Medicare is a federally administered system of health insurance available to people age 65 and older and people of any age with certain disabilities or permanent kidney failure.
Medicare Part A: Covers care at hospitals that accept Medicare and is available to beneficiaries for no monthly premium, provided they've worked and paid FICA taxes for at least 10 years. The Part A deductible — or out-of-pocket cost owed before an insurer will pay expenses — is $1,132 per benefit period, which starts when you enter the hospital. The benefit period resets when you've been out of the hospital 60 days.
Medicare Part B: Covers medical care with doctors and other health care professionals who accept Medicare; the monthly premium is deducted from beneficiaries' Social Security checks. Seniors new to Medicare generally pay $115.40, but most pay only $96.40 because there've been no cost-of-living increases for Social Security recipients for several years. The current Part B annual deductible is $162.
Part A & B are referred to as Original Medicare. Beneficiaries generally are responsible for 20 percent of their medical costs unless they choose to buy supplemental private insurance policies (Medigap) to cover deductibles, co-pays and coinsurance. There are 10 standardized supplemental plans, each with varying benefits. The most popular is Plan F that, depending on a beneficiary's age, gender and ZIP code, carries a $80 to $177 monthly premium with no deductibles. Depending on their health issues and the possibility of denied coverage, beneficiaries can change supplemental insurance policies whenever they want.
Medicare Part D: Covers prescription drugs through private insurance companies and costs $15.10 a month and up. Beneficiaries are responsible for up to a current annual deductible of $310 ($320 next year); 25 percent of their drug costs up to $2,830 and 100 percent of their costs between $2,830 and $4,550. Within that gap or “doughnut hole,” beneficiaries receive a 50 percent discount on brand name drugs and 7 percent discount on generic drugs (14 percent next year). If you don't sign up for Part D when you become eligible, you may pay a 12 percent annual penalty for life.
Medicare Advantage (also known as Medicare Part C and may include Part D): Beneficiaries who live in metropolitan areas often can lower their out-of-pocket costs by choosing, instead of supplemental insurance, a Medicare Advantage plan. These include HMOs (health maintenance organizations), PPOs (preferred provider organizations), and private fee-for-service plans facilitated by private health insurance companies and may include some additional benefits, such as vision or dental coverage, as well as prescription drug coverage. Thanks to health reform, Medicare Advantage plans beginning Dec. 8 will be rated — based on government oversight and consumer and provider satisfaction — a low of 1 star to a high of 5 stars, and beneficiaries may enroll in or switch to a 5-star plan at any time, even outside of Medicare's annual enrollment period.
Beneficiaries enrolled in Medicare Advantage plans can choose to withdraw from their annual plan and return to traditional Medicare, and pick up a Part D drug plan, during the annual disenrollment period, Jan. 1 through Feb. 14.
SOURCE: Oklahoma Insurance Department