We're proud of our grandchildren as they grow in knowledge, such as when they first learn their ABCs. Unfortunately, when we qualify for Medicare, we discover that we have to learn our ABCs all over again, and it's a lot tougher this time around.
Even folks who've had Medicare for years don't know all the ins and outs. And those who will soon be getting Medicare can find the whole thing very confusing. Here are some of the basics.
Who gets Medicare? Medicare provides health insurance for 47 million seniors and people with disabilities. Almost half of the people with Medicare have limited incomes, and nearly as many have multiple health problems, like diabetes or high blood pressure.
About 80 percent of people with Medicare have outpatient and hospital coverage directly from the federal government (sometimes called "original Medicare"). The rest have coverage through Medicare Advantage-plans that are run by private insurers that contract with the federal government. Private plans must provide at least the same benefits as original Medicare, and most provide prescription drug coverage. People in original Medicare can also purchase a separate prescription drug plan from a private insurer.
Generally, if you or your spouse worked enough years to qualify for Social Security benefits, you will qualify for Medicare. Eligibility for seniors begins when you turn 65. If you have a disability, you become eligible for Medicare 24 months after you have been awarded Social Security disability.
What are the ABCs? Medicare's structure can be confusing. Original Medicare is divided into three parts: A, B, and D. Medicare Part A covers hospitalization. Medicare Part B covers outpatient care, like doctors' visits. Part D covers prescription drugs through private prescription drug plans. What about Part C? Part C is the official name for the Medicare Advantage program.
Understanding the parts of Medicare matters, especially when it comes to premiums and enrollment. Most people who receive Social Security retirement or disability benefits receive Part A automatically and have no premium. But, in order to receive outpatient (Part B) and prescription drug (Part D) coverage, you must sign up when you become eligible-or you'll have to pay a penalty. Both Parts B and D charge premiums that are usually deducted from enrollees' Social Security benefits (Part D premiums can also be paid directly to the plan). High-income beneficiaries (those with incomes above $85,000 for an individual or $170,000 for a couple) must pay higher premiums. Low-income people can qualify for Part D Extra Help or Medicaid that cover some or all of Medicare's out-of-pocket costs.
Some people who work past age 65 may not have to take Medicare when they turn 65. But they need to be careful: Once they leave their job, they need to sign up for Medicare right away to avoid any late enrollment penalties. People who work for smaller employers (those with fewer than 20 employees) need to sign up for Medicare at age 65 to avoid these penalties.
When you first sign up for Medicare, you can choose either original Medicare or a Medicare Advantage plan. Every fall, you have the option to keep your plan or choose a new plan for the following year. This year, the enrollment period is earlier than in previous years: It will begin on October 15 and run until December 7 (for plan choices that go into effect on January 1, 2012). Medicare provides a guaranteed set of benefits to everyone who qualifies. This includes hospitalization, outpatient visits, lab tests, and prescription drug coverage. Like any insurance policy, it has some areas where coverage is excellent and some areas where coverage is weaker.
Thanks to the Affordable Care Act (the new health care law), preventive benefits and prescription drug coverage are now significantly better. Most preventive services are available without copayments, and the coverage gap (the "doughnut hole") in Part D is closing. However, most people will still need some kind of supplemental coverage, either from a former employer, Medicaid, or from a private supplemental (or "Medigap") policy.
If you have questions about Medicare, there are a lot of free resources than can help you. Start by visiting the Medicare website at www.medicare.gov or by calling 800-MEDICARE. Every state has a State Health Insurance Assistance Program (SHIP) that provides free, personalized counseling to anyone with Medicare. You can ask for a referral to your local SHIP by calling 800-MEDICARE. If you're getting close to turning 65 or approaching the end of your 24-month waiting period, or even if you've had Medicare for many years, it's always a good idea to understand what your coverage options are.
Pollack is executive director of Families USA.