Medicare Updates for 2007

THE JOURNEY TO MEDICARE AND BEYOND

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MEDICARE – PART A & B

In 2007, your Medicare A will automatically start at 65, the first day of the month of your birthday. There is no charge to you for Part A and is for use in the hospital settings.

Part B is automatic and starts like Part A as long as you do not UNCHECK the form you get from the Social Security office. We HIGHLY recommend taking Part B because without Part B you cannot get Part D (prescription coverage) and Part C (added insurance). Part B covers outside the hospital like doctor visits, home health, etc.

Your Social Security check will be debited $93.50 (July 2007 rate) per month for Part B. It could go up if you made over $160,000 for the year by the selling of property or stocks, etc., and the Social Security office monitors that via your tax returns. It also can go down in premium, but that means you are below the poverty line.

Medicare Part A and B only cover around 75% of all your medical bills. We recommend you always carry Part B! A good part of your health care will be done outside the hospital, and this is where Part B comes in.
The best way to find what Medicare A and B pay and do not pay is to call up a local brokerage firm and ask them for a Mutual Of Omaha, medical supplement plan or something compatible to that.
There is a booklet that will come with it that shows what Part A and B pay for and what that company pays on the rest of the coverages. It is very “black and white.”
Now you are at a fork in the road. Stay only with Part A and B and pay the rest on your own, or have a ?gap plan? (also called Part C) to cover the rest. You have the following two choices if you choose to add coverage to your current Medicare Part A and B.

A. Go with a Medicare Advantage Plan (also called Senior Care Plans).

These plans are like plans under 65 with copays, deductibles, etc. They are cheaper than Medicare Supplement Plans and will run between 0-60 dollars a month per person.
Upside is that rates are low, and you can apply for these plans mostly anytime throughout the year, even if you are sick.
Insurance companies are taking over the Medicare A and B and getting reimbursed by the government. They are the ‘admin’ of your plan, but behind the curtain the government (our taxes) is paying for the bills.
Why can insurance companies charge so little? Because it is managed care. They can’t take away benefits, but they can limit the benefits. For example, if Medicare A and B state 10 days of stay in the hospital after ?x? surgery, the insurance company may take you out of the hospital in 7 days to save money for them, and still get the monies from the government. Insurance companies must keep the 75% of the benefits the same, but can do what they want on the other benefits.
Copays and deductibles that you will pay will come out of the 25% of the costs Medicare Part A and B won’t cover.
Conclusion: Senior Care Plans look cheap now; but when you have medical issues, you will be paying a lot out-of-pocket costs via copays and deductibles, as well as having more managed care.

MEDICARE – PART C

B. The other fork in the road is Medigap (also called Medical Supplements).

You will want this, if you can afford it. The rates will vary from state to state, but they will run between $150-180 per month.
There will be about 9 choices: Plan B (B having fewer benefits than plan C and so forth) to Plan J. The best and middle-of-the-road is Plan F.
Congress sets the benefits. So the benefits are solid and do cover 100% of what Medicare Part A and Part B does not cover (depending on which plan you choose).
You will want to go with a national supplement plan and not with a local in-state supplement plan. The reason is that if you move out of that state and become a resident of another state, you cannot take your local supplement plan with you. You will have to apply again and may get declined.
You can get on a supplement plan from 6 months prior to 6 months after your 65th birthday without getting underwritten and declined. However, you will need to still fill out an application. After age 65 and six months, you will have to go through underwriting if you want a supplement plan, and you may get declined.
Yes, the supplement plans are expensive; but when you hit those medical issues, you will be glad you had it because all you have to do is pay the premium.
The other thing is you can choose any doctor you want as long as they take Medicare patients. So you have more choices. More choices mean you pay more for that benefit.
Conclusion: We highly recommend a national supplement plan for your Part C. It is better to bite the bullet now and pay the extra cost for future situations. Also, go with a national carrier. There are a few good ones, but the one that we recommend is the Mutual of Omaha supplement plan, and their Plan F is the best for the cost.

Here are the current 2007 rates:

Part A Premium: It will cost zero dollars (you have paid into it via your, 40 plus quarters).

Part B Standard Premium: $93.50 (2007 rates)

Part C – Optional, depending on Medicare Supplement plan

Here are two good websites to check out:

http://www.ssa.gov/mediinfo.htm

http://www.medicare.gov/spotlights.asp#medicare2007

MEDICARE – PART D

This is prescriptions-only coverage. Here are the facts on Part D:

There are three parts to this. Draw a donut on your paper and divide it equally in thirds, north to south. Then while on the first part (the left), $2250, the middle (the hole) $3000, and the third (right part) 10% or $50.
There are copays on the first part. For example, if the prescription costs a total of $1000 (which I am making up), your insurance company will pay ?x? amount and the government pays the rest. You pay only the copay amount.
Once your total cost (governed by the government) reaches $2250, then you go to point two (the donut hole), and you pay the total amount. The $3000 will take you three months to get through.
Now you are at the start of month six. Part 1 takes you through Jan. and Feb.; Part 2 starts because the $1000 cost makes you jump from the $2250 into the donut hole where you pay the total amount. So Part 2 is March, April, and May. Then in June you hit Part 3, and you will pay 10% of the drug or $50, depending on if it is a generic drug or a brand drug.

The above is the simplest way to explain Medicare Part D.

Do you have to have Part D? No. But for every month you are not on it, you get dinged by the government of 1% of the average monthly premium cost when you do decide to get on it. For example, if you start Part D when you turn 70, then you have gone 72 months without it. Now you will pay a total of 172% of the cost of the monthly premium at that year’s rate.
Part D can be added 3 months prior to and 3 months after your 65th birthday. Currently, if you miss that open enrollment, you can only sign up from Nov. 15 to Dec. 31 of each year. There are a few other opportunities, but since we do not sell Part D, it is hard to keep up with the changes.
Where is the best place to get Part D? DO NOT let the insurance companies or Med Supp Plans bundle your Part C and Part D together (more money for them); but if you cancel one of the two (whichever you cancel), you will automatically cancel the other Part which means you may not be able to get on another plan till a later date.
Where should you get Part D? The easiest and best way is wherever you get your prescriptions filled. If you get them at Walgreens, then Walgreens will have the best Part D plan for you. Why? Because Part D states that 60% of all drugs must be the same nationally, but the other 40% can be what the insurance companies want. When you purchase Part D, it does not cover ALL prescriptions. So you will want a plan that will cover the drugs you are currently taking. If you are taking five different drugs, your plan may only cover four of those. Welcome to national health care!

All information above is general information. To get more concrete information that fits your situation please call us at 480-813-9100 or contact us by email.