Helpful advice for the journey ahead…

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Brief synopsis of Medicare

Health insurance is hard enough to decipher, right? You have premiums that are due monthly or quarterly, a deductible, co-insurance once the deductible is met and a “maximum out of pocket” figure. These were things I had learned to track to ensure medications were not over-paid, policies didn’t lapse and everything continued to sail smoothly. Then I received a notice in the mail that my mom would be qualifying for Medicare in the next sixty days. Huh? I thought to myself. My mom is forty-eight years old. I’ve seen my fair share of AARP commercials and know you need to be at lease sixty-five to receive Medicare coverage. I threw the mail away assuming it was junk mail.  A month later, at the thirty day mark, I received a similar notice in the mail. This time I called our insurance broker and asked him what was going on.  The conversation lasted hours…literally. I still recommend discussing this topic with your insurance broker or a professional, but here is a quick breakdown of the Medicare world:

There are two ways to qualify for Medicare; the recipient can turn sixty-five years of age, or have qualified and received Social Security Disability Insurance (SSDI) for the past twenty-four months.  Once the individual meets one of these two milestones, Medicare will become the individual’s primary insurance.

Once one qualifies for Medicare, there are two parts; Part A covers hospital expenses while Part B covers other medical expenses.  Medicare Part A has a set deductible amount the patient must pay each time services are rendered at a hospital. Part B has a one-time set deductible amount. Once the deductible is met, a coinsurance of 20% of the billed amount will be paid by the individual.

This is where the AARP commercials come in. Along with all kinds of insurance, AARP and countless other companies offer supplemental insurance. Supplemental insurance can be an Individual Family Plan (IFP) or a group plan from your employer that has been carried over in order to supplement your Medicare plan. You may also purchase a supplemental plan from any number of insurance companies.  This supplemental plan will cover the hospital deductible in Medicare Part A and the 20% co-insurance in Part B.

Any individual who has qualified for Medicare has the option of purchasing a supplemental plan. A supplemental plan for individuals over sixty-five years of age can be quite affordable.  However, if the individual has qualified for Medicare based on SSDI, the supplemental insurance prices increase exponentially. Take a look at your IFP or group plan and see if it is more cost effective to keep this plan as your supplemental, as appose to purchasing a new supplemental plan.

The final option we will discuss today in the Medicare Part D prescription plan. Similar to the supplemental plans, Part D is purchased from and provided by independent companies contracted with Medicare.  Different companies approve or deny different prescriptions and pharmacy locations.  The database at www.medicare.gov/find-a-plan allows you to type in all of your medications, along with your preferred pharmacy choice. The end result is a list of companies that offer a plan to cover your medication and allow you to use your pharmacy of choice. These companies will require a monthly premium, have a deductible and coinsurance once the deductible is met. Chances are you will be better off with a Part D plan as appose to paying for your medication out of pocket. However, if you chose to carry over your IFP or group insurance plan as a supplemental, this plan may already cover your prescriptions and be far more cost effective.

Again, this is a brief overview of Medicare. I would highly recommend seeking advice from a professional when the time comes to move your insurance from your existing plan to Medicare.

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