Medigap Insurance
Medigap insurance is supplemental insurance privately purchased by individuals. These supplemental policies cover costs not paid for by Medicare that you would normally have to pay for out-of-pocket. Before signing up for Medigap, The American Association of Retired Persons (AARP) recommends considering other alternatives you may have available to you such as Medicare savings programs, Medicaid, retiree health insurance, and prescription drug assistance programs. AARP's Web site and its publications include a wealth of resources to help educate on these options as well as available Medigap plans.
Medicare Plan Details
The Medicare benefits application process is quite lengthy, and the best advice is to begin gathering information on the application process, benefits, and coverage specifics at least several months before your eligibility date. In this way, the information can be carefully studied, and questions answered to ensure your benefits are not delayed. The Centers for Medicare & Medicaid Services, or CMS, publishes a "Medicare & You" guide each year that explains the program. It includes information about any changes to the plan, what is covered and what is not, how to pick a plan that is right for your needs, and a lot of other useful topics. You can request a copy of the guide by calling (800) 633-4227 or by visiting www.medicare.gov. You can also use the Medicare Personal Plan Finder, which guides you through a simple set of questions ultimately displaying a list of plans for which you are eligible.
Medicare Part D Out-of-Pocket Expenses
Out-of-pocket health care costs are those that you pay yourself and for which you receive no reimbursement. For the Medicare prescription drug benefit, you will have to pay a monthly premium to join a plan on top of existing Medicare Part B, Medicare Advantage, or Medicare Cost plan premiums. Costs will vary depending on which plan you pick. For 2006, you will pay a monthly premium of around $32 a month for standard coverage. For that, you will receive a $250 deductible, which must be met before the benefit starts. As long as your premiums are paid on time and you have met your deductible, you will have a 25% co-pay up to $2,250. You will then have to pay 100% of your drug costs for the next $2,850. Once you have spent $3,600 in out-of-pocket expenses for the calendar year, the benefit becomes active and your co-pay is only 5% for the rest of the calendar year. People with limited income may qualify for extra help in the form of waived premiums, no deductibles, and low co-pays.
What is Medicare Part D
Beginning on January 1, 2006, Medicare began providing prescription drug coverage to all registered Medicare recipients. This coverage is known as Medicare Part D. The actual prescription drug coverage insurance is provided by private, Medicare-approved companies. You will need to choose a company from among those approved to provide this Medicare benefit based on what each plan covers, as well as how much the monthly premium will be. All plans provide coverage that at least matches the standard Medicare prescription drug plan. Plans with higher monthly premiums are likely, though not guaranteed, to provide more coverage of a wider range of drugs. If you already have prescription drug coverage through a current or former employer, if you are retired, keep in mind that your existing benefit may actually be better than those provided as a Medicare-approved plan. If you choose not to enroll in the Medicare drug plan when you are first eligible, you may be charged a penalty for joining later.
Joining Medicare Part D
Even though the Medicare Prescription Drug Plan is seen as way fixed-income seniors can benefit, it is necessary to think careful about the total out-of-pocket expenses. For some people the out-of-pocket expenses per calendar year can be as much as $3,600, and this is without the monthly premium. For those lucky enough to have drug coverage under employer-sponsored plans or have enough disposable income to cover their costs, be aware that if you decide you do not want to join at the time you become eligible, you may be charged a penalty if you want to join later on. For those who do stand to benefit, you can find out more about which plans are offered by visiting Medicare's Web site or by calling Medicare at 1-800-MEDICARE. You can also visit AARP's Web site and read up on all the pros and cons of your various options.
Comparing Coverage
Learning about Medicare benefits is one of the smartest decisions to can make. If you already have prescription drug coverage, it is still important for you to learn about the drug benefits available to you under the Medicare insurance plan. Working with the plan administrator of your current policy, you should be able to determine which plan provides better coverage for your particular amount for the premiums, deductibles, and co-pays you will be paying. A great resource to help you decide whether or not to join the Medicare prescription drug plan is AARP's Web site, which has a full suite of articles and tools to help you compare plans and pick the one that is right for you.
About Medicare
The Centers for Medicare & Medicaid Services, or CMS, is the federal agency that administers the Medicare program. The Medicare insurance program, which turned 40 in 2005, provides health insurance coverage to nearly 40 million Americans. Covered individuals include those age 65 and older, some people with disabilities under age 65, and people with end-stage renal disease. End-stage renal disease, also known as ESRD, is permanent kidney failure requiring dialysis or a kidney transplant. CMS was formerly known as the Health Care Financing Administration, or HCFA, but was renamed in 2001.
About My.Medicare.gov
To benefit those interested in learning about Medicare benefits, The Centers for Medicare & Medicaid Services is rolling out a Web site for registered Medicare recipients to gain access to information on benefits and request services more conveniently. This information is being phased in state-by-state and is expected to be accessible to individuals. To see if your state is online, you can visit http://my.medicare.gov. Complete a very straightforward online registration form to set up your user name and password, once you have completed the registration process, you can find information on benefits, premiums and coinsurance rates, as well as other topics. You can also do things such as notify Medicare of a change of address or order a Medicare replacement card as well.
Medicare Part A vs. Medicare Part B
Medicare Part A is basically the serious care side of Medicare coverage. It covers expenses associated with inpatient hospital stays, skilled nursing facilities, and some home health care. Medicare Part B covers approved outpatient physician services, outpatient hospital services, certain home health services, and durable medical supplies and equipment. Under both plans, Medicare reimburses providers based on its chart of allowed amounts--or the amount the federal government has deemed it considers fair and reasonable for a given service or item. The allowed amounts are derived based on national averages. You are responsible for the co-pay, which is the difference between the allowed amount and what Medicare actually ends up paying your provider, which is a percentage of the allowed amount.
2006 Medicare Premiums
There are three main costs associated with Medicare insurance, premiums, deductibles, and coinsurance rates. The premiums are based on how many Medicare-covered quarters of employment you or your spouse have logged. If either of you have logged at least 40 quarters of Medicare-covered employment, you do not pay a monthly premium for Medicare Part A (hospital) insurance. If you have logged 30-39 quarters, your 2006 monthly Part A premium is $216.00. For those with less than 30 quarters of Medicare-covered employment and who are not eligible for premium-free hospital insurance, the 2006 monthly premium is $393. The Medicare Part B 2006 monthly premium is $88.50.