Many of us are confused about Medicare. Can you give us the basics?
Medicare is a national health insurance program for people aged 65 and over and younger people with certain disabilities or chronic heath conditions. Original Medicare has been around since 1965 and has two parts.
Part A is your inpatient hospital coverage and Part B is outpatient medical coverage. These are the foundation of your coverage when Medicare is your primary insurance. You can then add Medicare supplemental coverage to fill in the gaps plus a Part D drug plan to help pay for your prescriptions.
Medicare insures over 50 million people in the U.S and has an enormous network of providers—more than 800,000 of healthcare providers nationwide.
What are the biggest misconceptions you see about Medicare?
First, some people think that when they turn 65, Medicare will be free. While it is true that you pay FICA taxes during your working years toward your future Medicare benefits, that only helps to pre-pay Part A. Anyone with 40 quarters (10 years) of work history qualifies for Medicare Part A at no cost when they enroll.
Parts B and D have monthly premiums which you will pay. Currently Part B costs $134/month for most new enrollees. A small percentage of people who have higher incomes will pay more based on their household income. Then, just like your current healthcare plan, you have cost-sharing as you use the coverage. You are responsible for deductibles on both Parts A and B as well as copays and coinsurance as you use your benefits.
The second big misconception we see has to do with the open enrollment periods. Beneficiaries have a 7- month initial enrollment period to enroll in Medicare itself. They then have a 6-month Medigap open enrollment period that begins with their Part B effective date. This is when people can enroll in any Medicare supplement they want without health questions or underwriting.
Many people are unaware that this may be the ONLY time they can enroll in a Medigap plan without underwriting. The reason they get confused is that Medicare also has an Annual Election Period in the fall when you can make changes to your Part D drug plan or Medicare Advantage plan. Beneficiaries sometimes don’t know that the Annual Election Period has nothing to do with Medigap, and they mistakenly believe that they can just wait until they are sick and then use an Annual Election Period to get a Medigap plan. They then find out that they must now answer health questions to get a Medigap plan and could be turned down based on their medical records.
It’s very important not to miss your 6-month one-time Medigap open enrollment period if you know you want Medigap coverage and you have a health condition that may make it harder to get a plan later on down the road.
What are dos and don’ts when it comes to Medicare?
DO start your research early. People who begin learning about their coverage and their options at least 6 months before their 65th birthday will find that their enrollment and supplemental decision-making is less stressful because they’ve not waited until the last minute.
DO check with your doctors about what coverage they accept. Most doctors accept Original Medicare so you can use any Medigap plan to see them. However, Part C Medicare Advantage plans have networks. These plans work very differently than Original Medicare and their network are quite small compared to Medicare’s own enormous network. You don’t want to join a Medicare Advantage plan and be locked in and then find out your doctor isn’t in the network.
DO use Medicare’s free Plan Finder Tool to research which Part D drug plans will give you the lowest out-of-pocket expenses. Enrolling in Part D is voluntary, but there are penalties for late enrollment. We also strongly recommend it so that you aren’t ever in a situation where you get prescribed an important and expensive medication and you have no coverage. You can only enroll in Part D during certain times of the year so you could end up waiting many months for the next opportunity to gain. There are inexpensive Part D plan choices in every state so there’s no reason to go uncovered.
DON’T miss your Initial Enrollment Period for Medicare unless you have other creditable coverage such as group insurance through an employer. There are significant penalties for late enrollment.
DON’T choose your coverage based on what a friend has. That person’s needs are likely differently than yours. It’s important to choose coverage based on your own health usage and needs. As you begin to learn about your choices, ask yourself: which coverage would I most want if I had a serious illness or chronic condition? That’s the right coverage for you.
DON’T enroll in your Medicare supplement directly with an insurance carrier unless you want to be stuck calling into a huge call center and sitting on hold every time you have a question. Enrolling through an insurance agent costs you nothing and will ensure that you have a person you know and trust to help you when hiccups occur, which are quite common. The insurance company pays the agent to provide policy support to you, and that agent will have a vested interest in keeping you happy.
What services does your company, Boomer Benefits, provide?
We help baby boomers navigate their entry into Medicare. We help them understand how their basic Medicare coverage works, and then we assist them in choosing an affordable and suitable supplement coverage and drug plan. As a Medicare insurance broker, we are appointed with over 30 carriers in 47 states, so we can provide an unbiased opinion on which supplemental coverage makes the most sense for them. This service is free, and they pay exactly the same premium for their coverage as they would if they enrolled direct with an insurance company. However, our back-end support is unparalleled.
We employ an entire Client Service Team to help our policyholders with questions or problems at absolutely no cost to them. They gain access to this team simply by enrolling in their coverage through us.
For example, our team here helps our clients with free claims support when Medicare denies a bill because their doctor coded something wrong or a hospital tries to collect a deductible that is already going to be paid by a Medigap plan. We help them write Medicare appeals and we track down billing problems at the doctor office level and resolve them.
Recently one of our clients who has had a liver transplant had a problem where her Part D company was refusing to fill her anti-rejection medication. This is an extremely expensive medication and without it she could quickly become seriously ill or die. She was in tears before she called us, but then she remembered our agent telling her about our service team. She phoned into us and my team was able to help her sort it out and get her medication in less an hour. That’s the value that we provide that you will never get from a big insurance company call center where everyone is a stranger and has no vested interest in helping you.
What are your favorite resources to learn more about Medicare and supplemental insurance?
The Medicare.gov website has a wealth of information and also offers the Plan Finder Tool that I mentioned earlier.
Once people enroll, we highly recommend they set up a My Medicare Account. This allows them to see their plan information and claims online.
People with low incomes can apply for help with Part D at the social security website. You can learn more about the Low-Income Subsidy here.
Another great organization that offers an overview of Medicare is the Kaiser Family Foundation.
If you are a reader, check out the 4 Simple Steps to Understanding Medicare post.
You can also attend one of our free New-to-Medicare webinars. We teach all the basics about enrollment, eligibility, and coverage under Medicare as well as inform them of the various supplemental options so that consumers are better equipped to make an informed choice. The webinar is free, and we don’t collect any phone numbers when people register. We want it to be an opportunity for them to learn hassle-free. People can learn more here: https://boomerbenefits.com/webinars.
Danielle Kunkle is a founding partner and senior executive at Boomer Benefits, a national agency specializing in Medicare-related insurance products since 2005. Serving thousands of Medigap policyholders in 47 states, Boomer Benefits helps baby boomers learn the ropes regarding Medicare.
A nationally-recognized expert in the Medicare-sector of the health insurance industry, Danielle is a Medicare Supplement Accredited Advisor and a member of the Forbes Finance Council. She is also a past president of the Fort Worth chapter of the National Association of Health Underwriters. She has spoken about Medicare to hundreds of groups over the last decade. She has also been frequently published in industry trade magazines about the financial and political future of Medicare and legislation surrounding it. You can follow her blog here.