Okay let’s take a look at the basics of Medicare with Medicare 101. Now this is a massive undertaking but i’ll try to make it as simple as I can. There are five major parts the Medicare and you can see the first four here with parts a, b, c, and d. Part A and B or what makes up original medicare. Part a is your hospital insurance and it helps cover you for in patient care in hospital, skilled nursing care, hospice care, and home health care. Part B is your medical insurance and helps cover services from your doctors, healthcare providers, outpatient care, home health care, and it also provides durable medical equipment, and also some preventive services. So basically Part A pays for your room and board at the hospital and part b pays for your doctors and equipment they use. Part c is your Medicare Advantage this is not part of original medicare. This is run by Medicare approved private insurance companies this plan replaces your Medicare Parts A and B with a private insurance plan, and it must at least cover what Medicare Parts A and B cover. Some plans even offered prescription drug coverage along with other benefits. Medicare Part D or Medicare prescription drug coverage helps cover the cost of prescription drugs. It is also run by Medicare approved private insurance companies and you pay a premium to lower the cost of your prescription drugs. The last part of Medicare is medicare supplement or Medigap policies. Medicare supplement insurance works alongside your Medicare Parts A and B as opposed to replacing them like Medicare Advantage Part C does. Medicare supplements are designed to fill some to all the gaps and Medicare depending on which plan you choose. These plans are also offered by private insurance companies. All 10 plans are shown on the right… I will get into little more detail about medicare advantage and Medicare supplement plans later, but first let’s look how to enroll for parts A and B. Okay so if you’re not already on Social Security or you do not have railroad benefits then you will need to enroll for Medicare within a three-month window before you turn 65. This is considered your initial enrollment period. Now some people might still be working and might have to wait to see which coverage is better. Because Medicare might have better coverage than your health insurance plan at work. If your plan at work is better and cost less than you can delay enrolling penalty-free. So again the initial enrollment period is three months before you turn 65 you can roll up to three months after you turn 65 but you will have to pay a penalty for late enrollment. Now if you missed the deadline, and still want to sign up for Medicare Parts A and B, then you will need to wait until general enrollment period. This runs between January 1st and March 31st of each year. If you enroll during general enrollment period then your coverage will start July 1st of the same year and you might have to pay a higher Part A and Part B premium for late enrollment. Then there is the special enrollment period. This is for the people that are still working past 65 and three months and it gives them an eight-month period where they can sign up for parts a and b when they finally do retire. Lastly there is open enrollment period. This period is not for signing up for parts a and b of Medicare, but instead it is your opportunity to change your medicare advantage and medicare drug plan. It runs between October 15th and December 7th of each year. Your new medicare advantage or drug plan will then take effect January 1st. Medicare Supplements on the other hand can be changed any time of year. So again another difference between Medicare Advantage medicare supplements are Medicare Advantage plans can only be changed between October 15th and december 7th of each year and medicare supplements can be changed year-round. So i know that was a lot of information and it was just on enrolling into medicare… so feel free to pause the video here and take some notes about the different enrollment periods. It can definitely get confusing really fast. Okay, now let’s revisit Medicare Parts A and B and discuss what they cover. Well actually it’s a lot easier to talk about what they do not cover instead, so again part a pays for your room and board at the hospital and part b pays for your doctors and the equipment they use. Part A and B do not cover dental care, eye care, cosmetic surgery, acupuncture, hearing aids, and of course long-term care. now part A and B also have some deductibles and co-pays you need to know about. So part a has a 1288 dollar deductible per 60-day benefit period for hospitalization. It is important to notice the 60-day benefit period, so you could theoretically have to pay the deductible up to six times if you were extremely unlucky. You also have to pay 322 dollars a day for each day past 60 consecutive days of hospitalization and up to 90 consecutive days. And if you go past 90 straight days then you have 60 lifetime reserve days where you would actually pay 644 dollars a day. Now it is rare to spend more than one or two weeks at the hospital but Medicare made sure to cover all their bases. Up next is medicare part b or what covers your medical expenses. Now you need to pay a 166 dollar deductible before Medicare’s 80/20 co insurance kicks in. Let’s go straight to an example… let’s say you have a doctor bill for one thousand dollars. You will have to pay the first $166 deductible then the other $844 will get split up. With Medicare paying 80% percent of the bill and you paying 20%. So you pay $168.80… and the $166 deductible and they have to pay $675.20… Now let’s say the bill was ten thousand dollars. They pay $7867.20 and you pay 1966.80 plus the $166 deductible. So you can see that there is a limited risk with Medicare Part B. Medicare also does not pay for part b excess charges. Excess charges are when the doctor can charge you up to fifteen percent more than Medicare is willing to pay for a test visit or procedure. So basically that twenty percent copay can be as high as thirty five percent with some doctors. The good news is Medicare Part B covers one hundred percent of laboratory services. Now let’s look at what else medicare pays for: They cover the first 20 days in skilled nursing care, if you were hospitalized at least 3 days and needed care within 30 days of leaving the hospital. It will cost you $161 a day to stay in nursing facility days 21 through 100. After 100 days you are not covered and this is where some people look at getting long-term care policies. You do have to pay for your first three pints of blood blood. This Typically cost $140 a point and medicare covers one hundred percent after the first three pints. Hospice care is practically totally covered by Medicare except for some small five-dollar co-pays on drugs and the five-percent gap and respite care costs. And lastly, Medicare does not cover you outside the united states. So how much does it cost? Well if you or your spouse work for 10 years and paid into Medicare then you get part a free. If not you can buy in at $411 a month. Part B is $104.90 for people that were on social security in 2015 and is $121.80 for anyone that is new to Medicare or hase not collected social security yet. The cost for Part B increases if you make more than $85,000 dollars a year individually or $175,000 dollars a year finally jointly. I have a chart above if you want to see where you might fall. Okay let’s revisit medicare advantage and medicare supplements. You should not have both at the same time so you can either have a Part A, B, and D alongside a medicare supplement, or you can just have a Medicare Advantage plan and maybe a drug plan if it is not already included in the plan. I have said this before but it’s important to repeat. Medicare supplement insurance works alongside Medicare Parts A and B as opposed to replacing them like a Medicare Advantage does. Most people get part a free and have to pay for part b for both and medicare advantage and medicare supplement plan. I’m going to go over some simple advantages and disadvantages for each. Medicare supplement plans have predictable cost, they are standardized, so they do not change year to year, they do not have networks of doctors and hospitals, and they have different Medicare supplement plans to cover some to all the gaps and Medicare. On the negative side you do not get separate drug coverage free, they almost always have higher monthly premiums, and your supplement premium increases each year because of your age and also because of the experience of your risk pool. So if you are in an unhealthy area your premiums will increase faster than if you live in a healthy area. Medicare Advantage plans are lower cost with the most popular plans having zero dollar premium. Most include drug coverage, most also have some small benefits for hearing, dental, vision, and wellness with… the most popular benefit like these being free gym memberships. The negatives of medicare advantage’s are the networks where you need to see their doctors at their hospitals, the plans are also not standardized and change yearly, and finally advantage plants are much more expensive in the long run if you have a chronic condition. So let’s look at some of the costs. Let’s look at a man that has just turned 65 for the first time. We will look at the low cost medicare advantage plan compared to a medicare supplement plan G. Now with both your medicare advantage and medicare supplement you will need to pay your $121.81 part b premium. Medicare Advantage plans can cost between 0 and 375 dollars per month, but we will mainly focus on their most popular lower-cost plan. So for example we will say that this 65 year old man is thinking about a zero premium plan. So with Medicare Advantage there are $0 premiums in comparison to pay ninety dollars a month for medicare supplement plan G. We will also also say that his drug coverage is included in his medicare advantage. And because you need to go out and get your own drug plan on a medicare supplement we will say it will cost this man $35 more to use a medicare supplement for his drugs. So altogether he will be paying at most $125 less a month for a Medicare Advantage plan. I go into way more detail about medicare advantage and Medicare supplement plans and why it costs $125 a month more for medicare supplement in another one of my videos. It’s titled medicare supplement vs Medicare Advantage… make sure to check that one out! Okay the last part of the puzzle we need to cover is Part D or drug coverage. It is run by Medicare approved private insurance companies and you a premium to lower the cost of your prescription drug coverage. Now every plan has a list of covered drugs or formulary. So they put your drugs in two different tears and have different cost for each tier they put drugs into. Now these companies can change their formularies each and every year so it is important to always check to see if you are on the lowest-cost plan for the drugs you are currently taking. For example they can move the drugs you are currently taking from a tier that is twenty dollars to a tier that might be two hundred fifty dollars or anywhere in between. I’ll show you how to check your drug plan a little later it’s really quite simple. Now let’s talk about the most popular pastry and Medicare the doughnut. A doughnut is used to represent how most drug plans work on party d of medicare. So before you can even get any co-insurance from your drug company you need to pay a 360 dollar yearly deductible. After that you must pay a co-payment, I used twenty-five percent in this example. So you paid 25 percent of the drug costs and the prescription drug company pays 75 percent. Until you and the drug company have paid together a total of $3310 then you reach the donut hole or the coverage gap. In this gap you will be responsible for paying forty-five percent of brand-name drugs and fifty-eight percent of generic drugs. Now when you and your insurance company have paid a total of $4850 you move into catastrophic coverage. This is when the government steps in and helps out the insurance company. You are only responsible for five percent of drug costs from this point until the end of the year. Again this is a lot of information so if you need to pause the video and draw a picture of this doughnut all the deductibles all the co-pays make sure you take the time to do so… Now like I said you should check your drug plan each and every year to see if you’re formulary has changed. All you need to do is call Medicare at the number above or go to medicare.gov website and click on the find a health and drug plan button. Now you have graduated from Medicare 101 but in no way did I cover every specific situation or topic of medicare. So make sure to always read the Medicare and you guidebook they send you each and every year to see if there are any changes for that year, and as always remember if you have any questions make sure to call me at 920-960-4312 or shoot me an email at [email protected]… thanks again and have a wonderful day!!!