Medicare Open Enrollment season, the time when you can make changes to your coverages for 2017, runs from Oct 15 – Dec 7 this year.
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National Medicare Education Week (NMEW), which begins Sept 15 and lasts through Sept 21, is devoted to helping you better understand Medicare.
According to a 2013 UnitedHealthcare survey:
•Most adults can’t identify what Medicare Parts A, B, C and D cover.
•70% of baby boomers describe their understanding of Medicare as “fair” or “poor.”
Dr. Efrem Castillo, chief medical officer at UnitedHealthcare Medicare & Retirement, discussed with FOXBusiness.com the basics of Medicare coverages to help you navigate your way through the Open Enrollment period beginning next month.
Boomer: If I currently have only Medicare Part A and Part B, what benefits am I covered for? Is there a maximum out-of-pocket expense I am liable for with having just A and B?
Castillo: Original Medicare, the health insurance program offered by the federal government sometimes called “traditional” Medicare, is made up of two parts, Part A and Part B. Part A helps pay for inpatient care, such as hospital stays or care at skilled nursing facilities. Part B helps pay for outpatient care, such as doctor visits, some preventive care, like flu shots, and emergency room services. Original Medicare (Parts A and B) generally covers 80 percent of all medical expenses. The individual is responsible for the other 20 percent. There is no annual limit on out-of-pocket costs for Parts A and B.
There are also government-approved Medicare plans that are provided through private insurance companies. These Medicare Advantage plans include all the coverage of Original Medicare plus a variety of additional benefits and features, such as access to a nurse helpline, hearing, dental and/or vision coverage, or a gym membership. All Medicare Advantage plans also have a maximum out-of-pocket limit, so you can better predict how much you may have to pay for health care services each year.
Boomer: What is the difference between a Medicare Advantage plan and a “supplemental” Plan?
Castillo: Medicare supplement insurance, or Medigap, is coverage that you can add to Original Medicare Parts A and B to help pay some out-of-pocket costs not paid by Original Medicare, like deductibles, co-pays and co-insurance. Different plans cover different costs. There is no out-of-pocket limit on these costs with Original Medicare.
Medicare Advantage (Part C) combines Parts A and B into one plan. You get all of the benefits of Parts A and B plus additional benefits and services such as access to a nurse helpline, hearing, dental and/or vision coverage, or a gym membership. Most Medicare Advantage plans also include prescription drug coverage.
Both Medicare supplement insurance plans and Medicare Advantage plans are offered by private insurance companies and approved by Medicare.
Boomer: For prescription drug coverage, does a Medicare Advantage plan offer the same benefits as a separate stand-alone prescription plan? Do all prescription drug coverages include the donut hole?
Castillo: Medicare Part D helps pay for the cost of prescription drugs. You can buy a separate policy just for drugs, called a prescription drug plan (PDP) or you can enroll in some types of Medicare Advantage plans that include drug coverage.
While all Medicare Part D plans must meet standards that the federal government has created, all plans are not the same. Plans vary by cost and by formulary, or the list of drugs covered. Some plans may limit your choice of pharmacies by geographic area, while other plans offer nationwide coverage. Some plans also offer mail order services, so you can have drugs mailed to your home.
In most prescription plans, there is a stage of cost-sharing called the “coverage gap” or “donut hole.” In this stage, you must pay most of the plan’s price for your medications. However, not everyone will hit this gap and there are ways to avoid it such as using lower cost generic drugs.
Boomer: What if my prescriptions are not on the list of approved drugs, known as the formulary?
Castillo: Many health plans, including standalone prescription drug plans and Medicare Advantage plans with prescription drug coverage, have tiered formularies. A tiered formulary divides drugs into groups, based primarily on cost. A plan’s formulary might have two, three, four, five or sometimes even six tiers. Each plan decides which drugs on its formulary go into which tiers. In general, the lowest-tier drugs are the lowest cost.
Sometimes you can’t find a plan that includes all of the drugs you take or your plan may change its formulary to exclude a drug. If your drugs aren’t on the formulary, talk to your doctor. There may be another drug on the formulary similar to your current drug or your doctor may be able to talk to your plan to make an exception.
The Plan Finder tool on Medicare.gov can be a helpful resource to help you compare your options. You can enter the drugs you take and the pharmacies you use to get customized results, presented in rank order by projected yearly costs for each plan.
Boomer: What resources are available to help me better understand Medicare coverages?
Castillo: This week is National Medicare Education Week – the perfect time to do some homework and learn about your options so that you can make an informed decision during Medicare open enrollment season this fall. In honor of National Medicare Education Week, UnitedHealthcare is hosting dozens of educational events around the country. To see the list of 2016 events and reserve a spot, visit NMEW.com.