Medicare Explained by Experts

What is Medicare? Medicare is a federal health insurance program that provides coverage to 45.4 million people: 37.9 million people ages 65 and older and 7.5 million people with permanent disabilities who are under age 65. (Source: Read the 2012 Medicare Handbook for additional information.

Read our guide to planning for Medicare and Medigap.

  • Who is Covered?
  • People age 65 or older
  • People of all ages with certain disabilities
  • People of all ages with End- Stage Renal Disease (ESRD)

Medicare Administration
The Social Security Administration (SSA) and the Railroad Retirement Board (RRB) enroll eligible consumers in the Medicare program who have satisfied their 40 quarters of work and have become entitled for Medicare Part A and eligible for Medicare Part B and have their Medicare Part B premiums automatically deducted from their SSA or RRB checks. The Centers for Medicare and Medicaid Services (CMS) administers the program for the federal government. CMS creates and monitors detailed rules regarding how the Medicare program should operate so that the program meets the best interest of its consumers.

Medicare Made Clear: Show Me Guide Read in-depth details and see real-world scenarios to help choose the plan that is right for you. This guide shows the various ways you can get Medicare coverage with examples to help you figure out what types of plan(s) may be best for you.

Medicare Parts
Medicare consists of four parts: Part A, B, C and D. Parts A and B together are referred to as “Original Medicare.” All parts of Medicare have cost sharing or “gaps” such as deductibles, copayments or coinsurance.

Part A: Hospital Insurance
Part A is automatically available to qualified to consumers at no additional charge. For those who do not qualify, Part A may be purchased.
Helps cover inpatient hospital and skilled nursing home costs.

  • Hospice Care.
  • Limited home health benefits.

Part B: Medical Insurance
Part B is a voluntary program that requires an additional monthly premium.
Help cover doctor services, outpatient care and other medical services.

Part C: Medicare Advantage Plans
Advantage Plan (some times called part C) are offered by private insurance companies
Part C combines hospital and outpatient services into one package for consumers who are enrolled in both Part A and Part B and can also include prescription drug coverage, while other plans treat it as an optional add-on.

Examples of Advantage plans can be found on this page, which include: HMOs, PPOS and private fee-for-service plans.

Part D: Medicare Prescription Drug Plans
Part D is a voluntary program offered by private insurance companies that contract with the federal government, which provides prescription frudg coverage for an additional monthly premium.

What Doesn’t Medicare Cover?
Many consumers are unaware that Medicare does not cover all health care services and costs. Some examples of what Medicare doesn’t cover are: Care while traveling out of the U.S

  • Hearing aids and exams for fitting hearing aids
  • Routine dental care
  • Deductibles
  • Coinsurance
  • Copayments Routine physicals, with the exception of the one-time “Welcome to Medicare” physical exam within the first 12 months of enrolling in Part B

Who Qualifies for Medicare?
Generally, consumers are eligible for Medicare if:
• The consumer and their spouse have worked for at least 10-years in Medicare-covered employment
• The consumer is 65 years or older
• The consumer is under 65 with certain disabilities
• The consumer has end-stage renal disease (ESRD) (permanent kidney failure requiring dialysis or kidney transplant) Click here to learn how you can avoid paying premium for medicare insurance.

Coverage Options
With Medicare, consumers can choose different coverage options to suit their medical needs.
Employer-Sponsored Group Retiree Plans:

  • 32% of Medicare consumers have additional coverage through a Group Retiree Plan.

Original Medicare + Medicare Supplement:

  • 19% of Medicare consumers purchase a Medicare Supplement Plan to provide additional coverage. Many of these consumers also purchase a seperate Part D Plan. A Medicare Supplement Plan is private insurance that covers some “gaps” in Medicare Parts A and B and is not part of Medicare.

Employer Medicare Supplement:

  • 5 percent of recipients have through their employer

Medicare + Medicaid:

  • 16% of Medicare consumers receive their additional coverage through Medicaid due to their low-income status. Original Medicare Only: 10% of Medicare recipients elect to have Original Medicare only. They have no Additional medical coverage, but may choose to purchase a Part D Prescription Drug Plan.

Medicare Advantage (Part C):

  • 17% of Medicare consumers enroll in one of several types of Medicare Advantage Plans. Many of these plans have Part D Prescription Drug Coverage included in their benefits. Examples of these Plans include: Health Maintenance Organization (HMO)
  • Point-of-Service (POS) Plan
  • Preffered Provider Organization (PPO
  • Local and Regional)
  • Private Fee-for-Service Plan (PFFS)
  • Medicare Savings Account (MSA)

Medicare Options
Medicare options are offered to Medicare consumers through:

  • Original Medicare
  • Original Medicare + Part D
  • Original Medicare + Medicaid
  • Original Medicare + Medicare Supplement
  • Medicare Advantage (Part C) including:
  1. Health Maintenance Organization (HMO)
  2. Point-of-Service (POS) Plan Preferred Provider Organization (PPO – Local and Regional)
  3. Private Fee-for-Service (PFFS) Plan
  4. Special Needs Plan (SNP)
  5. Medicare Savings Account (MSA)

Medicare Plan Types
Consumers with medicare can choose how to obtain their health and prescription drug coverage.

Election Periods
Some Medicare health products, including Advantage and Part D (our guide on this is here), have restrictions on the time periods in which consumers can enroll in and leave a plan. Below are the four different election periods.
Initial Coverage Election Period (ICEP; also known as IEP for PDP)
The period during which consumers newly eligible for Medicare can make an initial election to enroll in a Advantage or Part D Plan. For Part C, the eligibility period to enroll in Parts A and B begins three months immediately before the consumers eligibility date, includes the month of eligibility, and ends three months after the eligibility date (a seven month period). For Medicare Part D Plans, the eligibility period to enroll in Medicare Parts A or B begins three months immediately before the consumers eligibility date, includes the month of eligibility, and ends three months after the eligibility dare (a seven month period).

Annual Election Period (AEP): November 31 Consumers can make a new plan choice.
During the annual Election period, any Medicare Consumer may elect to join a Medicare Advantage Plan or Part D Plan for the first time or a Medigap plan, or switch to a different plan. Any elections made during AEP become effective January 1.

Medicare Advantage Disenrollment Period (MADP): January 1 – February 14
This is a new disenrollment period – The Open Enrollment Period that currently runs from January 1 through March31 and allows members one opportunity to switch plans has been eliminated. In its place, a 45-day period is established from January 1 – February 14 when MA members can disenroll from their current plan, but only return to Original Medicare (they can also select a PDP for part D coverage).

Special Election Period (SEP): Available at any time during the year
Special circumstances that allow certain Medicare consumers to enroll/disenroll from a plan at any time when they would otherwise be ineligible [e.g. including but not limited to: Low income Subsidy (LIS) status, move out of state, move into a nursing home, plan non-renewables or terminations]. Being dually-eligible (people receiving benefits from both Medicare and medicaid) allows the consumer an SEP, as does having a chronic illness when enrolling into a Chronic Special Needs Plan (SNP). Please note that SEPs may carry restrictions, sach as what type of plan someone may choose or how often they may use the SEP.

Lock In February 15 – October 14
Consumers must remain with their last choice through the end of the year unless they qualify for SEP.
For more information, please check the Election Period Booklet. Also, the Medicare and You Handbook available at will provide additional information. Consumers may incur penalties if they don’t enroll for either Medicare Part B or Medicare Part D during their initial eligibility period. For more information on Medicare Part B penalties, see the Medicare and You Handbook. For more information on Medicare Part D penalties, see the Late Enrollment Penalties topic in the Medicare Part D Plans module.

Election Period Restrictions
Medicare Supplement Plans have no restrictions on when a consumer can purchase the coverage. Members enrolled in Medicare Advantage Plans will not be able to leave those plans and purchase Medicare Supplement Insurance unless they have election or enrollment periods they can use.
Note: Some plans have contracts with vendors that restrict specific agent activities.

Enrollment Basics
It is important to understand the structure of an Enrollment Request. Because agents must use CMS approved tools, the health plan must obtain CMS approval of their paper, Internet and telephonic processes ahead of each enrollment season. Most enrollment processes are similar but each agent must assure accuracy and confirm that the enrollment tool matches the product chosen by the consumer. For more on enrollment basics click here.

Disenrollment Basics
CMS sets the conditions and steps the health plan must take for required involuntary disenrollment and optional involuntary disenrollments. Click here for more on disenrollment.

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