Medicare Insurance

Supplemental Enrollment Period - You may sign up for a Medicare Supplemental (Medigap) plan any time of the year. However, the best time to buy a Medicare Supplement plan is during the six-month enrollment period that starts the first day of the month you turn 65 (as long as you have signed up for Medicare Part B). During this period you have a guaranteed issue right, which means you can't be denied. After this period, you may be required to answer medical questions in order to qualify for coverage.

Annual Enrollment Period - This enrollment period runs from October 15th to December 7th. If you choose to make changes during the Annual Enrollment Period, your new coverage won't begin until January 1st. During this enrollment period anyone can make the following changes to their Medicare plan or enroll in a Medicare plan:

Open Enrollment Period - This period takes place from January 1st through March 31st annually. It allows individuals enrolled in a Medicare Advantage plan to make a one-time election to go to either another Medicare Advantage plan or Original Medicare. In either case, your new coverage will start on the first day of the month following the month you make a change.

Special Enrollment Period - For certain situations, such as moving outside of your service area or losing your current healthcare or prescription coverage, you may be able to join, switch or drop a Medicare Advantage or prescription drug plan outside the basic enrollment periods.

The ABC...and Ds of Medicare

Medicare has four parts. Parts A and B are called Original Medicare and are run by the federal government. Part C is known as Medicare Advantage and Part D covers prescription drugs, both are purchased from private health insurance companies. Medicare Advantage plans combine Parts A and B, and often Part C. The last componenent of Medicare is Medicare Supplement plans, or Medigap. These plans can be added only to Original Medicare plans to help cover the out-of-pocket costs. Here's an overview of some of the things each part covers.

Part A: Original Medicare - Hospital care, skilled nursing facility care, hospice, home health care

Part B: Original Medicare - Doctor visits, outpatient surgery, lab tests, drugs administered in doctor's office, medical equipment (i.e. wheelchairs, walkers, etc.)

Part C: Medicare Advantage - Covers everything Parts A and B cover. Many plans also cover dental, vision, and prescription drugs.

Part D: Prescription Drugs - Prescription drugs

Medicare Supplement (Medigap) - Covers out-of-pocket costs not covered by Original Medicare Parts A and B.

Comparing Medicare Parts

Original Medicare - Original Medicare is a fee-for-service health plan in which the government pays for medical services and consists of two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). Original Medicare does not cover dental, vision, hearing, or for the costs of prescriptions. After you pay a deductible, Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance and deductibles).

Original Medicare vs. Medicare Advantage - Medicare Advantage plans are popular because of their convenience. Most plans combine medical and prescription coverage on one plan. Some offer dental and vision coverage, too. And you're able to predict your out-of-pocket costs better than you can with Original Medicare. When you have Original Medicare, you pay 20 percent of the cost, or 20 percent coinsurance, for most medical services covered under Part B. Medicare Advantage plans use co-pays more than coinsurance, which means you pay a fixed cost. You might have a $15 copay for doctor office visits, for example. And with Medicare Advantage plans, you have an out-of-pocket maximum. That means once you spend a certain amount of money on health care each year, your plan pays 100 percent of the cost of services it covers. Original Medicare doesn't have this cap. So if you get really sick, you'll end up paying a lot.

Medicare Advantage vs. Medicare Supplement (Medigap) - Medicare supplement, or Medigap, plans are another option. In a way, Medicare Advantage replaces Original Medicare and connects all the pieces together on one plan. Supplement plans don't replace Original Medicare. It's more like an extra you can add on top of Original Medicare. For example, your plan might pay the 20 percent coinsurance for doctor office visits. But if you go this route, you'll need to make sure you have prescription drug coverage. That means that if you don't have a Part D plan through an employer or union, you may face a penalty if you don't buy one on your own. And supplement plans don't come with the extra benefits you often get with Medicare Advantage, like dental and vision coverage.

Prescription Drug Coverage - Medicare Part D covers prescription drugs. You get it through a Part D prescription drug plan or through a Medicare Advantage plan. But it works differently from prescription coverage that comes with other health insurance plans. Medicare Part D prescription coverage has something called the coverage gap, or donut hole. The coverage gap is a stage in which you pay much more out of pocket for your prescription drugs. It's not based on a time period. It's based on how much you spend. The other important thing to be aware of is the Part D Late Enrollment Penalty. If you do not sign up for Part D when you first become eligible and try to sign up at a later date, you could incur a penalty on your premium for as long as you have prescription coverage.