All you need to know about Medicare and its plans

Are you turning 65 in a few months? Are you suddenly getting more Medicare advertisements in the mail, or seeing them on TV? Do you know what to do with them? What makes it worse is that they all look similar yet say something completely different. You think to yourself, “Why is all of this so complicated?” Let’s start with the basics.

What are the basics of Medicare?

Before you jump into wanting to know what Medicare Part C is, it’s better to understand the basics first. Medicare is a federal health insurance program for people aged 65 or older, younger people with certain disabilities, and people with End-Stage Renal Disease.

Part A, B, C or D: which one to go for?

Part A is hospital insurance provided by the federal government. It helps pay for inpatient stays, hospice care, skilled nursing facilities and more. You don’t pay a premium for it if you or your spouse paid Medicare taxes for 10 years. The Part A deductible applies to every benefit period, so it’s possible to pay more than one deductible in a year, and there is no cap on total costs each year. A benefit period starts when you go into a hospital or skilled nursing facility overnight, and ends once you’ve been out for 60 days in a row.

Part A and Part B together are called “Original Medicare.” Part B is medical insurance provided by the federal government. It helps pay for doctor visits, medical equipment, lab tests, ambulance rides and more. Most new Medicare members pay a premium, and the monthly cost depends on your income. After the Part B deductible, Medicare pays 80% of the Medicare-approved amount for a covered service. There is no cap on what you can spend each year.

Part C, also known as Medicare Advantage, is offered by private insurance companies that contract with the federal government. To qualify for a Part C plan you must first be enrolled in Medicare Parts A and B and keep paying your Part B premium. The private insurance company becomes your primary insurer, and every plan must cover at least what Parts A and B cover. Most plans include prescription drug coverage, and some offer additional benefits such as hearing aids or eyeglasses.

Part D plans provide prescription drug coverage. They are also offered by private insurance companies contracted with the federal government, and they go alongside Original Medicare. Each plan has its own list of covered drugs and pharmacies, and your costs depend on the coverage stage you are in.

Is Medicare Advantage good for you?

If you sign up for a Medicare Advantage plan for the wrong reasons, you can end up disappointed in the coverage, and it can cost you a lot of money. Medicare Advantage plans are privatized Medicare plans: your benefits are managed by the private insurance company you signed up with. An Advantage plan can work well for you, but make sure the plan meets three things:

1. Your doctors. The doctors you see now, and the ones you want to see in the future, should be in the plan’s network.
2. Your medications. Many people on expensive medications can be better off on a Medicare Advantage plan, but not always. It’s something you must check.
3. Medicaid. If you’re on Medicaid (Medi-Cal in California), a Medicare Advantage plan could be an excellent option.

Plans can look great because of perks like “zero-premium” options, free gym memberships and extra dental and vision coverage. Picking a plan on those perks alone, instead of the three things above, is one of the most expensive mistakes people make. Following advice from friends and family about the plans that work for them is another: their situation is not yours.

Choose wisely, and make sure the plan fits your situation. That’s exactly what Doug helps with.

What’s the enrollment process for Medicare?

You’re enrolled in Medicare automatically if you already receive Social Security benefits when you turn 65. Some people under 65 are also enrolled automatically, for example because of a disability or ALS.

How long does enrollment take?

That depends on the method you choose. Signing up online takes as little as 10 minutes with a phone or laptop. If you prefer to sign up in person, it depends on how soon you can get an appointment.