How to pick a Medicare plan: Some advice from Austin-area experts
You have to be a rocket scientist to figure out Medicare — and even then, a rocket scientist might need help. That's where people like Yvette McVey, a certified benefits counselor at Area Agency on Aging of the Capital Area and the Capital Area Council of Governments, comes to the rescue.
Medicare is health insurance available for anyone who is 65 or older or anyone with certain health conditions regardless of age, such as end-stage renal disease or Amyotrophic Lateral Sclerosis.
Many health insurance companies offer Medicare seminars, but participants should understand they are selling their coverage plans, not recommending what might work best for each individual.
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AGE of Central Texas is offering a free web seminar Saturday to help.
Medicare's annual enrollment is Oct. 15 through Dec. 7 for coverage that begins Jan. 1. If you are turning 65, your enrollment period begins three months before your birth month and ends three months after your birth month. If you enroll before your birth month, it takes effect the first day of the month of your birth, in general.
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Part A is hospital insurance, which also covers skilled nursing facilities, hospice care and home health care.
Part B is for doctor's appointments, preventive care such as vaccines, outpatient care and some home health care.
Part D is for prescription medication.
How much does Medicare cost?
Most people pay no premium for Part A, because they or their spouse paid into Medicare through deductions from paychecks for at least 10 years, or 40 quarters. There is a $1,600 deductible for 2023. Costs to patients for hospital stays range from zero for the first 60 days to 100% after 150 days.
For Part B, most people will pay $164.90 per month in 2023. There is a $226 deductible before Medicare starts paying. Participants usually pay 20% of all costs. There is no maximum out-of-pocket expense here with Medicare, so costs can add up.
For Part D, costs vary according to which plan you choose and your income.
Using Medicare.gov, you can enter your ZIP code and find plans, including Part D and Medigap (we'll get to that below) and see what is available and in what price range. We found Part D plans from $6.60 a month to $81.70 a month and deductibles ranging from $100 to $505 in the 78704 ZIP code.
What happened to Part C?
Well, that's a whole other ball of wax. Part C is also called an Advantage plan. It most resembles your employer-paid or private insurance. You sign up with an insurance company such as Humana or Aetna, and it covers everything from hospital stays to doctor visits to prescriptions. It's like having Part A, B and D in one plan, but instead of everything covered at 80%, you have copays, deductibles and maximum out-of-pocket expenses. The advantage is you know how much you could possibly spend in a year.
All plans are different, but Medicare.gov has a great resource that allows you to look up your ZIP code and compare plans based on what they cover, monthly costs, deductibles and out-of-pocket expenses. You also can put in your prescriptions and which pharmacy you use to make sure each is covered under the plan.
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Medicare.gov allows you to pick a few plans and do a side-by-side comparison. Using Medicare.gov, we found a $0 monthly premium plan that had a $750 health deductible and a $505 medication deductible, with a $6,700 in-network maximum. We also found an $88 monthly deductible plan with a $0 health deductible, $300 drug deductible and a $6,050 in-network maximum. In addition, there are differences in your copays for doctor visits, from $0 to $50 a visit.
Similar to employer-provided insurance, there are in-network and out-of-network doctors. You'll want to make sure all of your doctors are in-network.
What is Medigap?
When you sign up for Medicare, it's a good idea to sign up for Medicare Supplement Insurance, also called Medigap. This will cover the 20% that Medicare isn't paying as well as help with deductibles. You pay a monthly premium to your Medigap insurer, and each insurer will differ in costs and coverage. Remember, with "original" Medicare, there isn't a maximum out-of-pocket expense.
It doesn't cover everything. Usually, you're still paying extra for long-term care that is not skilled nursing, vision, dental, hearing aids, eyeglasses and private nursing.
If you are signing up for "original" Medicare — that's A, B and D — you should get your Medigap policy at the time you first sign up. The costs can't go up on these policies, even if you get sick, and the insurer can't reject you for previous health issues. If you sign up after, you will have to go through a qualifying process and can be charged based on your age and current health situation.
Medigap is only for people with A, B and D Medicare, not people who have Part C or an advantage plan. If you start out with an Advantage plan and decide to switch to an "original" Medicare A, B and D, strategy and try to pick up a Medigap plan, you'll also have to qualify and pay more.
You also might not need a Medigap plan if your employer offers retirees supplemental insurance that covers the 20%.
What are the biggest mistakes people make?
The biggest mistakes people make in selecting their coverage plan is forgetting to get all the different parts of Medicare. They might take Part A, which is the hospital part, but then forget to get Part B, the doctor visits, or Part D for prescriptions, McVey said.
If they don't get Part B, they would be paying in full for everything except hospital stays. There are penalties if they don't get Part B when they sign up at age 65. It's roughly 10% for each year they didn't sign up.
There also are penalties for not signing up for Part D — 1% extra each month that you could have signed up. That's 12% more a year.
The penalties are for the life of the plan, so signing up for B and D is important when you initially sign up for A.
The second biggest mistake is taking traditional Medicare without taking a Medigap plan when first signing up. People will end up paying more for it when they do sign up, and their health and age will be factored into the cost.
The third mistake is not picking a plan that actually covers you in your ZIP code. That's why using Medicare.gov to pick your plan, whether Parts A, B and D or Part C (Advantage), is important, because it starts with your ZIP code.
The final mistake is not signing up for assistance programs. In Texas, assistance is available through two programs for individuals who make less than $1,133 a month or couples making less than $1,526 and have resource limits of $7,970 for individuals or $11,960 for couples. In another program, the monthly limits are $2,265 and $3,052.
You can call 800-252-9240 to talk to someone at the state who can help you get qualified or go to hhs.texas.gov/services/health/medicare.
Where to get help
Area Agency on Aging of the Capital Area: 512-916-6178, capcog.org/divisions/area-agency-on-aging/, or email bcinfo@capcog.org.
AGE of Central Texas Medicare 101 online workshop, 10 a.m. Saturday, Free, but you must register: 512-600-9275, or online at TinyURL.com/AGEoctober2022.
This article originally appeared on Austin American-Statesman: How to pick a Medicare plan: Some advice from Austin-area experts
