Almost 65

Almost 65? What you need to kn= ow about Medicare

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We help you sort out your options, which will depend on any number of factor= s.

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Mar 4, 2005

Medical Economics

Medicare is a topic that's a constan= t in most physicians' lives. You treat Medicare patients, accept assignment in= your practice, or perhaps you're part of a Medicare PPO, HMO, or private fee-for-service plan. But if you're approaching 65, do you know what opti= ons are available to you as a Medicare recipient? The facts may come a= s a surprise. But before we get into the details, let's review what Medicare consists of:

Part A (hospital insurance) h= elps cover your inpatient care, including acute care hospitals and skilled nur= sing facilities (not custodial or long-term care). It also helps cover hospice care and some home healthcare. As long as you or your spouse paid Medicare taxes for at least 10 years, you're covered under Part A at no charge.

Part B (medical insurance) he= lps cover your doctors' services and outpatient care. It also pays for some o= ther medical services that Part A doesn't, such as some physical and occupatio= nal therapy, laboratory services, preventive services, durable medical equipm= ent, and home healthcare. Medicare Part B costs $78.20 per month in 2005, and = it's deducted from the payments you receive from Social Security. In addition,= you also pay a $110 annual deductible.

Information on Medicare, including t= he handbook, Medicare & You 2005, is available at www.medicare.gov. =

"How do I enroll in Medicare?"= If you're already receiving Social Security = when you turn 65, you'll automatically get both Medicare Part A and Part B on = the first day of the month in which you turn 65. If you're not planning to receive Social Security benefits at age 65, you should enroll in Medicare anyway. Your initial enrollment period begins three months before your 65= th birthday and runs for three months after. If you don't sign up during that initial enrollment period, you can enroll in the first three months of ea= ch year, but the premiums will cost you more: The cost of Part B goes up 10 percent for each 12-month period that you could have had the coverage but didn't take it, except in special cases. As Deane Beebe, communications director for the Medicare Rights Center in New York City= , points out, "It's heartbreaking. You hear about people who delayed enrolling in Part B for a really long time because they received misinformation, and it cost them a lot for the rest of their lives."=

However, if you or your spouse is st= ill working when you turn 65, and you get health insurance through that job, you may = want to delay signing up for Medicare Part B, and you can do so without penalt= y as long as you sign up while you're still covered by the employer plan or du= ring the eight months following the month when employer group health plan cove= rage ends, or when the employment ends, whichever is first. Your decision on timing may be affected by the size of the employer and who would be the primary payer.

If 20 or more people work for= your practice or at your spouse's company, the practice's group health plan is= the primary payer of your medical bills.

If fewer than 20 people work = for your practice or at your spouse's company, you should talk to the employee health benefits administrator before making any decision not to take Medi= care Part B. Medicare would be your primary payer and your group insurance wou= ld be the secondary payer.

If you're retired and have health insurance from a former job, sign up for Medicare when you turn 65. If you have retiree benefits, they'll coordinate with Medicare.

"How do I choose the right plan for me?" Before you pick a Medi= care plan, think about your current and anticipated health needs. Is there a particular doctor you prefer to see? Do you have a condition that requires frequent doctor visits? How many times have you been hospitalized in the = past couple of years? How much have you spent on healthcare in the past few ye= ars? Will you travel when you retire?

Once you've assessed your health nee= ds, you can choose the Medicare option that best suits them. The two basic options are:

Original Medicare (also known= as traditional or regular Medicare) is the fee-for-service program. The government pays for part of each service you get. When you sign up for Me= dicare, you're automatically enrolled in this plan. You can use almost any doctor= or hospital in the country, whenever you need to. But unless you have supplemental coverage in the form of a Medigap policy, you'll pay a large hospital deductible that will run several hundred dollars per benefit per= iod, a $110 annual deductible for doctors' visits or other visits not covered = by other parts of Medicare, and 20 percent of the cost of most outpatient medical care. Original Medicare doesn't cover most outpatient prescription drugs, routine dental care, hearing aids, vision care (it will cover glau= coma testing if you're in a group at high risk), routine foot care, or long-te= rm care.

Medicare Advantage is the new= name (it used to be Medicare + Choice) for private health plans that the government contracts with to provide Medicare benefits to individuals who join them. Most of these plans are HMOs, but there are some PPOs and priv= ate fee-for-service plans. Some people choose these plans because they may of= fer benefits such as limited drug coverage, preventive care, eyeglasses, and hearing aid discounts in addition to regular Medicare-covered services. If your plans include travel, remember that the HMO is obligated to pay for = any emergency or urgent care you receive from out-of-network providers. But o= nce your condition stabilizes, your HMO may refuse to cover your care in the out-of-network facility. You may not be covered for emergency care at all= if you travel outside the US. Check with the HMO regarding its policy.

You must have both Medicare Part A a= nd Part B to join a Medicare Advantage plan and you must continue to pay your Medicare Part B monthly premium. A Medicare HMO will only give you access= to certain doctors or hospitals within your area unless you have an emergenc= y. You must choose a primary care physician from the network. That doctor wo= uld give you a referral to see a specialist. Even though you may think it's s= illy for you, as a doctor, to have to check out other physicians, you may wish= to if you're considering a Medicare Advantage plan. You can check their credentials on the HMO's Web site, with the AMA (www.ama-assn.org),= click on Doctor Finder under For Patients, and with the American Boa= rd of Medical Specialties (www.abms.org/login.asp). Your public library may ha= ve the AMA or ABMS directories in hard copy if you don't have access to the Internet. Or, you could contact your state medical society. You'll find a list of state medical societies' Web sites at www.ama-assn.org/ama/pub/category/7630.html .

While the perks of a Medicare HMO mi= ght appeal to you, some plans charge a monthly premium in addition to the Par= t B premium. Medicare Advantage plans are available in most areas of the coun= try, but many people stick with original Medicare because, despite the fact th= at some doctors are no longer accepting Medicare patients, it still has a wi= de choice of doctors and hospitals nationwide.

Unfortunately, no matter which Medic= are option you choose, you'll likely have gaps in coverage. If you have origi= nal Medicare, you can fill many gaps through retiree coverage or Medigap poli= cies. If you're in a Medicare HMO and don't have retiree coverage, you'll likely have to pay any additional HMO premium and copayments out of pocket.

"Do I really need a Medigap plan?&q= uot; Original Medicare doesn't cover deductibles, doctor and hospital coinsurance or copayment, and emergency care outside = the country. However, most "Medigap" plans do. When shopping for su= ch a plan, make sure it's clearly identified as "Medicare Supplement Insurance." This supplemental coverage is available through private = insurance companies and some private organizations, including the AMA and AARP. When you sign up for Medicare Part B, you automatically begin your six-month Medigap open enrollment period. Once that period begins, it can't be chan= ged or restarted. (If you've chosen a Medicare Advantage plan, it's illegal f= or anyone to sell you a Medigap policy.)

There are 10 different types of Medi= gap plans, labeled A-J. Plan A offers the fewest benefits and is usually the least expensive; Plan J offers the most benefits and is usually the most expensive. All the plans must include the following basic benefits: hospi= tal coinsurance coverage; 365 days of full hospital coverage over the patient= 's lifetime as a Medicare enrollee after you use all Medicare hospital benef= its; 20 percent of the cost of your medical care that Medicare doesn't pick up after you pay the $110 deductible; and the first three pints of blood you need each year. As you move up the ladder, depending on which Medigap plan you choose, you can get extra coverage for hospital deductibles; skilled nursing facility coinsurance; emergency care outside the US; c= osts associated with recovering at home; Part B excess charges; preventive car= e; and limited prescription drug coverage.

Federal regulations require that all Medigap policies of the same type offer the same benefits. (However, Massachusetts, Minnesota, and Wisconsin require Medigap policies that are specific to each of those states.) That= 's why when you're deciding which company to buy from, the most important factors to consider are cost and the company's financial stability. A lar= ger organization with a national reputation will usually be on a firmer footi= ng than a smaller company you've never heard of. If in doubt, check with a ratings service such as A.M. Best (www.ambest.com) or Weiss Ratings (www.weissratings.c= om). To review the benefits of each plan, go to www.medicarerights.org/medigap_a-j.html , or look at the Medicare Personal Plan Finder available at www.medicare.gov <= i>, or print the publication Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare at www.medicare.gov/Publications/Pubs/pdf/02110.pdf.

Internist Richard R. Grayson of Geneva, IL, purchased his supplemental policy through the AMA. GP Patricia L. Elliott, who practices in Rapidan, VA, a rural area, purchas= ed hers from Anthem Blue Cross and Blue Shield through her local Farm Bureau because it was cheaper than the AMA's Medigap policy. "Shop around," Elliott warns. "See if the groups you're affiliated wi= th offer Medigap policies." Your state department of insurance can give= you a list of companies that sell Medigap coverage in your state. You can find the Web site for your state's department of insurance at the National Association of Insurance Commissioners Web site: www.naic.org/state_contacts/sid_websites.htm. You can also call your State Medical Assistance Office, which can be foun= d at (www.medicare.gov/Contacts/Include/DataSection/Questions= /SearchCriteria.asp?) or call (800-MEDICARE) for free help.

"What if I want to see a nonpartici= pating doctor?" If you want to con= tinue seeing your own doctor when you're Medicare eligible and he or she doesn't accept Medicare, you may be asked to sign a private contract. The private contract only applies to the services you get from the doctor who asked y= ou to sign it. Or, you could follow Pat Elliott's advice: "I'd find ano= ther doctor." You can't be asked to sign a private contract in an emergen= cy or when you get urgently needed care.

If you sign a private contract with = your doctor, you'll have to pay whatever he or she charges you and you won't be able to file a claim with Medicare. (Medicare won't pay even if you do.) = Your Medigap policy, if you have one, won't pay for privately contracted servi= ces either.

Before providing a service to you, a nonparticipating physician must tell you whether Medicare would pay for i= t if you got it from a participating physician. And your doctor must tell you = if he or she has voluntarily opted out of, or been excluded from, the Medica= re program.

"What if I'm 65 but my spouse is younger?" If you're covered= under your spouse's health plan, you may not need to sign up for Medicare Part = B. However, if your coverage is primary and your spouse isn't working, he or= she will lose health benefits once you retire. (Some retiree benefits cover spouses, but that's less and less common these days.) "In that situation," Deane Beebe points out, "some people have chosen to work past 65 to continue coverage for the younger spouse."

Another option is to have your spouse start a Health Savings Account (HSA). The money in these tax-free accounts can be used to pay for medical expenses incurred by you, your spouse, or = your dependents. Tax-deductible contributions may be made up to a maximum of $2,650 for individuals and $5,250 for families. Amounts distributed from = an HSA aren't taxable as long as they are used to pay for qualified medical expenses, in connection with health insurance plans that have an annual deductible of at least $1,000 for individuals and $2,000 for families.

As Richard Grayson discovered, "= ;I recently became acquainted with HSAs when my wife changed jobs. After her COBRA expired, she opened an HSA through State Farm and enrolled in a high deductible Blue Cross Blue Shield plan." For more information on HSA= s, see "Tame Your Health Insurance Costs," in our Feb. 4, 2005 iss= ue and available at www.memag.com/memag/article/articleDetail.jsp?id=3D1447= 69.