Medicare basics

[MUSIC PLAYING]
ANNOUNCER: Getting Medicare can be
one of the most daunting steps we take as adults.
Whether you're newly eligible for Medicare, soon to retire,
or considering your planning options,
understanding the basics of Medicare
is a great place to start.

In the following slides, you'll hear
us address some of the most commonly asked
questions about Medicare.
Let's start with the basics.

What is Medicare?
Medicare is a federal health insurance program
for eligible US citizens and legal residents.
Medicare is funded in part by taxes you pay while working,
and Medicare is individual health insurance.

Medicare is available for qualifying individuals.
For example, you must be a US citizen or a legal resident.
Legal residents must live in the US
for at least five years in a row, including the five years
just before applying for Medicare.
In addition, to qualify for Medicare,
you must be 65 or older, or younger than 65 with
a qualifying disability, or any age with a diagnosis
of end-stage renal disease or ALS--
also known as Lou Gehrig's disease.

So what does Medicare cover?
Original Medicare is made up of Medicare Parts A
and B. Medicare Part A is your hospital insurance,
and helps pay for hospital stays and inpatient care.
Medicare Part B is your medical insurance,
and helps pay for doctor's visits and outpatient care.
Let's talk about Medicare Part A first.
Medicare Part A, your hospital insurance,
covers hospital stays and inpatient care,
such as your hospital room and meals or care in special units,
to name a few.

Medicare Part A is premium free if you or your spouse
worked and paid taxes for 10 years or longer.
You cannot be denied Part A coverage.
Coverage is nationwide, including
any qualified hospital in the US.
Coverage and costs are per benefit period.
You must be admitted as an inpatient.
You can't be on observation status, for example.
And part A provides additional 60 lifetime reserve days.
What that means is that, in addition
to the 90 days of inpatient hospital care
each benefit period covered by original Medicare,
you also have an additional 60 days of coverage that
can be used only once in your lifetime.
You would still be required to pay your coinsurance
for each day used.
Now, let's move on to Medicare Part B. Medicare Part
B, your medical insurance, covers doctor visits
and outpatient care, such as screenings,
preventive services, mental health care, blood tests,
and diagnostic tests, as well as other programs and services.

Your monthly Part B premium is adjusted for income.
You cannot be denied Part B coverage.
Like Part A, coverage is nationwide,
including any provider who accepts Medicare.
If you are late to enroll in Medicare Part B,
you may pay a premium penalty for late enrollment
that lasts as long as you're enrolled in Medicare.
You'll learn more about Medicare's penalties later
in this presentation.
Medicare does not cover everything.
Now that we've seen what Medicare Parts A and B cover,
it's important to know what original Medicare does not
cover.
All the costs of your care--
you will have out-of-pocket costs.
There is no limit to how much you can potentially pay.
Original Medicare also does not cover
prescription drugs; routine dental, vision, or hearing
care; eyeglasses, contacts, or hearing aids;
long-term or custodial care, such as help bathing,
eating, or dressing; excess charges for services by doctors
who don't accept Medicare assignment;
or care received outside the US, except for certain
circumstances, for example.

So now that we know that Original Medicare doesn't
cover everything, let's talk about how
you can get more coverage.
You have two options for obtaining additional coverage.
One option is to add a Medicare supplemental insurance
plan that helps pay for some of the out-of-pocket costs that
come with Original Medicare.
With a Medicare supplement plan, you
would also need to consider adding a Medicare Part D
plan, which helps pay for prescription drugs.
Both MedSup and Part D plans are offered by private companies,
and are in addition to Original Medicare.
Medicare Part D helps with the cost of prescription drug
coverage.
You must be enrolled in Part A, Part B, or both
to be eligible to obtain Part D. You may be required
to use a pharmacy network.
Coverage and costs vary by plan, and may change each year.
And if you don't enroll when you're first eligible and don't
have any coverage, you may pay a late enrollment penalty
for life.
Another option for obtaining more coverage
is to enroll in a Medicare Advantage Plan.
Medicare Advantage Plans are also
known as Medicare Part C. These plans combine your Medicare
Parts A and B into one plan, and usually include Medicare Part
D, prescription drug coverage.
In addition to Medicare Advantage,
combining your original Medicare Parts A and B and Medicare Part
D, these plans may offer additional benefits not
provided by Original Medicare.

Let's look at Medicare Advantage a little closer.
Medicare Advantage is a way to get additional Medicare
benefits.

All Medicare Advantage plans cover all the benefits
of Original Medicare Parts A and B,
with the exception of hospice care, which is still covered
by your Part A. In addition to covering everything
that Original Medicare covers, most Medicare Advantage plans
cover Medicare Part D, prescription drugs.
Medicare Advantage plans may also offer additional benefits
and features, such as dental exams, cleanings, and x-rays,
eye exams, glasses, and corrective lenses, hearing
tests and hearing aids, wellness programs
and fitness memberships, to name a few of the most
common benefits.
Additionally, unlike Original Medicare Parts A and B,
all Medicare Advantage plans have
an annual out-of-pocket maximum to help
protect against high costs.
The following is a quick rundown of Medicare Advantage plans,
Part C. To be eligible to enroll in Part C,
you must already be enrolled in both Medicare Parts A and B,
and live in the plan's service area.
You cannot be denied Medicare Advantage coverage based
on your current financial or health status,
including pre-existing conditions.
You may be required to use provider or pharmacy networks.
Your coverage and costs vary by plan.
Unlike with Original Medicare, Medicare Advantage plans
have an annual limit on how much you pay out
of pocket for COVID services some plans charge
a monthly plan premium.
You will need to continue to pay your Part B
premium to Medicare.

So how do you know which coverage option to choose?
First and foremost, you'll want to enroll in Medicare Parts A
and B once you enroll in Parts A and B,
you want to determine whether you
add a supplemental insurance plan to your original Medicare
in addition to adding a standalone Medicare Part D
plan.
Alternatively, you can simplify this process
by choosing an all-in-one Medicare Advantage
plan that combines your Parts A, B, and D into one plan.
As we saw earlier, Medicare Advantage plans
may offer additional benefits not provided
by original Medicare.
Such as dental and vision coverage, fitness memberships,
discounts on over-the-counter drugs,
and assistance in keeping costs down
by limiting annual out-of-pocket costs for covered services.
Let's take a closer look at the differences
between a Medicare Supplement plan and a Medicare Advantage
plan.
Looking at coverage, Medicare Supplement
plans help pay for some costs not paid by Original Medicare,
but they don't help with prescription drug costs,
while Medicare Advantage plans provide
all the benefits of Original Medicare and then some,
with most Medicare Advantage plans
including prescription drug coverage, and many offering
dental and vision care, among other benefits.
Both plan types may have options for foreign travel coverage.
In regards to costs, MedSup plans
have monthly planned premiums.
If you wanted to have prescription drug coverage,
you would need to purchase that separately and pay
an additional plan premium for that coverage.
Medicare Advantage plans may charge monthly premiums,
with many plans offering low or no monthly costs.
And most Medicare Advantage plans
include prescription drug coverage
without the additional costs.
And unlike Original Medicare or MedSup plans,
Medicare Advantage plans limit your annual out-of-pocket costs
for covered services.
It's important to look at your options
in advance of your initial enrollment period.
If you don't enroll in Medicare Parts A and B,
and choose a plan with drug coverage
when you're first eligible, you may incur lifelong penalties.

Let's talk about when you can enroll.
Most of us are first eligible to enroll in Medicare
during our initial enrollment period.
This seven-month window refers to the three months
before your 65th birthday, the month you turn 65,
and the three months following.
If you're already receiving Social Security or Railroad
Retirement benefits at age 65, or you've
been receiving Social Security benefits for 24 months,
you will be automatically enrolled
in Medicare Parts A and B.
If you don't meet that criteria, then you'll
want to contact your local Social Security office or visit
ssa.gov to enroll.
It can take two to three months or longer
to receive your Medicare card, so it's
important you enroll yourself early
in your initial enrollment period
to avoid gaps in coverage and late enrollment fees
that may be imposed by Medicare.
If you missed your initial enrollment period,
you can also enroll in Medicare during Medicare's
general enrollment period, which is January
1 through March 31 each year.
During this time, you can enroll in Medicare Part A and B,
or both.
Your coverage will begin on July 1 of that same year.
Once you enroll in Medicare Parts A and B,
you're eligible to enroll in a Medicare Advantage plan, Part
C, that includes prescription drug coverage between April 1
and June 30 of the same year.
Be mindful that, if you wait to enroll
in Medicare during Medicare's general enrollment
period and your initial enrollment period window
has passed, you may incur late enrollment premium penalties
for both Parts B and D that last a lifetime.
If you choose to work past 65 and have
proof of creditable coverage, you
may choose to delay your initial enrollment.
Here's how.
Your employer will provide you with a notice
of creditable coverage.
This notice will help you determine
whether you need to enroll in Part D or not,
when you're first eligible.
If you have creditable coverage through your employer
or other group coverage, you can avoid late enrollment
penalties.
If you work past 65 and don't have
proof of creditable coverage, you
may incur lifelong penalties.
We'll discuss that in a little more detail shortly.
When you do retire, you will have an eight-month window
in which you can enroll in Medicare Parts A and B,
starting when your employer coverage ends or when you stop
working--
whichever comes first.
Once you enroll in Part B, that triggers
your special enrollment period.
You will have only two months from that point
to enroll in a standalone prescription drug plan
or to enroll in an all-in-one Medicare Advantage
plan that includes your Part D prescription drug coverage.
If you do not enroll in Part B and in a plan that
includes prescription drug coverage
during your special enrollment period,
you will need to wait until the next general enrollment period.
Waiting to enroll in Medicare's general enrollment period
could result in you having to pay late enrollment penalties,
because you could have had Part B, but did not enroll,
and you had a gap in prescription drug coverage
of 63 days in a row or more.
These penalties for Parts B and D
will apply for you as long as you have Medicare.

As we've seen, Medicare imposes late enrollment penalties
for Parts A, B, and D. Let's begin with Part A.
If you do not qualify for premium free Medicare Part A
or you meet certain conditions that
allow you to sign up for Part A during a special enrollment
period, then your monthly premium may increase 10%,
if you sign up late.
If you incur that penalty, you'll
have to pay the higher premium for twice the number of years
you could have had Part A, but did not sign up.
With Part B, in most cases, if you don't sign up
when you're first eligible, your monthly premium for Part B
may increase 10% for each full 12-month period
that you could have had Part B, but didn't sign up for it.
In addition, you may have to wait
until the general enrollment period from January 1
to March 31 to enroll in Part B. If you incur that penalty,
you'll have to pay this penalty for as long as you have Part B.
Now, let's look at Part D. Medicare
imposes late enrollment penalties
if you go 63 days or more without creditable coverage.
This penalty is 1% per month of the national base beneficiary
premium times the number of full uncovered months
that you did not have Part D or creditable coverage.
This penalty is added to your monthly Medicare prescription
drug plan premium for as long as you have prescription coverage.
It may also continue to increase each year, if the national base
beneficiary premium increases.
You'll want to note that COBRA insurance is not considered
creditable coverage for Medicare Part B,
and is only considered creditable coverage for part D
if the plan you're enrolled in is equivalent to or better
than Medicare's standard prescription drug coverage.

Avoiding a gap in coverage and enrolling when you're first
eligible is key to avoiding Medicare's late enrollment
penalties.
Another way to avoid Medicare's late enrollment penalties
is by enrolling in Medicare Parts A and B,
and choosing an all-in-one Medicare Advantage plan, Part
C, that includes prescription drug coverage when you're first
eligible.
You also have the opportunity to enroll in a Medicare Advantage
plan each year during Medicare's annual election period.
If you're covered by your employer's group health care
coverage when you're first eligible for Medicare,
talk to your employer about your requirements
for enrolling in Medicare Part B. You
may choose to delay enrollment, if you have
proof of creditable coverage.
This also applies to Medicare Part D, your prescription drug
coverage.
For more information on how Medicare's late enrollment
penalties may apply to you, contact your local broker
or visit medicare.gov.

Medicare's annual election period takes place October 15
through December 7 every year.
During this period, you can switch from Original Medicare--
Parts A and B--
to a Medicare Advantage plan--
part C-- or vice versa.
You can also switch from one Medicare Advantage plan
to another, or you can switch, drop, or join a Medicare
prescription drug plan.
Outside of Medicare's annual election period,
you have an opportunity to switch plans
if you have a qualifying life event, such as moving out
of your service plan area, losing health care coverage,
or getting financial help with Medicare, for example.
In addition to special enrollment periods
to enroll in Medicare or elect new coverage,
there are also opportunities for qualifying beneficiaries
to get financial assistance.

There are different forms of financial assistance available.
Extra Help is a federal program that
helps pay for some out-of-pocket costs for Medicare prescription
drug coverage, such as premiums, deductibles, and coinsurance.
There are options for full or partial Extra Help,
and eligibility will vary.
Medicaid, known as MediCal in California,
is a program that offers free or low-cost health coverage
for individuals with limited income and resources.
MediCal bases your eligibility on your income.
It is not based on how much money you have saved
or if you own your home.
You do not have to be on public assistance
to qualify for MediCal, and you can apply for MediCal coverage
through Covered California any time.
Medicare savings programs are available from the state
to help pay your Medicare premiums,
and may also pay Part A and Part B deductibles,
coinsurance, and copayments if you meet certain conditions.
There are also programs for all-inclusive care
for the elderly, also known as PACE.
These programs provide comprehensive home
and community-based health care services to participants.

For more information on financial assistance programs,
additional resources, and to learn more about Medicare
and your options, you can visit sutterhealth.org/medicare.
Contact Medicare directly at 1-800-MEDICARE, or visit
medicare.gov.
You can also reach out to your local Social Security office
at 1-800-772-1213.
Or contact MediCal at 1-800-541-5555.
Alternatively, you can send us an email
at medicare@sutterhealth.org to have us put you
in contact with a local licensed insurance agent who can
walk you through your options.