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Published: July, 2011; Vol 8, Num 2

 

Medicare

For obvious reasons, one of the most important considerations as we get older is health care.

Older Americans are guaranteed a designated level of quality health care through Medicare. Coverage begins at age 65, but you must register and decide on a number of options. People with disabilities may be eligible at younger ages.

The options make initial decisions about Medicare complicated, so it is wise to begin assessing your options well in advance of turning 65. To help with these decisions, the AARP maintains an excellent website.

Original Medicare or Plan C?

The first decision you must make is whether to sign up for Original Medicare (Plan A and Plan B) or Medicare Advantage (Plan C) which is a variety of Medicare-approved plans offered by private insurers.

When you register for Medicare, you are first assigned to Plan A, the hospitalization plan that covers hospitalizations, nursing care and skilled nursing services after a hospital stay as well as hospice care. It does not cover doctors’ fees. For most people who have worked and paid Medicare taxes, Plan A is free. Because Plan A covers expenses only up to certain limits, some people purchase supplemental insurance.

Plan B is optional. It requires a monthly fee (currently $115.40) and has an annual deductible ($162). It covers a portion of doctors visits, outpatient procedures, rehabilitation therapy, lab tests, x-rays, mental health and other services. If, for instance, you are covered by a spouse’s health insurance, you probably do not need Plan B, but you may want to sign up later when your spouse nears retirement.

Keep in mind that some doctors “opt out” and do not accept Medicare rates and payment.

Medicare Advantage (Plan C) is basically a private health insurance plan, albeit one approved and subsidized by Medicare. If you want to take this option, you first sign up for Plans A and B and then switch to Plan C. Under the law, Plan C offers many of the same services as Plans A and B, but it may offer additional services, such as vision and dental care. You may also have a wider range of choice in doctors. Because Medicare Advantage is private insurance, its rates are set by the insurers and may be higher than Medicare’s.

Plan D

Plan D is a prescription drug benefit – offered by private insurers and subsidized by Medicare – that helps pay for medications. You sign up for it after deciding whether you will go with Original Medicare or Medicare Advantage. It requires a monthly premium and co-pays on prescriptions (sometimes, a deductible as well). Each insurer designs its own plan, so you should compare benefits and costs before selecting a plan.