Once a year it is open season on seniors. The signs are obvious: envelopes spilling out of your mailbox, huge ads popping up in your Facebook feed, and flyers left on your doorstep.
The hunters? Medicare insurance companies.
Medicare was created in 1965. What started out as a relatively simple federal entitlement program has since morphed into a tremendously complicated, and expensive, behemoth.
Medicare Program Options
There are 4 parts to the Medicare program: A, B, C and D. Part A covers hospital services, nursing facility services, and hospice services. Part A is an entitlement to all insured workers and is offered at no cost. Part B covers home health services, physician services, diabetes screening, and an initial preventative physical examination. Recipients who qualify for Part B must pay a monthly premium that may be increased for high earners.
Part C is the Medicare Advantage program. It was added in 1998 to allow beneficiaries an alternative to traditional Medicare coverage. Medicare Advantage programs are offered by private insurers and act like an HMO or a PPO. They may offer additional coverage not provided by traditional Medicare, such as dental, hearing and prescription drugs. People who use Medicare Advantage programs must pay a monthly premium.
Part D was added in 2006. It is a prescription drug plan, also offered through private insurers, and is paid through a monthly premium.
Most people become eligible for Medicare when they turn 65 years old and have worked at least 40 quarters (10 years) of covered employment. They have an initial enrollment period for a 7-month period that begins 3 months before the month they turn 65 and ends three months after the month they turn 65. This is called an IEP. There is an additional special enrollment period for people who continue to work after they turn 65 and are covered by their employer’s group health policy.
That is an extremely simple overview. Now for some information about a side gig: Medigap.
If you are signed up for Parts A and B, then you can purchase a Medicare supplemental insurance, called a Medigap policy, from a private insurance company for a monthly premium. This is intended to fill in the gaps in traditional Medicare coverage. Medigap comes in different plans that are standardized by the government, but pricing varies by insurance company. The different plans are A, B, C, D, E, F, G, K, L, M and N. Plan F is only available to people who had Medicare Part A before January 1, 2020. Plans H, I and J are not currently offered, but people enrolled in those plans before May 31, 2010 are grandfathered in.
You can use a Medicare broker to compare plans. The broker’s fees should be paid by the insurance company.
If you purchase a Medigap plan during your initial enrollment period, then you cannot be declined because of pre-existing conditions. However, if you later change your Medigap plan or insurance company, then you will probably be subject to underwriting.
Some Medigap policies cover a percentage of the cost for necessary emergency care in a foreign country.
There are two online resources that are helpful if you need general information. The first is the government website medicare.gov. The second is the nonprofit site medicareadvocacy.org, operated by the Center for Medicare Advocacy.
Hammerle Finley Can Help You Understand Your Medicare Options
Are you looking for assistance in choosing the right medicare option? Schedule a consultation with one of the experienced attorneys at Hammerle Finley to discuss your options.
Virginia Hammerle is in her fourth decade of practicing law. She is Board Certified in Civil Trial by the Texas Board of Legal Specialization and an Accredited Estate Planner. Contact her at email@example.com or visit www.hammerle.com. This column does not constitute legal advice.