Here’s some information to help you understand the terms used to describe your Medicare costs. (reposted from Medicare Made Clear)
Whether you get your Medicare benefits through Original Medicare or through a Medicare Advantage, you are likely to have some out-of-pocket costs. The key is to understand upfront what you will be charged for and how the amount you are charged is determined. With this information, you can start to estimate what you might pay out-of-pocket with different plans you might be considering during Medicare Open Enrollment.
Here is a brief explanation of the main ways that Medicare shares the cost of your care with you.
- Premium – This is a fixed amount you may have to pay, usually monthly, to participate in a Medicare Advantage or other private Medicare health plan. If you are enrolled in Medicare Part B, you also pay a premium to Medicare. Part A is premium free for most people. Some Medicare Advantage plans do not have a premium.
- Deductible – This is a fixed amount you must pay for your medical care before Medicare or other insurance pays. Deductibles apply during a calendar year, and the amount can vary among private Medicare plans of the same type. With Original Medicare, Part A and Part B each have a deductible. Some plans may not have a deductible.
- Copayment – Also known as a copay, this is a fixed amount you pay for a service or product at the time you get it. With a standalone Medicare prescription drug plan (Part D), for example, you might pay a $10 or $20 copayment each time you fill or refill a prescription.
- Coinsurance – This is what you pay when the total cost of a service or product you receive is split with your plan. It is a percentage. For example, Medicare Part B might pay 80% of the cost for a visit to your doctor, and you would pay 20%.
Both Original Medicare private Medicare plans use these cost-sharing methods. But each plan has its own terms and conditions, so it’s important to read the plan material carefully.
You’re not alone!
With the introduction of the new Health Insurance Marketplace coming almost at the same time with Medicare Open Enrollment, it’s no wonder so many people have questions. The good news is that we have time to get all your questions answered before open enrollment closes on December 7 for Medicare. Call me at 440-255-5700 or email me at firstname.lastname@example.org and we’ll talk.
If you’re turning 65 or going on Medicare for the first time, please attend Getting Started with Medicare.. This class is designed to make Medicare easy to understand for those new to Medicare or those who want a refresher on it.
In all, I will presenting Getting Started with Medicare at more than a dozen locations in the coming weeks. Here’s a link to all my upcoming classes: http://www.mutskoinsurance.com/seminars.
You’ll find classes conveniently located in Lake, Cuyahoga, Geauga, Summit and Lorain Counties.
There are some key dates you’ll want to mark on your calendar:
- October 1, 2013: Health Insurance Marketplace Open Enrollment period begins
- January 1, 2014: New Health coverage can start
- March 31, 2014: Open enrollment ends
Medicare recipients have a different set of Open Enrollment dates. These are
- October 1, 2013: Medicare Open Enrollment period begins
- December 7, 2013: Medicare Open Enrollment Period ends
- January 1, 2014: Medicare changes go into effect for 2014
It pays to enroll on time.
When you become eligible for Medicare, it is important for you to sign up for Part A, Part B and Part D during your Initial Enrollment Period or you may be subject to penalties.
Medicare Made Clear explains the penalties as follows:
Part A Enrollment Penalties
Most people are eligible for Medicare Part A, Part B and Part D at age 65. Coverage for Part A is usually available without having to pay a monthly premium as long as you or your spouse worked and paid taxes for ten years. If you aren’t eligible for premium-free Part A, then it’s especially important to sign up during your initial enrollment period to avoid a possible 10% penalty on top of your monthly premium. You would have to pay the higher premium for twice the number of years you were eligible for Part A, but didn’t sign up for it.
Part B Enrollment Penalties
Part B charges a monthly premium. The amount that you pay is based on your income and tax-filing status. You will need to sign up when you are first eligible to avoid an additional 10% of your Part B premium for every 12-month period you were eligible for Part B, but didn’t sign up for it. Usually, you will have to pay the monthly penalty for as long as you have Part B coverage. You can delay enrollment in Part B without penalty if you quality for a Special Enrollment Period (SEP).
Part D Enrollment Penalties
One way to avoid having to pay Part D penalties is to sign up for a Part D drug plan as soon as you become eligible. Or, you can delay enrolling in Medicare Part D without penalty, but only if you have had other prescription drug coverage at least as good as Medicare. This is known as credible coverage. If it’s been more than 63 days since you’ve had creditable coverage, then the penalty may apply. For each month you delay, you may have to pay an additional 1% of the average premium per month. You will pay that penalty for as long as you’re enrolled in a Medicare Part D plan.”
If you don’t sign up for Part A and or Part B (for which you must pay premiums) when you are first eligible, you can sign up between January 1–March 31 each year. Your coverage will begin July 1. You may have to pay a higher Part A and/or Part B premium for late enrollment.”
If you have questions about enrolling, give me a call at 440-255-5700 or email me at email@example.com and ask me about timely enrollment and how it can save you a lot of money at a later time.