It’s time to do a Medicare health-insurance review if you or a close relative
is 65 or older.
Each year, from Nov. 15 through Dec. 31, you can join, switch, or drop your
current prescription drug coverage plan. It is also the best time to sit down
and review all your coverage.
In this three-part series, I will outline the ABCs of Medicare , tell you
what has changed, and provide some tips to consider.
Stepping through the ABCs
If you are 65 or over and don’t have insurance through your current or former
employer, you have two choices on how to get health coverage.
Original Medicare , which is managed by the federal government, is broken
into Part A (hospital coverage) and Part B (medical/physician coverage). With
Original Medicare you can see any doctor, specialist or hospital that accepts
Medicare. Original Medicare pays providers 80% of approved amounts so you are on
the hook for the remaining 20%, an amount you are unlikely to know ahead of
seeing a physician. Also, Original Medicare does not cover all costs so you need
to buy supplemental coverage (we discuss this below) to fill in the gaps.
Most people don’t pay for Part A coverage, but Part B will cost you a premium
of $96.40 per month in 2008. If your modified adjusted gross income is greater
than $82,000 (or $164,000 for joint filers) then your premium amount will be
adjusted higher. Part B benefits don’t kick in until you meet a $135 yearly
deductible.
Your other choice is to use a Medicare Advantage plan offered by a private
insurer (this is Part C of the Medicare program). You will pay a set co-payment
for doctor visits so you will know in advance your cost obligations. On the
downside, you will often be limited to a network of providers, and comparing
health plans from different insurers is challenging.
Simplicity is one of the main advantages of joining an MA plan. With such a
plan you receive more complete coverage, so there is no need to buy additional
supplemental insurance, including prescription drug coverage.
Narrowing down the ones you want to look at is the tough part. My
recommendation is to call your physicians first and find out which plans they
take (they will also probably know what plans the local area hospitals belong
to). Once you have eliminated the ones your physicians don’t accept, you will
need to dig into the details to compare cost and coverage among the plans.
Keep in mind that the plan premium amount does not include the Part B premium
you have to pay to Medicare. So if the plan charges $19 per month, that is on
top of the $96.40 Part B premium deducted from your Social Security check.
Ratings Inc., in 1999, and is the senior analyst responsible for assigning
financial safety ratings to health insurers and supporting other health
care-related consumer products including Medicare supplement insurance,
long-term care insurance and elder care information.
