Becoming eligible for Medicare can be daunting. But don’t worry, we’re here to help you understand Medicare in 15 minutes or less. We will cover topics including:
Medicare is a federal health insurance program in the United States that primarily provides coverage for individuals who are 65 years old or older, as well as certain individuals with disabilities or end-stage renal disease. It plays a crucial role in the American healthcare system by ensuring that seniors and eligible individuals have access to affordable healthcare services. Medicare provides coverage for hospital care (Part A), medical services and supplies (Part B), and prescription drugs (Part D). Medicare’s importance lies in its mission to provide comprehensive health coverage for a vulnerable population, promoting their well-being and supporting their healthcare needs.
Medicare Part D is the prescription drug coverage program offered by private insurance companies approved by Medicare. It helps beneficiaries pay for prescription medications and works alongside Original Medicare (Parts A and B) or Medicare Advantage (Part C) plans.
Medicare Basics, Explained
Medicare is a federal health insurance program in the United States that primarily provides coverage for individuals who are 65 years old or older, as well as certain individuals with disabilities or end-stage renal disease. It plays a crucial role in the American healthcare system by ensuring that seniors and eligible individuals have access to affordable healthcare services. Medicare provides coverage for hospital care (Part A), medical services and supplies (Part B), and prescription drugs (Part D). Medicare’s importance lies in its mission to provide comprehensive health coverage for a vulnerable population, promoting their well-being and supporting their healthcare needs.
What is Medicare?
Medicare is a federal health insurance program in the United States that provides coverage for eligible individuals, including those who are 65 years old or older, certain younger individuals with disabilities, and individuals with end-stage renal disease. Medicare was created to provide a federally funded health insurance program specifically for individuals aged 65 and older, regardless of their income or medical history.
Over the years, Medicare has played a crucial role in improving healthcare access and financial security for millions of people. It continues to evolve and adapt to the changing healthcare landscape, ensuring that eligible individuals have access to essential medical services and treatments. Medicare remains a cornerstone of the healthcare system, providing vital support to older adults and individuals with disabilities.
Medicare Eligibility
Most individuals 65 and over are eligible for Medicare
Some people under 65 are eligible too if they have certain disabilities or illnesses
Medicare eligibility is primarily based on age, with most people aged 65 and over being eligible for the program. When individuals turn 65, they become eligible for Medicare as long as they meet certain residency and citizenship requirements. This age requirement is rooted in the original intent of Medicare, which aimed to provide healthcare coverage for senior citizens who often face increased healthcare needs as they age.
For individuals under 65, Medicare eligibility is determined by specific disabilities or medical conditions. This includes individuals who have been receiving Social Security Disability Insurance (SSDI) benefits for at least 24 months. SSDI is a program that provides income support to individuals who are unable to work due to a disability. After receiving SSDI benefits for two years, individuals become eligible for Medicare, regardless of their age.
In addition to SSDI, individuals with certain medical conditions may also qualify for Medicare under the age of 65. These conditions include end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease. Individuals with ESRD, which is permanent kidney failure requiring dialysis or a kidney transplant, are eligible for Medicare regardless of their age. Similarly, individuals with ALS are automatically eligible for Medicare as soon as they start receiving disability benefits from Social Security.
It’s important to note that while individuals under 65 may qualify for Medicare based on disabilities or specific medical conditions, the process and requirements for enrollment may differ from those of individuals who become eligible at age 65. In such cases, individuals can work with the Social Security Administration to determine their eligibility and initiate the Medicare enrollment process.
Overall, Medicare provides essential healthcare coverage for millions of aged 65 and older. It also extends its benefits to individuals under 65 who meet specific disability or medical condition criteria, ensuring that they have access to necessary healthcare services and treatments.
What are the 4 types of Medicare?
Medicare is a federal health insurance program, primarily designed to assist individuals who are 65 years of age and older, but it also offers coverage for some individuals under 65 who have specific disabilities or medical conditions.
Here is a breakdown of the different parts of Medicare:
Medicare Part A: Also known as hospital insurance, Part A covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services. Most people do not have to pay a premium for Part A if they or their spouse have paid Medicare taxes while working.
Medicare Part B: Part B is medical insurance that covers outpatient services, including doctor visits, preventive care, lab tests, medical equipment, and some home health services. Part B requires the payment of a monthly premium, which is typically deducted from the individual’s Social Security benefits.
Medicare Part C: Commonly referred to as Medicare Advantage, Part C plans are offered by private insurance companies approved by Medicare. These plans provide the same coverage as Part A and Part B, and often include additional benefits like prescription drug coverage and dental or vision care. Medicare Advantage plans may have different costs and rules, and individuals who enroll in them still need to pay their Part B premium.
Medicare Part D: Part D is prescription drug coverage. This coverage is available through private insurance companies that are approved by Medicare. Part D helps individuals with the cost of prescription medications and is available as a standalone plan or as part of a Medicare Advantage plan.
Medicare Supplement Insurance (Medigap): Medigap plans are private insurance policies that help cover the “gaps” in coverage left by Original Medicare (Part A and Part B). These plans can help pay for out-of-pocket costs such as deductibles, coinsurance, and copayments. Medigap plans are standardized and offered by private insurance companies.
Original Medicare (Parts A & B)
Original Medicare is the basic form of Medicare coverage that includes Part A (hospital insurance) and Part B (medical insurance), providing essential healthcare services for eligible individuals aged 65 and older or those with certain disabilities.
What is Medicare Part A?
Medicare Part A, also called “hospital insurance”, covers things like inpatient hospital care, hospice, home healthcare, and more.
Most people don’t have to pay a monthly premium for Medicare Part A. This is because you’ve already paid into the system in the form of Medicare tax deductions on your paycheck.
But Part A doesn’t cover everything, and it isn’t totally free. In 2023, you must pay a deductible of around $1,600 before Medicare Part A kicks in and starts paying for your care. After that, you can expect Medicare Part A to cover about 80% of inpatient care during that benefit period.
What is Medicare Part B?
Medicare Part B, also called “medical insurance”, covers things like doctor’s visits, mental health services, some preventative care, and more.
Everyone pays a monthly premium for Part B. Part B usually costs around $164.90 for those new to Medicare as of 2023. You will also have to make other cost-sharing payments for care, like a deductible, copays, and coinsurance. Similarly, you can expect Part B to pay up to 80% of covered care.
People who are still working or covered by their spouse’s health plan may want to delay their Part B enrollment. However, if you delay your enrollment and do not have creditable coverage, you may have to pay a higher monthly premium as a penalty for not signing up when you’re first eligible.
What is not covered by Original Medicare?
Original Medicare does not cover:
• Most prescription drugs
• Long-term care
• Routine dental care or dentures
• Routine vision care
• Routine hearing care or hearing aids
• Routine foot care
• Other alternative treatments.
Original Medicare does not cover everything, but with May River Medicare Insurance’s help you may find extra coverage for the important things, like prescriptions and routine dental care.
What are the other parts of Medicare?
In addition to Original Medicare (Part A & Part B), there are other optional Medicare parts that may help expand your coverage. These parts are:
What is Medicare Part C (Medicare Advantage)?
Medicare Part C, also known as Medicare Advantage, is an alternative way for beneficiaries to receive their Medicare benefits through private insurance companies approved by Medicare. These plans offer all the coverage provided by Original Medicare (Part A and Part B) and often include additional benefits such as prescription drug coverage (Part D), vision, dental, and hearing services. Medicare Advantage plans may also have different cost structures and provider networks compared to Original Medicare, providing beneficiaries with more options and flexibility in their healthcare coverage.
What is Medicare Part D (Prescription Drug Coverage)?
Medicare Part D, also known as Prescription Drug Coverage, is a program that provides coverage for prescription medications for Medicare beneficiaries. It is offered through private insurance companies approved by Medicare. Medicare Part D plans have a formulary, which is a list of covered medications, and each plan can have its own formulary. Beneficiaries may have to pay monthly premiums, annual deductibles, copayments, and/or coinsurance for their prescription drugs, depending on the specific plan they choose. Enrollment in a Medicare Part D plan is optional but highly encouraged, as it helps individuals afford the cost of their medications and provides access to a wide range of prescription drugs.
What is Medicare Supplement (Medigap)?
Medicare Supplement, also known as Medigap, is a type of private health insurance that helps fill the coverage gaps in Original Medicare. Medigap plans are offered by private insurance companies and work alongside Medicare to provide additional benefits and financial protection. These plans help cover expenses such as deductibles, copayments, and coinsurance that are not fully covered by Original Medicare. Medigap plans are standardized and labeled with different letters (A, B, C, D, F, G, K, L, M, and N), each offering a different set of benefits. It’s important to note that Medigap plans do not include prescription drug coverage. Therefore, if you have a Medigap plan, you’ll need to enroll in a separate Medicare Part D plan for prescription drug coverage. Having a Medicare Supplement plan can provide peace of mind by reducing out-of-pocket costs and giving you more predictable healthcare expenses.
How do I enroll in Medicare?
Enrolling in Medicare involves several steps and options, depending on your specific situation. Here is an outline of the enrollment process, including information about automatic enrollment, initial enrollment periods, special enrollment periods, and late enrollment penalties:
1. Automatic Enrollment:
• If you are already receiving Social Security benefits or Railroad Retirement Board (RRB) benefits, you will be automatically enrolled in Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) when you turn 65.
• You will receive your Medicare card in the mail about three months before your 65th birthday.
1. Initial Enrollment Period (IEP):
• If you are not automatically enrolled, you have an Initial Enrollment Period to sign up for Medicare. The IEP lasts for 7 months and begins three months before the month you turn 65, includes your birthday month, and ends three months after your birthday month.
1. Enrolling in Part A and Part B:
• You can enroll in Medicare Part A and/or Part B in the following ways:
• Online: Visit the Social Security Administration (SSA) website and complete the application.
• Phone: Call the SSA at 1-800-772-1213 (TTY 1-800-325-0778) and apply over the phone.
• In-person: Visit your local SSA office and apply in person.
1. Special Enrollment Period (SEP):
• If you missed your Initial Enrollment Period, you may be eligible for a Special Enrollment Period.
• SEPs are triggered by certain life events, such as losing employer-based coverage, moving, or qualifying for Medicaid.
• You typically have 8 months to enroll in Medicare after the qualifying event.
1. Late Enrollment Penalties:
• If you don’t enroll in Medicare Part B when you are first eligible and you don’t have other creditable coverage (e.g., employer-based coverage), you may have to pay a late enrollment penalty.
• The penalty is added to your Part B premium and increases your monthly premium for as long as you have Part B.
• The penalty amount depends on how long you delayed enrollment, and it may increase over time.
It’s essential to understand the enrollment periods and options to ensure timely and proper enrollment in Medicare. If you have any questions or need assistance, you can contact the Social Security Administration or visit their website for more detailed information.
Automatic Enrollment
If you are already receiving Social Security benefits or Railroad Retirement Board (RRB) benefits, you will be automatically enrolled in Original Medicare when you turn 65. This includes Medicare Part A (Hospital Insurance) and Part B (Medical Insurance). However, you have the option to delay enrollment in Part B if you have other health insurance coverage, such as through an employer or union. In such cases, you can choose to decline Part B and enroll later without facing a late enrollment penalty. It’s essential to carefully consider your existing coverage and consult with your employer or benefits administrator to understand how your current insurance interacts with Medicare.
If you are not receiving Social Security benefits, you need to take steps to enroll in Original Medicare.
Here are the options:
• Enroll online: You can visit the official Social Security website and complete the Medicare application online. This process is straightforward and allows you to conveniently submit your application.
• Enroll by phone: You can call the Social Security Administration at 1-800-772-1213 (TTY 1-800-325-0778) and speak with a representative who can guide you through the enrollment process. They will assist you in completing the application over the phone.
• Enroll in person: If you prefer a face-to-face interaction, you can visit your local Social Security office and apply for Medicare in person. The staff at the office will provide you with the necessary forms and help you complete the application.
It’s important to note that if you delay enrolling in Part B without having other creditable coverage (such as employer-based insurance), you may face a late enrollment penalty. This penalty can result in a higher monthly premium for Part B, and it will apply for as long as you have Part B coverage.
It’s advisable to understand your options and the timing of your enrollment to ensure you have the appropriate coverage when you need it. If you have any questions or need assistance with the enrollment process, you can contact the Social Security Administration or visit their website for more information.
Medicare Enrollment Periods
Initial Enrollment Period (IEP): The Initial Enrollment Period is the first opportunity for individuals to enroll in Medicare. It occurs when you first become eligible for Medicare, typically around your 65th birthday. The IEP lasts for seven months and includes the three months before your 65th birthday, the month of your birthday, and the three months after.
During your IEP, you have several enrollment options:
• Original Medicare (Part A and Part B): You can enroll in Original Medicare, which includes hospital insurance (Part A) and medical insurance (Part B).
• Medicare Advantage (Part C): You can choose to enroll in a Medicare Advantage plan offered by private insurance companies. These plans provide Medicare Part A and Part B coverage, often with additional benefits such as prescription drug coverage.
• Prescription Drug Coverage (Part D): If you opt for Original Medicare, you can also enroll in a standalone Medicare Part D prescription drug plan to help cover the cost of medications.
Medicare Advantage Open Enrollment Period (MA OEP): The Medicare Advantage Open Enrollment Period is an annual period during which individuals who are already enrolled in a Medicare Advantage plan can make changes to their coverage. This period takes place from January 1st to March 31st each year. During this period, it’s recommended to review your current Medicare Advantage plan and compare it with other available options to ensure that you have the coverage that best meets your needs.
During the MA OEP, individuals who are enrolled in a Medicare Advantage plan can do the following:
• Switch to a different Medicare Advantage plan: You can switch from one Medicare Advantage plan to another, which may offer different benefits, costs, or provider networks.
• Disenroll from a Medicare Advantage plan and return to Original Medicare: If you decide that a Medicare Advantage plan is not the right fit for you, you can disenroll and return to Original Medicare. You will have the option to add standalone Medicare Part D prescription drug coverage if needed.
It’s important to note that the Medicare Advantage Open Enrollment Period is specifically for individuals who are already enrolled in a Medicare Advantage plan. It does not apply to individuals who are enrolled in Original Medicare without a Medicare Advantage plan.
Medicare Supplement Open Enrollment Period (Med Supp OEP): Medicare Supplement Open Enrollment Period (Med Supp OEP): The Medicare Supplement Open Enrollment Period is a six-month period that begins when you are both 65 years old and enrolled in Medicare Part B. During this time, you have the opportunity to purchase any Medicare Supplement (Medigap) policy available in your state, regardless of your health condition.
Here’s what you need to know about the Med Supp OEP:
• Guaranteed Issue Right: During the Med Supp OEP, insurance companies cannot deny you coverage or charge you higher premiums based on your health status. This is known as your guaranteed issue right.
• Freedom to Choose: You have the freedom to choose any Medicare Supplement plan available in your area. These plans are labeled with letters (such as Plan A, B, C, etc.) and each plan offers different benefits to supplement your Original Medicare coverage.
• No Medical Underwriting: Insurance companies cannot require you to undergo medical underwriting during the Med Supp OEP. This means they cannot ask you about your pre-existing conditions or deny you coverage based on your health.
It’s important to take advantage of the Med Supp OEP because once this period ends, insurance companies can consider your health status and medical history when deciding whether to offer you a Medicare Supplement policy and at what price. If you miss this enrollment period, you may still be able to apply for a Medicare Supplement plan, but you could face medical underwriting and potentially higher premiums.
Special Enrollment Period (SEP): The Special Enrollment Period (SEP) is a time outside of the initial enrollment period when you may be eligible to enroll in Medicare or make changes to your existing Medicare coverage. SEPs are granted for specific circumstances, allowing you to enroll or make changes outside of the standard enrollment periods.
Here are some common situations that may qualify you for a Special Enrollment Period:
• Delayed Retirement: If you delayed your retirement past the age of 65 and had healthcare coverage through your employer or union, you may be eligible for an SEP when you retire and lose your existing coverage.
• Loss of Employer Coverage: If you had employer-sponsored health insurance and it is no longer available to you (e.g., due to job loss or retirement), you may be eligible for an SEP to enroll in Medicare.
• Moving: If you move outside of your current Medicare plan’s service area, you may be eligible for an SEP to select a new plan that serves your new location.
• Dual Eligibility: If you are eligible for both Medicare and Medicaid, you may have additional opportunities to make changes to your coverage through an SEP.
• Qualifying Life Events: Certain life events, such as marriage, divorce, or the death of a spouse, may trigger an SEP.
It’s important to be aware of the specific requirements and timelines for each SEP. Generally, you will have a limited window of time to take advantage of the SEP, typically around 60 days from the qualifying event. During this time, you can enroll in or make changes to your Medicare coverage without facing penalties or restrictions.
Annual Election Period (AEP): The Annual Election Period (AEP), also known as the Open Enrollment Period, is a designated time each year when Medicare beneficiaries can make changes to their Medicare Advantage (Part C) and Medicare prescription drug (Part D) plans.
During the AEP, which runs from October 15th to December 7th, you have the following options:
Switch Medicare Advantage plans:
• You can change from one Medicare Advantage plan to another, or you can switch from Original Medicare to a Medicare Advantage plan.
• Enroll in a Medicare Advantage plan: If you are currently enrolled in Original Medicare, you can use the AEP to enroll in a Medicare Advantage plan that offers additional benefits.
• Join a Medicare prescription drug plan: If you have Original Medicare and want prescription drug coverage, you can enroll in a Medicare Part D prescription drug plan.
• Change your Medicare prescription drug plan: If you already have a Medicare Part D plan, you can switch to a different plan that better suits your needs.
It’s important to note that any changes made during the AEP will take effect on January 1st of the following year. This is a crucial period to review your current Medicare coverage, assess your healthcare needs, and make any necessary adjustments to ensure you have the most suitable coverage for the upcoming year.
History of Medicare
Medicare was signed into law on July 30, 1965, by President Lyndon B. Johnson as an amendment to the Social Security Act. It was created to provide health insurance coverage for Americans aged 65 and older, regardless of income or medical history. The program aimed to address the lack of affordable healthcare for seniors and to ensure they had access to essential medical services. Since its inception, Medicare has undergone several expansions and amendments, including the addition of coverage for people with disabilities and those with end-stage renal disease. Medicare has become a cornerstone of the American healthcare system, providing millions of beneficiaries with access to essential healthcare services and contributing to improved health outcomes for older adults and individuals with disabilities.
Medicare vs. Medicaid
Medicare and Medicaid are both government programs that provide healthcare coverage, but they serve different populations and have different eligibility requirements.
Medicare is a federal health insurance program primarily for people aged 65 and older, although it also covers some individuals with disabilities or specific medical conditions. It is generally available to all U.S. citizens and legal residents who have paid into the Medicare system through payroll taxes. Medicare is divided into different parts: Part A covers hospital insurance, Part B covers medical insurance, Part C offers Medicare Advantage plans, and Part D provides prescription drug coverage. Medicare is administered by the federal government.
Medicaid, on the other hand, is a joint federal and state program that provides health coverage to low-income individuals and families. Eligibility for Medicaid is based on income and other factors, and it varies from state to state. Medicaid is designed to assist individuals and families who have limited financial resources and may not be able to afford private health insurance. The program covers a wide range of medical services and is administered by individual states, following certain federal guidelines.
In summary, Medicare primarily serves older adults and people with disabilities, while Medicaid focuses on providing healthcare coverage to low-income individuals and families. The eligibility requirements, benefits, and administration of the two programs differ, but both play important roles in ensuring access to healthcare for different segments of the population.
Determining the right coverage for you
When it comes to healthcare coverage, understanding the options available to you is crucial. Medicare offers a range of coverage options, including hospital insurance (Part A), medical insurance (Part B), Medicare Advantage plans (Part C), and prescription drug coverage (Part D). Each part provides different benefits and serves specific needs. In the next section, we will delve deeper into the coverage provided by each Medicare part, helping you make informed decisions about your healthcare. Whether you’re looking for hospital stays, doctor visits, additional benefits, or prescription medications, we’ve got you covered. Keep reading to explore the comprehensive coverage options Medicare has to offer.
May River Medicare Insurance 222 Goethe Rd, Bluffton, SC 29910 (843) 227-6725
Summary:
The doctors and other providers covered by your Medicare insurance will vary depending on the type of plan you choose. To explore your available options, you can utilize the Medicare Physician Compare tool, which helps you find healthcare providers that accept Medicare. It is important to ensure that the doctor you select participates in Medicare and accepts your specific Medicare plan to prevent any unforeseen costs.
Original Medicare and Doctors
Finding a doctor that meets your needs is a solvable challenge, especially with the availability of different Medicare options. In the upcoming sections, we will discuss additional coverage and flexibility, including the freedom to choose any doctor who accepts Medicare.
How do I find a doctor who accepts Original Medicare?
To find a doctor who accepts Original Medicare, there are a few helpful resources available. You can start by using the Medicare Physician Compare tool, which allows you to search for healthcare providers in your area who accept Medicare. Additionally, you can contact your local Medicare office or reach out to your State Health Insurance Assistance Program (SHIP) for assistance in finding doctors who accept Original Medicare. These resources can help you locate doctors who are part of the Medicare network and are able to provide the services covered by your Original Medicare plan.
Medicare Advantage & Doctors
If you choose to enroll in you are getting your Medicare benefits through a private Medicare-approved insurance company and not through the government. This means that you may have to go to a doctor that is in-network for your Medicare Advantage plan.
Can I keep my current doctor with a Medicare Advantage plan?
Since your doctor must be in-network for your Medicare Advantage plan to receive full coverage, all you need to do is make sure you choose a Medicare Advantage plan where your doctor is in-network.
To make sure you’re getting the full coverage your Medicare Advantage plan has to offer, you may need to go to a doctor or a hospital within the provider network. But if you want to see a doctor who is out-of-network for your Medicare Advantage plan, you can still see them for care but you will probably have to pay more or 100% of the bill.
May River Medicare Insurance can help you where your preferred doctors and providers are in-network, so you don’t have to choose saving money over continuity and quality of care.
Medicare Supplement & Doctor
sIf you choose to enroll in an Insurance plan, in most cases you can go to any doctor that accepts Original Medicare. This is because you’re still getting your benefits through federally run Original Medicare.
Because you can go to any doctor or hospital that accepts Original Medicare, Medicare Supplement insurance is a favorite for frequent travelers, truckers, and people who have homes in different states.
Additionally, with Medicare Supplement Insurance plans you may get coverage for emergency care if you travel outside of the U.S.
What is Medicare Part D and how does it work?
Medicare Part D is the prescription drug coverage program offered by private insurance companies approved by Medicare. It helps beneficiaries pay for prescription medications and works alongside Original Medicare (Parts A and B) or Medicare Advantage (Part C) plans.
What is the difference of Original Medicare and Medicare Part D?
Original Medicare (Part A and Part B) provides coverage for hospital care, medical services, and supplies, but it does not include comprehensive prescription drug coverage. While Original Medicare is provided directly by government, Medicare Part D, on the other hand, is a standalone prescription drug coverage plan offered by private insurance companies approved by Medicare. It is designed to help individuals with their prescription drug costs, providing coverage for a wide range of medications not typically covered under Original Medicare. Unlike Original Medicare, which is provided directly by the government, Medicare Part D plans are offered by private insurers who contract with Medicare.
Plan Options for Prescription Drug Coverage
To get coverage for most prescriptions you may take routinely, you need to enroll in Medicare prescription drug coverage. You can get prescription drug coverage through one of two ways:
The first option is to enroll in a Medicare Advantage plan that includes prescription drug coverage as part of its benefits package. These plans, also known as Medicare Advantage Prescription Drug (MAPD) plans, offer comprehensive healthcare coverage, including both medical services and prescription drugs.
The second option is to enroll in a stand-alone Prescription Drug Plan (PDP) if you have Original Medicare or a Medicare Supplement plan without prescription drug coverage. These standalone plans specifically provide coverage for prescription medications and can be added to your existing Original Medicare coverage.
Both options offer different levels of coverage and have their own premiums, copayments, and formularies, so it’s important to compare and choose the option that best suits your specific medication needs.
Medicare Advantage Prescription Drug Plans (MAPD plans)
Medicare Advantage Prescription Drug (MAPD) plans are comprehensive health plans offered by private insurance companies that combine the benefits of Medicare Part A (hospital insurance), Part B (medical insurance), and Part D (prescription drug coverage) into a single plan. These plans provide all the coverage offered by Original Medicare, including hospital stays, doctor visits, and medical services, as well as coverage for prescription drugs.
Here are some key points about Medicare Advantage Prescription Drug (MAPD) plans:
One-Stop Coverage: MAPD plans provide all-in-one coverage, including medical services, hospitalization, and prescription drugs. This means you don’t need to enroll in separate Part D plans for prescription coverage.
Network-Based: MAPD plans typically have a network of healthcare providers, including doctors, hospitals, and pharmacies. You may need to use in-network providers to receive the full benefits of the plan, although some plans offer out-of-network coverage with higher cost-sharing.
Additional Benefits: In addition to medical and prescription drug coverage, MAPD plans often offer extra benefits not covered by Original Medicare, such as dental, vision, hearing, and wellness programs. These additional benefits can vary among plans.
Premiums and Cost-sharing: MAPD plans have their own premiums, deductibles, copayments, and coinsurance. The costs can vary depending on the plan you choose and the medications you take. It’s important to review the plan’s formulary to ensure your prescriptions are covered and to understand the associated costs.
Annual Enrollment Period: Like other Medicare plans, MAPD plans have an Annual Enrollment Period (AEP) when you can join, switch, or drop a plan. This period typically occurs from October 15 to December 7 each year.
Prescription Drug Formularies: MAPD plans have their own list of covered medications, known as a formulary. It’s crucial to review the formulary to ensure that your prescription drugs are included and to understand any restrictions or cost-sharing requirements.
Stand-alone Medicare Prescription Drug Plan (PDP)
A Stand-alone Medicare Prescription Drug Plan (PDP) is a type of Medicare plan that provides coverage specifically for prescription drugs. These plans work alongside Original Medicare (Part A and Part B) and are offered by private insurance companies approved by Medicare.
Here are some key points about Stand-alone Medicare Prescription Drug Plans (PDP):
Prescription Drug Coverage: PDPs provide coverage for prescription medications, helping you pay for the cost of your prescriptions. Each plan has its own list of covered medications, known as a formulary, which specifies the medications it covers and any restrictions or limitations.
Premiums and Cost-sharing: PDPs have their own premiums, deductibles, copayments, and coinsurance. The costs can vary among plans, so it’s important to compare the monthly premiums and cost-sharing requirements of different PDPs to find the one that best fits your needs and budget.
Network of Pharmacies: PDPs typically have a network of pharmacies where you can fill your prescriptions. It’s important to check if your preferred pharmacy is in the plan’s network to ensure convenient access to your medications. Some plans also offer mail-order pharmacy services for added convenience.
Enrollment Periods: The primary enrollment period for PDPs is the Annual Enrollment Period (AEP), which takes place from October 15 to December 7 each year. During this period, you can enroll in a PDP for the first time or switch to a different PDP if desired. There are also Special Enrollment Periods (SEPs) available for certain qualifying circumstances.
Additional Coverage Considerations: Stand-alone PDPs only provide coverage for prescription drugs and do not include medical services or hospitalization. If you need comprehensive healthcare coverage, you may consider enrolling in a Medicare Advantage Prescription Drug (MAPD) plan, which combines both medical and prescription drug coverage.
How to enroll in Prescription Drug Coverage
Enrolling in Prescription Drug Coverage, whether through a Medicare Advantage Prescription Drug (MAPD) plan or a Stand-alone Medicare Prescription Drug Plan (PDP), is an important step to ensure access to affordable prescription medications. Here are the different enrollment periods and the reasons why you might choose to sign up during these moments:
Initial Enrollment Period (IEP): This is the initial opportunity to enroll in a Prescription Drug Plan when you first become eligible for Medicare. The IEP for Part D begins three months before your 65th birthday month and extends for three months after. If you miss this enrollment period, you may have to wait until the next Annual Enrollment Period (AEP) to enroll.
Annual Enrollment Period (AEP): The AEP takes place from October 15 to December 7 each year. During this period, anyone with Medicare can enroll in, switch, or drop a Prescription Drug Plan. It’s an opportunity to review your current coverage, compare different plans, and choose one that best suits your medication needs and budget.
Special Enrollment Periods (SEPs): SEPs allow you to enroll in or make changes to your Prescription Drug Plan outside of the regular enrollment periods under certain qualifying circumstances. For example, if you move out of your plan’s service area, lose your current prescription drug coverage, or qualify for Extra Help (Low-Income Subsidy), you may be eligible for an SEP.
Choosing the right enrollment period depends on your individual circumstances. Here’s why you might choose to sign up during these moments:
Initial Enrollment: It’s important to enroll in a Prescription Drug Plan during your Initial Enrollment Period to avoid late enrollment penalties. By signing up when you’re first eligible, you can ensure continuous access to prescription drug coverage.
Annual Enrollment: The AEP is a valuable opportunity to review your current plan, assess your medication needs, and compare different plans to find the most suitable coverage. If you’re already enrolled in a Prescription Drug Plan, it’s wise to review your plan annually during the AEP to ensure it still meets your needs.
Special Enrollment: If you experience a qualifying life event, such as losing creditable prescription drug coverage or moving out of your plan’s service area, you may be eligible for an SEP. Taking advantage of an SEP allows you to make necessary changes to your coverage outside of the regular enrollment periods.
When you turn 65
When you turn 65 and become eligible for Medicare, you have the option to sign up for Medicare Part D prescription drug coverage right away. It’s important to note that while Part D coverage is optional, if you don’t sign up when you’re first eligible, you may have to pay a penalty to get covered later on.
Medicare Part D provides coverage for prescription drugs, helping you afford the medications you need. It is offered through private insurance companies that are approved by Medicare. Part D plans vary in terms of the specific medications they cover and the costs associated with the coverage.
During your Initial Enrollment Period (IEP), which begins three months before your 65th birthday month and extends for three months after, you have the opportunity to enroll in a Part D plan without incurring any penalties. This is the ideal time to sign up for prescription drug coverage to ensure you have access to the medications you need.
If you choose not to enroll during your Initial Enrollment Period, but later decide to get Part D coverage, you may have to pay a late enrollment penalty. This penalty is added to your monthly premium and can be permanent. The penalty amount depends on how long you went without creditable prescription drug coverage.
To avoid the penalty, it’s recommended to enroll in a Medicare Part D plan as soon as you become eligible, even if you currently do not take any prescription medications. It provides financial protection and peace of mind in case your medication needs change in the future.
To enroll in Medicare Part D, you can contact Medicare directly at 1-800-MEDICARE, or reach out to a licensed insurance agent who can assist you with the enrollment process. They can help you compare different Part D plans and choose the one that best fits your prescription drug needs and budget.
Remember, signing up for Medicare Part D when you’re first eligible is important to avoid late enrollment penalties and ensure you have coverage for your prescription medications.
Annual moments to choose a prescription drug coverage plan
There are annual moments when you have the opportunity to choose or change your prescription drug coverage plan. These include the Annual Enrollment Period (AEP) and the Medicare Advantage Open Enrollment Period (MA OEP).
Annual Enrollment Period: The AEP occurs from October 15th to December 7th each year. During this period, you can make changes to your Medicare coverage, including enrolling in or switching Part D prescription drug plans. It’s a crucial time to review your current medication needs, compare different Part D plans, and select the one that offers the best coverage and cost for your specific medications. This is also an opportunity to switch from a Medicare Advantage plan to Original Medicare with a standalone Prescription Drug Plan, or vice versa.
Medicare Advantage Open Enrollment Period: The MA OEP takes place from January 1st to March 31st each year. It allows individuals who are enrolled in a Medicare Advantage plan to make changes to their coverage. If you’re already enrolled in a Medicare Advantage plan that includes prescription drug coverage (MAPD), you can switch to a different MAPD plan or drop your Medicare Advantage plan and return to Original Medicare with a standalone Prescription Drug Plan. It’s important to review your current plan’s formulary, network of providers, and overall benefits to determine if any changes are needed during this period.
Both the AEP and the MA OEP provide valuable opportunities to assess your prescription drug coverage needs and make changes if necessary. It’s important to take advantage of these annual enrollment periods to ensure that your prescription medications are covered at the most affordable costs and that your plan aligns with your healthcare needs. Remember to review plan details, consider changes in your medication regimen or healthcare providers, and consult with resources such as the Medicare website or licensed insurance agents to make informed decisions during these enrollment periods.
Outside of these dedicated times, there are special moments based on circumstance
Outside of the designated enrollment periods, there are Special Enrollment Periods (SEPs) that allow individuals to make changes to their prescription drug coverage based on specific circumstances. SEPs provide flexibility for those who experience certain life events or qualify for special considerations.Qualifying life events that may trigger an SEP include:
Moving: If you move to a new address that is outside of your current plan’s service area, you may be eligible for an SEP to choose a new prescription drug plan.
Losing creditable prescription drug coverage: If you lose your existing coverage that is considered creditable, such as employer-sponsored coverage, you can enroll in a Medicare Part D plan without facing a penalty.
Gaining or losing Medicaid eligibility: If you become eligible for Medicaid or lose your Medicaid coverage, you may qualify for an SEP to enroll in or change your prescription drug plan.
Getting married
Having a baby
Adopting a child
If your household income is below a certain amount, it may qualify you for SEP.
Extra Help: Individuals who qualify for the Extra Help program, which assists with prescription drug costs, may be eligible for an SEP to select a Part D plan that best suits their needs.
It’s important to note that the duration and availability of SEPs can vary depending on the specific circumstances. To take advantage of an SEP, you should contact Medicare or consult with a licensed insurance agent to understand the options available to you and ensure timely enrollment.During an SEP, you have the opportunity to select a prescription drug plan that aligns with your current situation and prescription needs. It allows you to make changes outside of the regular enrollment periods, providing flexibility and ensuring you have appropriate coverage when facing qualifying life events or special circumstances.
How can I make sure my medications are covered?
Review prescriptions
To ensure that your medications are covered under a Medicare prescription drug plan, it’s important to review your prescriptions and create a list of the medications you currently take or anticipate needing in the future. This will help you assess whether a specific plan meets your medication needs and provides adequate coverage.
Start by compiling a comprehensive list of all your prescription medications, including the names, dosages, and frequency of use. Consider both brand-name and generic medications. You can obtain this information from your current pharmacy or by reviewing your prescription bottles.
Once you have your list, compare it with the formulary (list of covered prescription drugs) provided by the Medicare prescription drug plans you are considering. Each plan maintains its own formulary, which specifies the medications covered and the associated cost-sharing details.
Pay attention to the specific prescription drug tiers within the formulary. Medications are typically categorized into different tiers, each with a different level of cost-sharing. Ensure that the medications you need are listed in a tier that offers affordable copayments or coinsurance.
It’s also important to check if any restrictions or limitations apply to certain medications. Some prescription drugs may require prior authorization, step therapy, or quantity limits. Reviewing these details will give you a better understanding of the plan’s coverage for your specific prescriptions.
To simplify the process, you can use online tools and resources provided by Medicare or trusted third-party websites. These tools allow you to enter your prescription medications and compare them across different prescription drug plans to find the one that offers the most comprehensive coverage for your specific needs.
By carefully reviewing your prescriptions and comparing them to the formularies of different plans, you can ensure that your medications are covered under a Medicare prescription drug plan that provides the most suitable coverage and helps you manage your medication costs effectively.
Compare with plan options
Every Medicare Advantage Prescription Drug plan and stand-alone Medicare Part D Prescription Drug plan has a list of the prescription drugs they cover (called formularies). Different plans have different formularies, so covered prescription drugs may vary from plan to plan.
Check in annually to make sure coverage maintains
It’s important to make sure that the coverage you choose covers the medications you need. And since plan formularies can change every year, it’s important to check that your prescriptions stay covered under the plan you choose.
Adjust plan if needed
May River Medicare Insurance can help you find an MAPD plan or a stand-alone Medicare Part D prescription drug plan that covers the medications you need. And if your plan’s coverage ever changes, May River Medicare Insurance can help you make the switch to a plan that meets your needs.
Summary:
Wondering about your options? This article discusses the options available to eligible beneficiaries under Medicare. It is an overview of Original Medicare, Medicare Advantage plans, Stand-alone Medicare Part D Prescription Drug plans and Medicare Supplement (Medigap) Insurance plans. It emphasizes the importance of understanding these options to make informed decisions about plan coverage.
Medicare Plans
Original Medicare
Original Medicare is a healthcare option provided by the federal government for people who are eligible. It is made of two main parts: and Medicare Part B. Medicare Part A primarily covers hospital services, such as inpatient hospital stays, skilled nursing facility care, and hospice care. covers medical services like doctor visits, outpatient care, preventive services, and durable medical equipment. While is the basic coverage option, it can be supplemented with a stand-alone Medicare Part D Prescription Drug plan or a Medicare Supplement (Medigap) Insurance plan. More information about Original Medicare, including its benefits and limitations, will be explored further in this article.
Medicare Advantage Plans
Medicare Advantage, also known as Medicare Part C, is an all-in-one alternative way to receive your Original Medicare coverage. It combines the coverage of Medicare Part A and Part B, provided by the government, with possible additional benefits offered by private, Medicare-approved insurance companies. These plans often include prescription drug coverage (Medicare Part D) as well as may include extra benefits such as dental, vision, hearing, and wellness programs. plans are like a bundled package, bringing together multiple benefits into a single plan. They are sold by private, Medicare-approved insurance companies, allowing beneficiaries to receive their Medicare benefits through these companies. This option is somewhat the opposite of Medicare Supplement (Medigap) Insurance plans, which only supplements with Original Medicare.
Stand-alone Medicare Part D Prescription Drug Plans (Part D Coverage)
A stand-alone Medicare Part D Prescription Drug plan is a prescription drug coverage option that can be used with Original Medicare and, in some cases, Medicare Advantage plans. It is offered by private insurance companies approved by Medicare. Beneficiaries should consider their prescription drug needs when choosing a plan and review each plan’s formulary to ensure their required medications are covered. are lists of covered medications covered by a plan, so it’s important to select a plan that includes the specific prescription drugs used by the individual.
Medicare Supplement (Medigap)
Medicare Supplement, also known as Medigap, is a type of insurance policy that is designed to supplement Original Medicare. It helps cover some of the out-of-pocket costs, such as deductibles, copayments, and coinsurance, that Medicare does not fully pay. It’s important to note that Insurance plans cannot be used in conjunction with Medicare Advantage (MA) plans. There are different Medigap plans available, labeled by letters (such as Plan A, Plan B, etc.), and May River Medicare Insurance can assist in to find the best fit for individual needs. Medicare Supplement and Medigap are two terms used interchangeably to refer to the same type of coverage.
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The annual Medicare open enrollment period runs from October 15 th to December 7 th each year (Figure 1). During this time, people with Medicare can review features of Medicare plans offered in their area and make changes to their Medicare coverage, which go into effect on January 1 st of the following year. These changes include switching from traditional Medicare to a Medicare Advantage plan (or vice versa), switching between Medicare Advantage plans, and electing or switching between Medicare Part D prescription drug plans.
People in traditional Medicare can use the Medicare open enrollment period to enroll in a Medicare Part D prescription drug plan or switch between Part D plans. Traditional Medicare beneficiaries who did not sign up for a Part D plan during their initial enrollment period can enroll in a Part D plan during the annual open enrollment period, though they may be subject to a late enrollment penalty if they did not have comparable prescription drug coverage from another plan before signing up for Part D. Traditional Medicare beneficiaries with Medicare Parts A and B can also use this time to switch from traditional Medicare into a Medicare Advantage plan, with or without Part D coverage.
People who are enrolled in a Medicare Advantage plan can use the Medicare open enrollment period to choose a different Medicare Advantage plan or switch to traditional Medicare. Medicare Advantage enrollees who switch to traditional Medicare can enroll in a Part D plan if they want outpatient prescription drug coverage, which is not covered under Medicare Parts A and B. They may also consider purchasing a Medicare supplemental insurance policy (Medigap) if the option is available to them (see question 4 for details about Medigap and potential limits on enrollment).
Medicare beneficiaries are encouraged to review their current source of Medicare coverage during the annual open enrollment period and compare other options that are available where they live. Because an individual’s medical needs can change over the course of the year, and from one year to the next, this may influence their priorities when choosing how they want to get their Medicare benefits. Medicare Advantage and Medicare prescription drug plans typically change from one year to the next and may vary in many ways that could have implications for a person’s access to providers and costs. Despite this, a KFF analysis of a nationally representative survey of people with Medicare found that only one-third (32%) compared their Medicare coverage options during a recent open enrollment period
Some Medicare beneficiaries can make certain changes to their coverage at other times of the year. For example, beneficiaries who experience disruptions to existing coverage (such as a cross-county move or a loss of employer- or union-sponsored coverage) or changes in eligibility for Medicaid or other programs, may qualify for a Special Enrollment Period at any time of year. People who are enrolled in both Medicare and Medicaid (i.e., dual-eligible individuals) or who qualify for the Medicare Part D Extra Help program, can change their Medicare Advantage or Medicare Part D coverage once per quarter. People living in nursing homes and certain other facilities may change their Medicare Advantage or Medicare Part D coverage once per month.
Medicare Advantage enrollees who wish to change plans or switch to traditional Medicare may do so between January 1 st through March 31 st each year, during the Medicare Advantage Open Enrollment Period . (This is in addition to the open enrollment period that runs from October 15 th to December 7 th.) Additionally, those who have a Medicare Advantage or Medicare Part D plan with a 5-star quality rating available in their area may switch into a 5-star plan between December 8 th and November 30 th of the following year.
The annual open enrollment period and other opportunities to switch coverage are distinct from the initial enrollment period for people who are newly enrolling in Medicare, which begins three months before a person’s 65 th birthday and ends three months after it. For more information on initial enrollment.
Many Medicare beneficiaries have some form of additional coverage, such as a Medicare Supplemental Insurance policy ( Medigap) or coverage offered by an employer or a union, that helps with Medicare’s cost-sharing requirements. Enrollment in these plans and programs is not tied to the open enrollment period, though beneficiaries may wish to take them into account when considering their options for Medicare coverage.
Medigap. People in traditional Medicare with both Part A and Part B can apply for a Medigap policy at any time of the year. Medigap policies are designed to help beneficiaries in traditional Medicare with Medicare’s deductibles and cost-sharing requirements and have standard benefits to allow for apples-to-apples comparisons across insurers. Traditional Medicare beneficiaries with a Medigap plan that covers most deductible and cost-sharing requirements may have lower out-of-pocket spending for Medicare-covered services than people with other coverage, including a Medicare Advantage plan. Medigap policies are designed to wrap around traditional Medicare, and do not work with Medicare Advantage. People enrolled in Medicare Advantage do not need (and can’t buy) a Medigap policy.
While Medigap insurers are required to issue policies to people age 65 or over, without regard to health status or diagnosed medical conditions when they first enroll in Medicare, those with pre-existing conditions may be denied a Medigap policy or face higher premiums in most states if they apply for Medigap coverage after their first six months of enrollment in Part B. People who disenroll from Medicare Advantage within 12 months of first enrolling in Medicare Advantage have a right to purchase a Medigap policy without regard to medical history, but after 12 months, they are not guaranteed Medigap coverage and may be denied a policy due to a pre-existing condition or face higher Medigap premiums if they are offered a policy.
Medigap guaranteed issue rights are different for people under age 65 who qualify for Medicare due to long-term disability. Federal law does not require Medigap insurers to sell a policy to people with Medicare under age 65, although several states do require insurers to offer at least one kind of Medigap policy to people under 65. Premiums for Medigap policies sold to people under age 65 may be higher than policies sold to those age 65 or older. People under age 65 with disabilities who are already enrolled in Medicare will qualify for the 6-month Medigap open enrollment period when they turn 65 and become age eligible for Medicare. At this point, they can buy any Medigap policy they want without facing higher premiums or denials of coverage based on their existing medical conditions.
Employer-sponsored coverage. While employer-sponsored retiree health benefits are on the decline, more than 15 million people with Medicare have retiree health coverage (distinct from people with Medicare Part A only who continue to work and have health insurance through their current employer or a spouse’s current employer). Retiree health benefits may be designed to supplement either traditional Medicare or Medicare Advantage. Some employers that offer benefits to retirees on Medicare offer retiree health benefits exclusively through a Medicare Advantage plan. Beneficiaries with retiree health coverage offered exclusively through a Medicare Advantage plan may lose retiree health benefits if they choose to switch to traditional Medicare during the annual open enrollment period. Similarly, employers may only offer a retiree health benefit that supplements traditional Medicare. If a person with such coverage switches from traditional Medicare to Medicare Advantage during an open enrollment period, they may lose their retiree health benefits. In fact, if a Medicare beneficiary drops their employer or union-sponsored retiree health benefits for any reason, they may not be able to get them back.
Low-income Medicare beneficiaries who meet their states’ Medicaid eligibility criteria qualify for additional coverage of services not covered under Medicare, such as long-term services and supports. Additionally, Medicare beneficiaries with modest incomes may qualify for assistance with Medicare premiums and out-of-pocket costs from the Medicare Savings Programs (MSP) and Part D Low-Income Subsidy (LIS) if their income and assets are below certain amounts. Medicare beneficiaries who are eligible for Medicaid, the Medicare Savings Programs, or Medicare Part D Low-Income Subsidies, but not yet enrolled in these programs, can enroll at any time of the year. This additional coverage and assistance may factor into how people choose to receive their Medicare benefits.
Medicaid. For people who qualify for full Medicaid benefits, the choice of Medicare coverage can impact how they receive those benefits and the degree to which those benefits are coordinated with Medicare. In general, Medicaid wraps around Medicare coverage, with Medicare as the primary payer and Medicaid paying for costs and services not covered by Medicare. People dually eligible for Medicare and Medicaid can enroll in a Medicare Advantage plan designed for this population, such as a dual-eligible special needs plan, and depending on the state and the plan, experience a higher level of coordination of their benefits. People who qualify for full Medicaid benefits can switch their Medicare coverage outside of the open enrollment period, up to once per quarter.
Medicare Savings Programs. State Medicaid programs pay Medicare premiums and, in many cases, cost sharing for Medicare beneficiaries who have income and assets below certain amounts (which vary by state). Specifically, states cover the Medicare Part B premium for people who qualify and may also provide assistance with Medicare deductibles and other cost-sharing requirements. People who receive MSP assistance and are enrolled in a Medicare Advantage plan may still have cost sharing associated with non-Medicare covered services offered by the plan. People who qualify for MSP can also switch their coverage outside of the open enrollment period, up to once per quarter.
Part D Low-Income Subsidy. People who qualify for the Part D Low-Income Subsidy (LIS) receive varying levels of assistance toward their Part D prescription drug coverage premiums and cost sharing, depending on their income and asset levels. Dual-eligible individuals and people enrolled in the Medicare Savings Programs automatically qualify for full LIS benefits, and Medicare automatically enrolls them into a stand-alone Part D drug plan in their area with a premium at or below the regional average (the Low-Income Subsidy benchmark) if they do not choose a plan on their own. Other beneficiaries are subject to both an income and asset test and need to apply for the LIS through either the Social Security Administration or Medicaid. People who receive LIS assistance can select any Part D plan offered in their area, but if they enroll in a plan that is not a so-called “benchmark plan” (that is, plans available without a premium to enrollees receiving full LIS), or their current plan loses benchmark status, they may be required to pay some portion of their plan’s monthly premium, which would diminish the value of the subsidy.
Traditional Medicare and Medicare Advantage both provide coverage of all services included in Medicare Part A and Part B, but certain features, such as out-of-pocket costs, provider networks, and access to extra benefits vary between these two types of Medicare coverage. When deciding between traditional Medicare and Medicare Advantage, people may want to consider a variety of factors, such as their own health and prescription drug needs, financial circumstances, preferences for how they get their medical care, and which providers they see. These decisions may involve careful consideration of premiums, deductibles, cost sharing and out-of-pocket spending; extra benefits offered by Medicare Advantage plans; how the choice of coverage option may affect access to certain physicians, specialists, hospitals and pharmacies; rules related to prior authorization and referral requirements; and variations in coverage and costs for prescription drugs.
People may prefer traditional Medicare if they want the broadest possible access to doctors, hospitals and other health care providers. Traditional Medicare beneficiaries may see any provider that accepts Medicare and is accepting new patients. People with traditional Medicare are not required to obtain a referral for specialists or mental health providers. Additionally, prior authorization is rarely required in traditional Medicare and only applies to a limited set of services. With traditional Medicare, people have the ability to choose among stand-alone prescription drug plans offered in their area, which tend to vary widely in terms of which drugs are covered and at what cost.
People may prefer Medicare Advantage if they want extra benefits, such as coverage of some dental and vision services, and reduced cost sharing offered by these plans, often for no additional premium (other than the Part B premium). Additionally, Medicare Advantage plans are required to include a cap on out-of-pocket spending, providing some protection from catastrophic medical expenses. Medicare Advantage plans also offer the benefit of one-stop shopping (i.e., people who enroll have coverage under one plan and do not need to sign up for a separate Part D prescription drug plan or a Medigap policy to supplement traditional Medicare).
The average Medicare beneficiary can choose from 43 Medicare Advantage plans offered by 9 insurance companies in 2023. These plans vary across many dimensions, including premiums and out-of-pocket spending, provider networks, extra benefits, prior authorization and referral requirements, and prescription drug coverage. As a result, enrollees face different out-of-pocket costs, access to providers and pharmacies, and coverage of non-Medicare benefits (such as dental, vision and hearing) based on the Medicare Advantage plan they choose.
Premiums and out-of-pocket spending. Medicare Advantage enrollees may be charged a separate monthly premium (in addition to the Part B premium). In 2023, the average enrollment-weighted premium for Medicare Advantage plans was $15 per month, though seven in ten enrollees were in plans that charged no additional premium (apart from the Part B premium).
Medicare Advantage plans are generally prohibited from charging more than traditional Medicare, but vary in the deductibles, co-pays and co-insurance they require. For example, plans typically charge a daily co-pay for hospital stays, which vary both in the amount and the number of days for which they apply. Among the 53 Medicare Advantage plans available in Philadelphia, PA in 2023, this amount ranges from $195 per day for up to seven days to $450 a day for up to four days.
Medicare Advantage plans are required to include a cap on out-of-pocket expenses. In 2023, this cap may not exceed $8,300 for in-network services or $12,450 for all covered services . Most plans have an out-of-pocket limit below this cap, averaging $4,835 for in-network services and $8,659 for in-network and out-of-network services combined. Out-of-pocket limits only apply to services covered under Medicare Parts A and B.
Provider networks. Medicare Advantage plans are permitted to limit their provider networks, the size of which can vary considerably for both physicians and hospitals, depending on the plan and the county where it is offered. Medicare Advantage plans that include prescription drug coverage may also establish pharmacy networks or designate preferred pharmacies, where enrollees will have lower out-of-pocket costs. If a Medicare Advantage plan provides coverage of out-of-network providers, it may require higher cost sharing from enrollees for these services.
Extra benefits. Medicare Advantage plans may choose to offer extra benefits not covered by traditional Medicare, such as some coverage of dental, vision, and hearing services. Virtually all Medicare Advantage enrollees are in a plan that offers extra benefits, including some coverage of eye exams and/or eyeglasses (more than 99%), hearing exams and/or aids (99%), a fitness benefit (99%), and dental care (97%). Additionally, a majority of Medicare Advantage enrollees are in plans that provide an allowance for over-the-counter items (90%) and meals following a hospital stay (78%). While extra benefits are common, the scope of coverage varies widely from plan to plan. For example, in 2021, more than half (59%) of Medicare Advantage enrollees were in a plan with a maximum dental benefit of $1,000 or less, while nearly one-third (30%) were in a plan with a limit between $2,000 and $5,000.
Prior authorization and referral requirements. Medicare Advantage plans may require enrollees to receive prior authorization before a service will be covered. In 2023, virtually all Medicare Advantage enrollees were in plans that required prior authorization for some services, such as inpatient hospital stays, diagnostic tests and procedures, or stays in a skilled nursing facility. Prior authorization may also be required for some services included in a plan’s extra benefits, such as hearing and eye exams or comprehensive dental services. In addition, Medicare Advantage plans may require enrollees to obtain a referral from a primary care provider in order to see a specialist or mental health provider.
Prescription drug coverage. Medicare Advantage enrollees who want prescription drug coverage must choose a plan that offers this coverage, as they are not permitted to enroll in a stand-alone prescription drug plan while enrolled in Medicare Advantage. Medicare Advantage plans that include prescription drug coverage may also charge a drug deductible, though most do not. In 2023, the average drug deductible (including plans with no deductible) was $58. Drug coverage in Medicare Advantage plans varies along the same dimensions as drug coverage in stand-alone Part D plans
The average Medicare beneficiary has 24 stand-alone Part D plans to choose from in 2023 (Figure 4) (in addition to a large number of Medicare Advantage drug plans, if they want to consider Medicare Advantage for all of their Medicare-covered benefits). For traditional Medicare beneficiaries who want to add Part D coverage, stand-alone Part D plans vary in terms of premiums, deductibles and cost sharing, the drugs that are covered and any utilization management restrictions that apply, and pharmacy networks. These differences can affect enrollees’ access to prescription drugs and out-of-pocket costs.
Premiums. People in traditional Medicare who are enrolled in a separate stand-alone Part D plan generally pay a monthly Part D premium unless they qualify for full benefits through the Part D Low-Income Subsidy (LIS) program and are enrolled in a premium-free (benchmark) plan. In 2023, the average enrollment-weighted premium for stand-alone Part D plans was $40 per month.
Deductibles and cost sharing. Deductibles and cost-sharing requirements for prescription drug coverage are variable. In 2023, most stand-alone Part D plans included a deductible, averaging $411. Plans generally impose a tier structure to define cost sharing requirements and cost sharing amounts charged. Plans typically charge lower cost-sharing amounts for generic drugs and preferred brands and higher amounts for non-preferred and specialty drugs, and charge a mix of flat dollar copayments and coinsurance (based on a percentage of a drug’s list price) for covered drugs.
Drugs covered and utilization management restrictions. Part D plans include a list of drugs they cover (also referred to as a plan’s formulary). In addition, plans may also impose utilization management restrictions on covered prescription drugs, including prior authorization, quantity limits, and step therapy, which can affect beneficiaries’ access to medications. In 2023, around 30% of covered drugs are subject to prior authorization.
Pharmacy networks. Part D prescription drug plans may establish pharmacy networks or designate preferred pharmacies, where enrollees will have lower out-of-pocket costs.
No. The prescription drug provisions in the Inflation Reduction Act of 2022 that aim to lower out-of-pocket costs apply to all Part D plans, including both stand-alone Part D plans and Medicare Advantage Prescription Drug plans. Regardless of whether beneficiaries get their drug coverage from a stand-alone Part D plan or a Medicare Advantage drug plan, they will benefit from these changes.
As of 2023, cost sharing for insulin is now capped at $35 per month per prescription. All Medicare Part D plans, both stand-alone drug plans and Medicare Advantage drug plans, will be required to charge no more than $35 for whichever insulin products they cover, although plans will not be required to cover all insulin products. Beneficiaries who use a specific insulin product should verify coverage of their product before enrolling in a specific plan.
Also as of 2023, adult vaccines covered under Medicare Part D that have been recommended by the Advisory Committee on Immunization Practices (ACIP) must now be covered at no cost to enrollees. This change does not impact the small number of vaccines covered under Medicare Part B (such as the flu, pneumonia, and COVID-19 vaccines), many of which were already covered free of cost. Finally, drug companies are now required to pay rebates to the Medicare program if the cost of drugs used by Medicare beneficiaries rises faster than the rate of inflation each year, similar to the rebate system used by the Medicaid program.
Additional provisions will come into effect at the start of 2024, including phasing in a cap on out-of-pocket costs for prescription drugs covered under Medicare Part D by eliminating cost sharing above the catastrophic threshold in 2024 and setting the cap at $2,000 in 2025, and expanding eligibility for full benefits under the Medicare Part D Low-Income Subsidy Program, which assists qualifying beneficiaries with their Part D premiums, deductibles, and cost-sharing expenses. Other changes to the Medicare Part D program will be introduced in 2025 and beyond.
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