Medicare is a federal government program providing health coverage to individuals who are:
- Age 65 and over.
- Eligible for Medicare Part B and receiving kidney dialysis treatments.
- Under age 65, disabled, and have been receiving Social Security benefits for 24 months.
Medicare is divided into two main parts: Part A (hospital coverage) and Part B (medical coverage).
What You Should Know
- Part A - Hospital Coverage: Medicare Part A Provides Hospital Coverage for Which Most People Are Automatically Eligible When Turning Age 65
- Part A is financed by taxes on employers and employees.
- Part A provides coverage for inpatient hospital care, hospice care, limited skilled nursing care, and home health care. Copays, co-insurance, and a deductible may apply to each of these services.
- Part A deductible will be charged each time there is a hospitalization, as long as there are 60 days between each episode.
- You pay a deductible and no co-insurance for days 1-60 each benefit period.
- You pay co-insurance for days 61-90 of each benefit period.
- Once the deductible is paid, Medicare will pay a share of the covered health care expenses and you are responsible for a share of the covered services.
- Part B - Medical Coverage: Medicare Part B Provides Coverage for Doctor and Outpatient Services and Is Optional to Purchase
- Part B is financed by individual monthly premiums, which are usually deducted from a person’s Social Security check.
- Medicare will pay 80 percent of covered health care costs and you are responsible for the remaining 20 percent.
- Some preventive services are covered with no charge, including a yearly “wellness visit.”
- Medicare deductibles and co-insurance amounts are adjusted on an annual basis.
- Medicare Advantage Plans (MA)
MA plans replace original Medicare by providing all of Part A and Part B coverage. MA plans must cover all of the services that original Medicare covers except for hospice care.
MA plans are offered by private insurance companies approved by the federal government and are sometimes referred to as “Part C.” It’s important to note that MA plans:
- May require the use of network providers.
- May offer different co-payments, co-insurance, and deductibles than original Medicare.
- May offer extra benefits, including vision, hearing, or dental coverage.
- May include prescription drug coverage, also known as a Part D plan. (Read on for more information about Medicare prescription drug coverage.)
- These plans are not Medicare Supplement policies even though the plans cover similar benefits. For this reason, individuals do not need a MA plan and Medicare Supplement plan at the same time.
MA plans are regulated under the authority of the Center for Medicare and Medicaid Services (CMS), a federal agency. The Department of Insurance and Financial Services (DIFS) does not have authority over MA plans; therefore, DIFS does not review or approve the contract language or the rates for MA plans. However, DIFS does license most of the health insurers that issue MA plans in Michigan.
- Medicare Prescription Drug Coverage (Part D)
Prescription drug coverage is a voluntary benefit available to everyone with Medicare and is offered by private insurance companies approved by the federal government. Health insurers offer a variety of Part D plan options, with different covered prescriptions and costs. Prior to purchasing a plan, it is important to verify that your prescriptions are covered under the plan and what your financial responsibility will be. Important features about Part D monthly premiums and other plan costs are:
- Part D plans charge a monthly premium in addition to the Medicare Part B premium.
- MA plans offering Part D coverage may include a charge for the prescription drug coverage in the monthly premium.
- The amount you pay for Part D coverage may differ based on your income.
- Part D plans may have yearly deductibles that must be met before the plan begins to pay its share of covered medications.
- After the deductible has been met, the insured may be responsible for co-payments and co-insurance.
DIFS does not have authority over Medicare prescription drug plans; therefore, DIFS does not review or approve the contract language or the rates for MA plans. However, DIFS does license most of the health insurers that issue Medicare Part D plans in Michigan.
- MA and Prescription Drug Plans Through a Retiree or Group Health Plan
If you are covered under an employer group MA plan, Medicare Part D plan, or retiree health plan, any changes in the plan or coverage are determined by the employer.
Plan changes may only occur during open enrollment. It is important to know if your plan changed or if there are other plan options available.
Questions regarding plan changes may be directed to your employer’s human resources department or use the contact number provided on any written communication received.
- Open Enrollment for MA and Medicare Part D
You may only enroll, switch, or drop a MA or Medicare Part D plan during certain times of the year.
Once enrolled in a MA or Medicare Part D plan, enrollment must continue for the rest of the calendar year. There are limited circumstances in which these plans may be dropped or switched during the year.
For more information, visit www.medicare.gov, call 800-MEDICARE (800-633-4227) or the Michigan Medicare/Medicaid Assistance Program (MMAP) at 800-803-7174.
- More Information on Medicare
For more information on the Medicare program, visit www.medicare.gov. A “Frequently Asked Questions” section is available and covers many senior health care topics.
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