, November 15 is the beginning of this year’s Open Enrollment period, which ends December 31, but you needn’t fret or rush into anything for it pertains to enrollment in private plans, not Medicare. We’ll get to that later.
SIGNING UP FOR MEDICARE
When you’re about to become 65 and if you’re eligible for Social Security (even if you’re not taking the benefits yet), you will be automatically signed up for Medicare Part A, which pays most bills for hospitalization. There is no cost for this Part A, for in-hospital costs, is financed by the Hospital Insurance Trust Fund and your new Medicare card will reflect you have that coverage.
But I’m getting head of myself. If you have not been notified by Social Security or Medicare that you’re eligible for Medicare, visit medicare.gov to sign up in seconds.
If convenient, visit your Social Security office. You should also explore the Medicare site and, if you’ve got a decent printer, download the guide Medicare & You 2011. You will get a print copy in the mail after you enroll.
For those of you who are new to this or if you need a refresher, today’s Medicare has four parts:
• Part A, as I said, covers hospitalization, rehabilitation in skilled nursing centers and nursing homes, hospice and home care
• Part B covers doctors, outpatient care, lab tests and x-rays. Parts A and B together are original, traditional Medicare
• Part C, the private insurance plans added relatively recently includes HMOs (Health Maintenance Organizations) and PPOs, (Preferred Provider Organizations), now called Medicare Advantage
• Part D, passed in 2003, which covers prescription drugs, either as stand-alone, drugs-only plan or as part of a Medicare Advantage plan
When you are signed up for Part A, you will be given an opportunity to enroll as well in Part B, which is the part of Medicare most often used. Because there was no cost of living adjustment in Social Security this year, the monthly premium for most beneficiaries remains at $96.40, but it’s more on a sliding scale for individuals earning more than $85,000, or $170,000 for couples.
Check the Medicare site for the amount of the higher premiums. This means test, the first ever for Medicare, helped pay for George Bush’s flawed Part D benefit with its donut hole.
If you decline Part B and don’t have other, equivalent coverage, you could be penalized when and if you do sign up. If you have private or employer coverage for doctor and lab visits, you may decline Part B, although some employers are insisting that Medicare-age employees take the coverage to save the company money.
Be careful. If you leave the company or your coverage ends, you have eight months to enroll in Part B with no penalty.
SUPPLEMENTAL (MEDIGAP) COVERAGE
Once enrolled in Part A and B, you have a few choices. Part A’s out-of-pocket costs, which you can learn about in the Medicare & You
That means if you don’t already have a supplemental policy from a spouse or former employer, you may buy one of several standard “Medigap” plans, which depending on cost, will cover part or all of those deductibles and co-pays. You may enroll in a Medigap plan almost anytime, and in most states, even if you have a pre-existing condition. The plan heavily marketed by AARP is as good as any, but the Medicare web site can help you shop.
If you do buy a Medigap policy, then consider a relatively inexpensive, stand-alone Part D drug plan. The advantage of this threesome – traditional Medicare (A and B) plus a Medigap policy and stand alone drug coverage – ends up being less costly, more stable and less risky than the next choice during open enrollment, a Medicare Advantage plan.
Medicare Advantage, as I’ve written, grew out of Republican efforts in 1995 to partly privatize Medicare. Thus Part C, which is heavily subsidized by the federal government, pays private insurers to cover all the basic benefits of Parts A and B but in addition, the insurers offers a drug plan (for extra money) and perhaps some added benefits such as eye examinations.
Nevertheless, MA plans are in business to make profits and they could and do go out of business and leave beneficiaries without coverage if their profits are not high enough. There will be 2,011 MA plans next year, but that’s down from more than 2,800 in 2009. In some rural areas, there are few MA plans available.
Medicare Advantage plans are convenient because they are comprehensive, all-in-one insurance policies. But there are disadvantages of MA plans, aside from taking money from and undermining traditional Medicare:
• You must use doctors and hospitals in the insurer’s network
• You must get the insurer’s approval for some procedures, many doctors have dropped some MA plans because the insurers second-guess the doctor or they are slow in paying
• The monthly premiums for MA plans and their drug plans (in addition to the Part B premium you must pay) have been relatively stable, but increases are expected
• You must pay a co-pay for each doctor or lab visit
• You will need a referral from the primary care physician for each visit to a lab or specialist. If a hospital or doctor specializes in a certain illness or kind of cancer and is not in the network, it may be difficult getting the insurer to pay or continue coverage, especially if the illness is prolonged and costly.
The new Affordable Care Act will prohibit such coverage limits starting next year, but the limits permitted are quite high. Traditional Medicare has no such limit but you can keep track of what Medicare and your supplement pays in the periodic “Medicare Summary Notices” that you will receive. (You may check them to help guard against fraud).
A further warning: The new health reforms include cuts in the federal subsidy for MA plans, which angered thousands beneficiaries, but if the law survives, the subsidy may be cut further in coming years which will put many of these plans out of business.
Meanwhile, if your MA plan or your stand-alone drug plan raised its prices, this enrollment period is the time to shop. While the Medicare web site is user friendly, some of the best information on Medicare can be found on the Kaiser Family Foundation website and for help with problems, try the Medicare Rights Center or the lawyers at the Center for Medicare Advocacy.
I can’t end without a note on one of the most important improvements in Medicare under the Affordable Care Act. Beginning January 1, there will be no charge for a variety of preventive services including a number of life-saving cancer screenings, free flu and pneumonia shots, a “Welcome to Medicare’ physical exam and annual wellness visits to keep track of your health and possible cognitive problems.
Welcome to Medicare.
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