Medicare Basics


Most people become eligible for Medicare health insurance when they turn 65. Some may become eligible earlier if they have been receiving Social Security Disability Benefits for two years, or have been diagnosed with ESRD (End Stage Renal Disease) or ALS.

  • Enrollment Caution: When you turn 65, it is important to have Medicare insurance, or insurance that is creditable for Medicare (such as most active work insurance) to avoid lifetime penalties and delayed enrollment periods when you do wish to start Medicare.

Medicare insurance has five different parts that can be combined in two different ways to create your Medicare insurance. The two basic ways to insure yourself with the Medicare parts are Original Medicare or Medicare Advantage (Part C).

 

If you choose Original Medicare, you will have Medicare Part A and Part B, choose a prescription drug plan (Part D) and have the option to add a Medigap Supplement plan (except for those under 65 years).

If you choose Medicare Advantage, most likely all of your insurance – hospital, medical and prescription –  will be included in one plan. You will need to enroll in Medicare Part A and Part B prior to your enrollment in Medicare Part C.

Medicare Part A insurance covers inpatient hospitalization, some followup skilled nursing or home health care, and in-home hospice care.

  • Offered by federal government – administered by CMS (Centers for Medicare and Medicaid services).
  • No monthly premiums for most.
  • Deductibles and copays when using most services, no out-of-pocket maximum..
  • Accepted by a national network of Medicare providers.

You can enroll in Medicare Part A at your local Social Security office, or online at Social Security.

Enrollment Caution: If you are receiving Social Security benefits at or after turning 65, you must take Medicare Part A (even if you have other insurance through an employer) or you will not be able to continue receiving your Social Security benefits.

If you or your employer are contributing to an HSA (Health Savings Account), neither of you will be able to continue contributing to the HSA once you start Medicare Part A and/or Part B. However, your HSA funds can still be used to pay for qualified medical expenses.

If you start Social Security after turning 65, your Medicare Part A start date will be back dated up to six months (no further than your 65th birthday month). That means, you should stop contributing to your HSA at your expected back dated start date.

Medicare Part B insurance covers medical costs including outpatient hospitalization, emergency room visits, physicians, laboratory testing, diagnostic testing, therapy and durable medical equipment.

  • Offered by federal government – administered by CMS (Centers for Medicare and Medicaid services)
  • Monthly premiums for all, with higher premiums for those with higher income.
  • Annual deductible, copays when using most services, no out-of-pocket maximum.
  • Accepted by a national network of Medicare providers.

You can enroll in Medicare Part B at your local Social Security office, or online at Social Security if you are enrolling in both Medicare Part A and Part B.

Enrollment Caution: Enrolling in Medicare Part B for the first time after turning 65 triggers your only ‘guarantee issue’ enrollment period for a Medigap Supplement policy. Most delay enrolling in Medicare Part B if they have active employer insurance through work or their spouse’s work. VAS can help you determine your Medicare enrollment timing.

If you delay enrolling in Medicare Part B when you are 65 and older and are not covered by active work insurance, you may have a delayed enrollment window and a permanent monthly penalty when you do enroll.

Medigap Supplement insurance pays for some or all of the Medicare deductibles and copays for Medicare approved services, depending on which Medigap Supplement plan you choose.

  • Offered by private insurance companies within your state
  • All have monthly premiums that vary based on Medigap plan type and insurance company.
  • Accepted wherever Medicare is accepted.

A VAS counselor can meet with you and provide detailed information on Medigap policies that are available.

Enrollment Caution: You have only one ‘guarantee issue’ enrollment period for a Medigap Supplement that begins when you first start Medicare Part B after turning 65 and ends six months later.

Medigap Supplement policies are generally not available to those under 65 in Nebraska. Your options would be to enroll in Original Medicare (Part A, Part B, Part D) without the Medigap Supplement, or enroll in a Medicare Advantage plan (Part C).

Medicare Part D Prescription Drug Insurance covers many brand name and generic prescriptions.

  • Offered by private insurance companies within your state
  • All have monthly premiums, with higher premiums for those with higher income
  • May have annual deductibles with copays for most prescriptions that may vary by pharmacy.
  • May not be accepted by all pharmacies.

You may schedule an appointment with a VAS counselor to review the prescription drug plans costs and coverage available in Nebraska.

Enrollment Caution: Even if you take few or no drugs, it is important to have a Part D prescription drug plan when you turn 65, or have “creditable coverage” through other insurance such as employer or VA, to avoid a permanent late enrollment penalty in the future.

The Medicare Part C Advantage plan is all-in-one insurance covering hospital, medical and prescription drugs.

  • Offered by private insurance companies in county of residence
  • Have low or no monthly premiums
  • Have copay for most health services with an annual out-of-pocket maximum for health coverage.
  • May have annual deductibles with copays for most prescriptions that may vary by pharmacy.
  • Accepted only by health providers in the local network (HMO) or possibly out-of-network with higher copays and out-of-pocket maximums (PPO). Accepted everywhere Medicare is accepted in an emergency.

Enrollment Caution: You must be enrolled in Medicare Part A and Part B to enroll in Medicare Part C.

Be sure to check with all of your providers to see if they will accept the Medicare Advantage plan before you enroll. Once you enroll, most likely you will have to wait until the next open enrollment period to change plans (up to a year).

You may schedule an appointment to meet with a VAS counselor to show you the Medicare Advantage plans available in your county.

For more information on Medicare go to the Medicare Self Study Guide.

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