By R. R. Fletcher, Contributing Writer
Have you started thinking about Medicare? If you are close to your 65th birthday, probably. And, on the surface, joining Medicare may seem straightforward―sign up, and you are covered.
But, like most things, Medicare is far from simple.
The Medicare program providing health coverage and increased financial security for older Americans without employment-linked group coverage insurance was signed into law in 1965 by President Lyndon B. Johnson. The law also established the Title XIX Medicaid program, which offered people eligible for cash assistance a type of health care coverage.
Medicare, Medicaid, and the Social Security program were relatively narrow in scope and supported by payroll taxes.
But Medicare and Medicaid are very different today.
If you are looking to dispel a few Medicare myths as you approach the next stage of your life, here are a few definitions that may help you navigate the waters.
Medicare’s four parts
First, Medicare comes in several parts―Medicare Part A, B, C, and D. You may also hear about Traditional Medicare.
Medicare Part A is similar to ‘major medical,’ often thought of as ‘hospital coverage.’
Part B is what most people think of as ‘Medicare.’ Part B generally covers patient care such as doctor visits, therapy, lab testing, specialists, equipment like oxygen, and wheelchairs.
Part C is labeled Medicare Advantage and was added by the Tax Equity and Fiscal Responsibility Act (TEFRA) in 1997. Private insurance networks administer Medicare Advantage as HMO or PPO-styled insurance.
Part D is Medicare Drug Coverage. It first went into effect in 2006 and covers most common use drugs.
Now that we know the terms let’s see if we can clarify some misconceptions.
Traditional or Original Medicare is where everyone starts.
Everyone automatically qualifies for Medicare Part A
True-ish. If you paid Medicare taxes at any point in your life, you are eligible for Medicare Part A―premium free. If you did not pay Medicare taxes but are at retirement age and a U.S. citizen or permanent resident, a Medicare Part A buy-in option exists. You may also be able to buy into Part B.
Everyone automatically qualifies for Medicare Part B
False. A strong misconception is that everyone automatically gets Medicare. Every U.S. citizen over 65 is eligible, but they must meet a few standards to receive benefits. Eligibility depends on when and how long you worked or disability status. The Medicare and You Handbook is a good reference detailing the requirements and is available from the Center for Medicare and Medicaid Services (CMS).
You can’t apply until your 65th birthday
False. Applications for Medicare are accepted three months before through three months after your 65th birthday.
Medicare Part B is free―or costs the same for everyone
False. Most people pay a standard premium. However, if your IRS reported income is above a certain amount, you may pay an Income-Related Monthly Adjustment Amount (IRMAA). Keep in mind, many Medicare Advantage plans and some Medicaid plans will cover Part B premiums.
Medicare covers everything
False. Original, also known as Traditional Medicare, covers most medically necessary and some preventative services. But it doesn’t cover everything.
Traditional Medicare does not pay for:
- Routine dental exams, dentures
- Regular eye exams, eyeglasses, or contacts
- Hearing aids
- Care outside the United States
- Long-term care
- Cosmetic surgery
- Chiropractic services
- Alternative treatments
Also, traditional Part B will pay for approximately 80% of the cost of services while the beneficiary is responsible for the other 20%.
MassHealth offers One Care, a Medicare and MassHealth combo that will pay Part B premiums and Medicare prescription drug coverage. Massachusetts also standardizes Medigap insurance covering the 20% usually owed by the beneficiary.
Medicare coverage is on a network
True and False. Traditional Medicare allows for options when choosing a practitioner, but doctors must be enrolled with CMS to serve Medicare patients at both levels.
Medicare Advantage programs operate similar to private insurance networks. The Massachusetts networks allow for additional services such as dog walking, eye exams, and gym memberships, but these ‘free’ services may affect premiums.
Original Medicare covers preexisting conditions
True. Traditional Medicare has always considered and paid for coverage for preexisting conditions. However, Medicare does not usually pay for experimental or unproven procedures.
Joining Medicare is a process, and just like any other major decision, helped by a bit of time and research. If you are retiring and transferring your health coverage, many employers have a cross-over program or someone that can help. Once you are signed up, your plan decision is never permanent, and you can change your plan every fall during ‘open enrollment.’
Just don’t wait, as the CMS website warns, and not join Medicare when you are first eligible, as this may have financial consequences later.