We understand health insurance can be confusing, and if you're new to Medicare, there's a lot of new things to learn. Here's some basic information to help get you started.
What is Medicare, Original Medicare, and Medicare Advantage?
Medicare: The federal government has a health insurance program for people who are age 65 or older or under the age of 65 with certain disabilities. This program is called Medicare, which is made up of Parts A (which covers hospital care), Part B (which covers basic services like doctor visits), and Part D (which covers prescription drugs). The government collects taxes to pay for Part A coverage for people who are eligible, and those people have the option of purchasing the additional Part B and Part D coverage.
Original Medicare: If the federal government manages your benefits for you, that coverage is often called Original Medicare. It is "fee-for-service," which generally means you usually have to meet a deductible before coverage begins, and then you pay a fee for each service you receive until the end of the year. Your share of the cost for most covered services and supplies is usually called either "coinsurance," which is a percentage of the cost, or a "copayment," which is a fixed amount.
Medicare Advantage: You can choose to have your benefits managed in several different ways. One very popular alternative to Original Medicare is Medicare Advantage (MA), which are plans offered by companies that contract with the federal government to manage your benefits. Medicare Advantage plans include all of the benefits that come with Part A and Part B, and some also include Part D. The Medicare Advantage plans that include Part D are also called Medicare Advantage Prescription Drug plans (MA-PD). Sometimes Medicare Advantage plans are also called Part C plans.
Most Medicare Advantage plans also include extra benefits and services that Original Medicare doesn't offer, like fitness center memberships, worldwide emergency care, financial protection against unlimited medical expenses, health and wellness programs, nurse advice over the phone, and programs to measure clinical and customer service quality.
There are different types of Medicare Advantage plans, for example HMO (health maintenance organization), POS (point of service), PFFS (private fee for service), and SNP (special needs plans).
Medicare Advantage plans are different than Medicare "supplements" because Medicare Advantage plans replace your Medicare coverage, usually handling all of your claims on your behalf. With supplement plans you handle some claims directly with Medicare, and you work with your supplement plan for other claims.
If you do not choose to join a Medicare Advantage plan, you will stay in the Original Medicare plan.
This is a very simple description of Medicare, Original Medicare, and Medicare Advantage plans. For more detailed information, you may request a free copy of Your Medicare Benefits by visiting www.medicare.gov, or call 1-800-MEDICARE (1-800-633-4227), 24 hours a day, seven days a week (TTY/TDD: 1-877-486-2048 for the hearing impaired).
Part A, B, C, D? What does it all mean?
“Original Medicare” includes Part A and Part B:
Part A covers medially necessary hospital-related costs. It includes skilled nursing care. It does not include custodial care.
Part B covers a portion of non-hospital medical care. Doctor visits and other outpatient services are covered under Part B. There is a monthly fee for this program, which changes every year. Deductibles and copayments can be applied to Part B coverage.
Original Medicare expanded in 1997 with Part C, which allows Medicare beneficiaries to seek coverage outsourced through private insurance companies that qualify for the program. Private insurers, such as Health First Health Plans, are contracted every year and are highly regulated. Each year, private insurance companies must re-apply to participate in the Part C program through a bid process. Today, Part C plans are called “Medicare Advantage”, include everything Original Medicare covers with Part A and Part B, and often include extra benefits like fitness center memberships and wellness programs. Many Medicare Advantage plans also include Part D prescription drug coverage.
In 2006, the Medicare program began offering prescription drug coverage (Part D). Just like Part B, people can pay an additional monthly premium if they want this coverage, but the cost may change from year to year, and may cost extra for those who do not elect coverage when they first become eligible.
If you don't get your Part D prescription drug coverage as part of a Medicare Advantage plan, you can keep Original Medicare and get a stand-alone Prescription Drug Plan (PDP). You can not purchase a PDP plan along with a Medicare Advantage plan, but you can get a PDP together with a Medigap plan.
Supplemental insurance from a private carrier, also known as Medigap, is another option for getting coverage for things Original Medicare doesn't pay for (for example, Part A and B deductibles and coinsurance, or emergency care in foreign countries). Medigap plans are available through several standardized packages, such as A, F, and N. If you enroll in a Medicare Advantage plan, you can not get a Medigap plan.
The information here is a very simple description. For more information, you may request a free copy of Your Medicare Benefits by visiting www.medicare.gov, or call 1-800-MEDICARE (1-800-633-4227), 24 hours a day, seven days a week (TTY/TDD: 1-877-486-2048 for the hearing impaired.)
Why is it important to find a high-quality plan?
Choosing a health plan is not as easy as it once was. Of course, the costs, coverage, and out-of-pocket maximum are important, but just as important are the doctors and hospitals covered in the provider network and the plan’s quality ratings. So, before you enroll in a plan, make sure you’re not trading quality, service, and the doctors and hospitals you trust for premiums and copayments that seem too good to be true.
Review the plan’s quality ratings
The Centers for Medicare and Medicaid Services (CMS) has a five-star rating system as a tool to help Medicare beneficiaries see which health and drug plans have the highest quality and customer satisfaction. The ‘5-star’ ratings are based on performance in different categories like detecting and preventing illness, patient safety, and customer service. The more stars a plan has, the better their overall performance. The latest star ratings, released annually, were released this year in late October, just in time for most people to start thinking about their healthcare coverage for the upcoming year. If you would like to get more information and see ratings for any Medicare health and drug plans you may be considering, visit www.medicare.gov.
Also, see where your plan ranked in the National Committee for Quality Assurance (NCQA) Health Insurance Rankings–2011-12. NCQA is an independent, not-for-profit organization dedicated to assessing and reporting the quality of managed care plans to help consumers, employers and others make informed healthcare choices. NCQA’s Health Insurance Plan Rankings have been widely recognized since 2005 as a valuable measure of clinical performance and customer satisfaction for both commercial (private) and Medicare plans. For more information, visit www.ncqa.org.
Check the latest provider info
Most people only look at their provider directories to see which doctors participate with their plan. It’s a good idea to take it one step further and call their office to see if they still accept the plan—even if they’re listed in the provider directory, there’s a chance it may not be up-to-date and your doctor may not accept the plan anymore. That’s important information to know, because unless it’s an emergency, some plans may not cover your care if you see providers who aren’t part of the network. If you’re choosing a new health plan, it’s a good idea to check with your doctor to make sure he or she still accepts the plan you’re considering. Usually the provider information on health plans’ websites is more current than what’s listed in the paper directories.
Look at the hospital selection
Besides doctors, provider directories also include a list of hospitals, but if they are listed under the “Emergency Services” section, keep looking to see which hospitals are part of the health plan’s network for non-emergency care. All hospitals in Florida are required to see you for an emergency, regardless of your insurance, so just because the hospital you like is listed for emergency care, it doesn’t mean your plan will cover non-emergency care there. Most people rarely need emergency care—it’s much more likely they’ll need services like a knee replacement or cataract surgery. But if the hospital you trust is not in the provider network for non-emergency care, you may be forced to get your healthcare from a hospital you’re not comfortable with and don’t want to use. Or in some cases, the provider you select may not have hospital admitting privileges at the hospital you prefer. So, make sure the hospitals, surgery centers, and other facilities you trust are part of your plan’s network for those non-emergency situations. A good provider network will include a choice of several facilities conveniently located in your area. Unless you need highly specialized care, you shouldn’t have to drive to another county to see a participating provider.
Also, health plans with contracted provider networks have already verified their providers are properly licensed and qualified to perform the services they offer. Participation requirements vary among health plans, so check the provider directory to make sure the doctors are board certified in their specialty and the hospitals are accredited. Board-certified doctors have met educational requirements and passed rigorous testing in their field, and accredited hospitals meet high quality standards for things like patient rights, medication safety, infection control, and outcomes.
Sometimes if a health plan has a limited choice of doctors or other providers, it can be a warning sign that providers have a difficult time working with that health plan. It could mean important services aren’t usually covered, claims aren’t paid quickly, or authorizations are complicated or rarely approved. No one likes the high cost of healthcare these days—but your policy could be a waste of money if you can’t get the services you need from the doctors and hospitals you want.
Whether it’s for your house, your car, or your health, the purpose of insurance is to protect you from catastrophic financial losses. We don’t like to think about the day we may suffer a serious injury or illness, but the truth is it can happen when we least expect it. Be sure to review all coverage options on hospitalizations.
Helpful hints for choosing a Medicare Advantage plan
Medicare has many rules about when you can join or change plans, and what sales methods are acceptable. Most people with Medicare Advantage plans could only change their plan one time between October 15 and December 7. This year, the rules have changed even more. If you are unhappy with your plan, you may not be able to switch to another Medicare Advantage plan after January 1, except for certain special exceptions, such as moving to a different county or meeting criteria for low income. Your only option is to disenroll from your Medicare Advantage plan from January 1 through February 14, and return to Original Medicare. Anyone who disenrolls from a Medicare Advantage plan during this time can join a stand-alone Medicare Advantage Prescription Drug plan during the same period. Here are some tips to help you find a plan that’s ethical, honest, and dependable, and keeps your best interests at heart:
- Be careful not to sign anything you don’t understand. If you don’t understand the form, ask a trusted friend or family member for help. Also, ask to get a copy of anything you sign.
- Know your costs. Make sure you understand your monthly premium costs in addition to the cost-share throughout the year.
- If you need coverage for your drugs, make sure the plan you choose has drug (Part D) coverage.
- There’s no "switch period" any more. If you are unhappy with your plan the only other option you’ll have after January 1 will be to switch to Original Medicare. If your Medicare Advantage plan includes Part D prescription drug coverage, you can choose a stand-alone PDP plan to go with your Original Medicare coverage.
- Medicare Advantage plans are not allowed to charge you a fee to enroll. Plans may have a premium you have to pay each month, but never an enrollment fee.
- Agents or other representatives may not show up uninvited at your home — Medicare does not allow door-to-door sales, and agents may not come to your home unless you’ve asked them to.
- Sales agents may not call you to tell you about their plans, ask for your Medicare ID, bank account, or credit card numbers, or enroll you over the phone unless you asked them to contact you with information. If you want to enroll over the phone and know what plan you want, you can do it by calling the health plan or Medicare directly—but you must make the call.
- Always safeguard your Medicare number which is usually the same as your Social Security Number, as closely as you would your credit card or bank account numbers, or other personal information.
- When you join a plan, they are not allowed to ask you for payment over the phone, through a web site, or by e-mail. You may be able to enroll online, but if your plan has a premium, they must mail you a paper bill or a coupon book you can use to make your payments each month. They may also give you a form to fill out if you want to set up your bank account or credit card to automatically pay your premium each month.
- Be cautious if you cannot get current copies of all plan information before you enroll (Summary of Benefits, Provider Directory, and Formulary/drug list). Medicare requires companies to provide you with all of these documents before you enroll. Medicare also requires all plans to have this information readily available, and there are several ways you should be able to get it—attend a public sales meeting or visit the plan’s office, or call the plan and ask them to mail it to you. Plans are also required to have all of this information posted on their web site.
- You can verify a Medicare provider, representative, drug plan or health plan is legitimate by calling Health Integrity, toll-free at (877) 772-3379. Medicare has contracted with Health Integrity to help prevent and detect fraud, waste, and abuse.
For more Medicare information
- Visit the Medicare website at www.Medicare.gov.
- Call Medicare toll-free at 1-800-MEDICARE (1-800-633-4227). They are available 24 hours a day, 7 days a week.
- To report suspicious activity, call the Federal Trade Commission Theft Hotline toll-free at 1-877-438-4338.
- Call your local Social Security office, or call toll-free at 1-800-772-1213 (TTY 1-800-325-0778).
- Call the local SHINE (Serving the Health Information Needs of Elders) office at (321) 752-8080.
Y0089_MP3115 CMS Approved 10242012
Last updated: 10/1/2012