Medicare 101

What is Medicare?

Medicare is a government health insurance program administered by the Centers for Medicare & Medicaid Services for those who are 65 or older, under 65 with certain disabilities, or for those who have End-Stage Renal Disease at any age. With around 40 million Americans participating, Medicare is the largest health insurance service in the country.

It is important to recognize when or if you need to elect Medicare if you are 65 or older and actively employed, or if you are a spouse (65 or older) of an actively employed individual. If you do not enroll correctly, you may be subject to penalties by Medicare and claims could be denied or partially paid.

Medicare Enrollment

If you are collecting Social Security benefits, you should be automatically enrolled in Medicare Part A when you turn 65. If you are not collecting Social Security benefits, you will need to contact the Social Security office to enroll in Medicare or you can enroll via the web at socialsecurity.gov/medicare.

Medicare when you are actively employed

Actively working for an employer under 20 employees

• Medicare is the secondary payer if you have employer coverage

• Active employees 65 and older can enroll in Part A (no cost) but do NOT need to enroll in Part A or Part B

• Employee may be better off enrolling in a Medicare Advantage plan (Part C and Part D) as the premiums may be significantly reduced (First require Parts A and B)

Actively working for an employer over 20 employees

• Medicare is the secondary payer if you have employer coverage

• Active employees 65 and older can enroll in Part A (no cost) but do NOT need to enroll in Part A or Part B

• Employee may be better off enrolling in a Medicare Advantage plan (Part C and Part D) as the premiums may be significantly reduced (First require Parts A and B)

• Actively working for an employer with controlled ownership of multiple companies

• Medicare is primary for all entities. Employees should enroll in Medicare. Employer is primary. Employees not required to enroll. Employers is primary ONLY for the entities that have +20 employees

• IMPORTANT: If you are on Medicare-Disability (under age 65), Medicare is the primary payer for employers less than 100 employees.

• You are no longer able to contribute towards a Health Savings Account (HSA) if you are enrolled in any parts of Medicare

• You must maintain a plan with Creditable Prescription coverage (see Bond “Compliance Packet” to determine if the plan you are enrolled in has Creditable Prescription coverage). If you do not have creditable drug coverage, your future Medicare Part D premiums will be penalized by paying a higher premium

• You have the option of purchasing a Medicare Advantage (MA or Part C) plan with or without prescription drug coverage (Part D) directly from various insurance companies (Excellus, MVP, etc.)

• Please see www.medicare.gov for more information on Medicare.

A Medicare Supplement Insurance (Medigap) policy, sold by private companies, can help pay some of the health care costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles.

Some Medigap policies also offer coverage for services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share.

A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.

8 things to know about Medigap policies

• You must have Medicare Part A and Part B.

• If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.

• You pay the private insurance company a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.

• A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.

• You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.

• Some Medigap policies sold in the past cover prescription drugs, but Medigap policies sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D). It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Medical Savings Account (MSA) Plan.

• Medigap plans are accepted nation wide and many of the plans also include foreign traveler coverage.

• Typically as long as the doctor accepts Medicare they are required to accept whatever Medicare supplement plan you have. Unless it is a Medicare supplement select plan. However these plans are not offered by many companies any longer and are not a popular choice anymore.

Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, you still have Medicare. You’ll get your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage from the Medicare Advantage Plan and not Original Medicare.

Covered services in Medicare Advantage Plans

Medicare Advantage Plans cover all Medicare services. Medicare Advantage Plans may also offer extra coverage. Learn more about what Medicare Advantage Plans cover.

Rules for Medicare Advantage Plans

Medicare pays a fixed amount for your care each month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare.

However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan for non-emergency or non-urgent care). These rules can change each year.

Costs for Medicare Advantage Plans

What you pay for a Medicare Advantage Plan depends on several factors.Learn about these factors and how to get cost details.

Drug coverage in Medicare Advantage Plans

You usually get prescription drug coverage (Part D) through the plan. In some types of plans that don’t offer drug coverage, you can join a Medicare Prescription Drug Plan.

Medicare offers prescription drug coverage to everyone with Medicare. If you decide not to join a Medicare Prescription Drug Plan (Part D) when you’re first eligible, and you don’t have other creditable prescription drug coverage, or you don’t get Extra Help, you’ll likely pay a late enrollment penalty.

To get Medicare drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered.

2 ways to get drug coverage

1. Medicare Prescription Drug Plan (Part D). These plans (sometimes called “PDPs”) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.

2. Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance)and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.

Find a Medicare drug plan.

How to join a drug plan

Once you choose a Medicare drug plan, here’s how you may be able to join:

• Call MIC (855-830-6099).

• Enroll on the Medicare Plan Finder or on the plan’s website through medicare.gov.

• Call 1-800-MEDICARE (1-800-633-4227).

When you join a Medicare drug plan, you’ll give your Medicare number and the date your Part A and/or Part B coverage started. This information is on your Medicare card.

Joining a Medicare drug plan may affect your Medicare Advantage Plan

If your Medicare Advantage Plan (Part C) includes prescription drug coverage and you join a Medicare Prescription Drug Plan (Part D), you’ll be disenrolled from your Medicare Advantage Plan and returned to Original Medicare.