Medicare 101 M


By Allison Goldberg, NRECA


edicare is a federal health care program covering seniors, the disabled and people with certain illnesses


and has four dis nct parts: A, B, C and D. Part A covers hospitaliza on, hospice and a limited amount of skilled nursing care with no premium cost. Part B covers doctors’ and outpa ent costs, similar to tradi onal health insurance, and requires payment of a monthly premium based on your gross household income. Part C, also called Medicare Advantage, is a program off ered by private insurers that combines the coverage of Medicare Parts A, B and o en D. These policies vary by insurer and loca on, and the benefi ts and costs may vary from tradi onal Medicare. Part D, the most recent addi on to Medicare, covers outpa ent prescrip on drug costs and requires the payment of a premium based on your gross household income. Notably, even a er fully paying your deduc ble, it may not cover all your drug costs if you reach the so-called “donut hole” or coverage gap. Part D premiums and programs vary by insurer.


Coverage


Part A: Hospital Insurance


Part B: Medical Insurance


Part C: Medicare Advantage


Hospitals, nursing facili es, home health


Preven ve services, e.g. doctor visits, tests, medical equipment


Combines parts A and B and o en includes prescrip on drug coverage; might be a PPO, HMO or other type of plan


Part D: Prescrip on Drug


Prescrip on drugs


Premium Deduc ble1 No


Yes, in 2016, $1,288/ benefi t period for fi rst 60 days


Yes2


Yes, in 2016, $166/year3


Insurer Government


Eligibility Are you eligible for Medicare? The answer is yes, if you’re a


1. U.S. ci zen or 2. Legal permanent resident for at least fi ve years


If one of the previous describes you, you may receive Medicare benefi ts at age 65, if


1. You (or your spouse) are eligible for Social Security or Railroad Re rement (“Social Security”) benefi ts


2. Or you (or your spouse) haven’t paid into Social Security but have paid Medicare taxes


Ci zens and legal residents with amyotrophic lateral sclerosis (ALS), end-stage renal disease (kidney failure) or a permanent disability (who have received disability benefi ts for two years or more) are also eligible for Medicare regardless of their age.


Government Yes


Yes, varies by plan


Private Insurer


Yes2


Yes, varies by plan


Private Insurer


1 As of the  me this ar cle was wri en, 2017 deduc ble informa on was unavailable.


2 Premiums vary based on income. 3 Automa cally deducted from Social Security or Civil Service re rement benefi t payments.


Automa c enrollment If you receive Social Security benefi ts before you turn age 65, Medicare Parts A and B (“basic Medicare”) coverage will begin automa cally on the fi rst day of the month in which you turn age 65. If you have been disabled and are receiving Social Security disability benefi ts for at least two years, you, too, will be enrolled automa cally in basic Medicare for coverage beginning the fi rst day of the month in which you turn age 65. If you have ALS or kidney failure, your basic Medicare coverage will begin when your disability payments begin. If you are s ll working and have a group health plan through your employer (or your spouse’s employer and you are covered by his/her policy), you may not wish or need to sign-up for Medicare. This is something you will want to discuss with your employer and benefi ts manager to determine the best, most cost-effi cient solu on for your situa on. Important to note: If you are covered by a high-deduc ble health plan, the prescrip on drug coverage provided under the group health plan does not off er creditable prescrip on drug coverage, which means you may be subject to a late enrollment penalty if you are enrolled in Medicare and wait to enroll in a Part D plan at a later date. In addi on, you cannot fund a health savings account (HSA) if you are enrolled in any part of Medicare (even if you are just enrolled in no-cost Part A). Seek the advice of a tax professional if you have further ques ons regarding your eligibility to fund an HSA.


Con nued on page 10 8 - NE Connection


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