Medicare Open Enrollment (Part 1 of 3)

The Medicare open enrollment period began last week and it will end on December 7.  As a so-called senior who is approaching 65 years of age, I found myself ignorant as to Medicare coverage and its various parts, as they are called.  I spoke with Ashley Hutchinson, who is a Medicare counselor for Bath and Highland Counties, and she gave me an overview.

It seems that Medicare has four parts and they’re called Part A, Part B, Part C and Part D.   You may be familiar with the term original Medicare. That refers to Parts A and B.  Both of these parts are provided by the federal government and they are generally available to anyone who paid Medicare taxes for at least 40 quarters of employment.  Part A covers inpatient hospitalization and it will pay 100% of the hospital’s charges for the first 60 days of the patient’s hospital stay.  After that, the patient is charged a substantial copay for each additional day in the hospital.  Part A also covers skilled nursing care, hospice care and limited home healthcare services.  In 2019, there is an annual deductible of $1,364 for Part A.

Medicare Part B covers outpatient hospital and doctor visits, laboratory tests, medical equipment, mental health care, ambulance services and some home healthcare.  Part B is optional and there is a monthly premium if you choose to enroll in it.  But, if you choose to defer enrollment in Part B, you will be assessed a 10% penalty for each year you defer coverage.  Part B only covers 80% of the charges for the services and equipment provided, so the patient is liable for the remaining 20%.  In addition, there is an annual deductible that must be paid before Part B coverage kicks in.  For 2019, the monthly premium for most seniors is $135.50 and the annual deductible is $185.00.  The monthly premium will be higher for beneficiaries with incomes greater than $80,000 per year.

Part C is also optional and it is provided by private insurance companies.  Part C covers the same services that Parts A and B cover, but Part C plans may also cover additional services such as dental and vision care.  Some Part C plans cover prescription medications, as well. The specific services and medications covered vary by plan, so it is important to look closely at each plan to make sure it covers the services and medications needed.  The important thing to know about Part C coverage is that the insureds are required to join either a preferred provider organization – also known as a PPO – or a health maintenance organization – also known as an HMO.  Because insureds have limited choices among health care providers and frequently must travel significant distances to use them, it is important that those enrolling in Part C coverage review the available healthcare providers to ensure they will be able to take full advantage of the services offered.

Medicare Part D covers prescription medications.  Since prescription drugs can be a significant expense for many seniors, and since Part C plans usually does not appeal to those of us in the Allegheny Highlands due to the limitations imposed by preferred provider and health maintenance organizations, it is important to investigate Part D plans.  Part D plans are provided by private insurers and they, too, are optional.  The degree of coverage varies by insurer, but plans will generally cover a portion of the prescription cost.  Not all insurers cover all prescription medications, though, so it is important to make sure that any medications currently taken are included in the plan chosen plan.  And, as with Part B, there is a penalty for not enrolling in Part D at age.  In this case, it is 1% per month for each month that enrollment is deferred.

Let’s revisit Part C for a minute.  As you recall, Part C may cover some additional services that Parts A and B exclude, such as dental and vision care, but it requires joining a PPO or an HMO, which frequently is an unworkable option for most in our rural area.  This is where supplemental insurance – commonly referred to as Medigap – comes in.  Medigap is similar to Part C insurance but it does not have the requirement that the insured join a PPO or an HMO.  Patients may use any healthcare provider that accepts Medicare.  The trade-off is that Medigap insurance is a little more expensive than Part C insurance, but it can be a better value due to its flexibility. Importantly, Medigap plans pay for many of the out-of-pocket costs that Parts A and B leave to the patient, such as hospital copays.

In part two of this story, I will investigate the costs of the various parts discussed in this story, including Medigap.  This is Mickey Frank Thomas for Allegheny Mountain Radio.

Below are the names and contact information for the Medicare counselors in each of the three counties served by Allegheny Mountain Radio:

Ashley Hutchinson (Bath and Highland Counties)

Virginia Insurance Counseling & Assistance Program

(540) 468-2656

Lorrie Batton (Bath County)

Bath Community Hospital

(540) 839-7188

Rebecca Bivens (Pocahontas County)

West Virginia Disability Network

(304) 425-2040