There may be nothing in the world more challenging than choosing a Medicare plan for seniors in the United States. After spending an entire career having health insurance provided by an employer with rarely more than one or two choices, the dizzying array of Medicare options leaves many seniors simply choosing the wrong plan. To make matters worse, some “experts” are commissioned brokers who may take advantage of seniors by guiding them to plans that pay bigger commissions but offer less effective coverage.
Here are some things you should know when choosing or helping a senior choose the right Medicare plan:
Medicare provides a free book, Medicare and You, to seniors that can be downloaded or ordered for delivery directly from Medicare by calling 1-800-633-4227. The book is also available in formats for easy reading on iPads, Kindles and Nooks.
Seniors can change plans each year (but don’t have to do so). The open enrollment period runs during the fall each year (for 2013 enrollments the period runs October 15 to December 7, 2012) for the plan year beginning on January 1st.
Hospital coverage: Part A covers in-patient hospital stays, skilled nursing care, hospice and home health care.
Medical insurance: Part B covers doctors and other medical professionals, outpatient care, home health care, durable medical equipment and some preventive services.
Medicare Advantage: Part C of Medicare is private plans approved by Medicare that cover the same things as Medicare Parts A and B (most also include coverage for Drugs in Part D, as well) along with other benefits. These plans may be more expensive.
Prescription Drug Coverage: Part D covers prescription drugs. These plans are run by private companies approved by Medicare.
There are four basic parts to Medicare coverage, labeled with the letters A through D:
If you choose a Medicare Advantage plan with drug coverage (Part D) your work is finished, but be aware that Medicare Advantage plans may not cover some expenses as effectively as Medicare Parts A and B and they may be more expensive.
If you choose to stay on Medicare Parts A and B, you need to decide whether to add the Part D prescription drug coverage, which is optional. You may also wish to add a Medicare Supplemental Insurance policy or Medigap Policy.
Your first decision is whether to stay on Medicare Parts A and B or to choose a Part C Medicare Advantage Plan as an alternative.
If you are already receiving social security benefits when you turn 65, you will automatically be enrolled in Parts A and B (A is free; you pay a premium for B). If you are not receiving benefits 90 days before you turn 65, you need to enroll by calling or visiting your local Social Security office or by visiting www.socialsecurity.gov/retirement. You need to enroll during the seven-month window beginning three months before your birth month and three months after your birth month.
If you choose to buy a private, Medigap policy, you must do so during the first six months after turning 65 and enrolling in Medicare Part B.
Navigating your way through Medicare enrollment options can be difficult. There is free help available. Call 1-800-633-4227 to speak to Medicare. You may also get help from your State Health Insurance Assistance Program. Call Medicare to get the number in your state or visit this web site: ShipTalk.org.
Devin Thorpe, husband, father, author of Your Mark On The World and a popular guest speaker, is a Forbes Contributor. Building on a twenty-five year career in finance and entrepreneurship that included $500 million in completed transactions, he now champions social good full time, seeking to help others succeed in their efforts to make the world a better place.