Adding More Medicare Benefits to Your CoverageSeptember 15, 2020
Traditional Medicare is administered by the Centers for Medicare and Medicaid Services and consists of four parts; A, B, C, and D.
Medicare Part A and Part B form what is known as Original Medicare. Together, they provide a foundation of health benefits for millions of Americans and help defray much of the associated costs. However, not all health-related services and costs are covered with only Part A and Part B.
Without additional coverage, enrollees are not covered for some services, or they will have to pay out-of-pocket costs for several types of services.
Costs and coverage gaps can be minimized by adding several other types of Medicare plans, like Part C, Part D, and supplement plans.
Understanding what Original Medicare covers versus what enhanced coverage will provide, as well as what the associated costs are, is critical to managing your finances and healthcare issues as effectively as possible.
To understand what might be the best options for you, first, let’s take a quick look at what Original Medicare does and does not cover.
What Part A Covers
Part A, which is sometimes called Medicare hospital insurance, covers hospital costs and other related inpatient expenses. This includes hospice, skilled nursing facilities, and some home-based health circumstances.
Coverage includes a semi-private room, hospital meals, nursing services, intensive care, drugs and medical supplies used during your stay, lab tests, and x-rays, operating and recovery services, some blood transfusions, rehabilitation, and symptom management.
When you enter a nursing facility, you must require a level of care that can’t be provided at home or from your primary care doctor. Nursing care must be ordered by a doctor and be administered daily by a professional nurse or therapist.
Hospice care is covered when you agree that you are accepting palliative care instead of other Medicare-covered treatments. You agree you have been given six months or less to live, and you are only seeking assistance to live comfortably until you pass.
Hospice coverage does not include any treatment to cure your condition or your room and board. Your coverage does include some doctor and nursing services, medical equipment, prescription drugs for pain and discomfort, homemaker services, some therapy services, and counseling.
If you enter recovery during hospice and want to switch from hospice back to regular treatments, you can do that at any time without losing coverage.
When you’re housebound, or a doctor orders home health care for you, you may be covered by a combination of Part A and Part B benefits.
What Part B Covers
Part B covers a wide range of services.
Some of those include wellness and preventative services, some of which are covered 100%.
When you first enroll in Part B, you can make a “Welcome to Medicare” visit with your doctor for a comprehensive overview to discuss your specific healthcare needs and concerns. You are also covered for an Annual Wellness Visit that includes a full health risk assessment, a review of your current vital information (weight, blood pressure, BMI, etc.), mental health, and additional discussions about your current state of health and concerns.
You are also covered for some preventative vaccines. But not all vaccines are considered preventative and would not be covered under Part B, but may be covered under Part D.
You are also covered for preventative treatments related to high blood pressure, glaucoma, obesity, HIV, cardiovascular, and some cancers, among others.
Women are covered at 100% for pap smears, pelvic exams, and breast exams every two years.
Part B covers outpatient mental health services such as depression screenings, psychotherapy, psychiatric evaluations, some prescriptions, and partial hospitalization.
Lab tests and X-rays are covered when your doctor orders a test to help diagnose a condition or as part of your annual checkup. Medically necessary blood tests, urine tests, tissue lab work, and some screenings are also covered. X-rays are covered at 80% of the Medicare-approved amount. You are responsible for the other 20%.
Emergency transportation is covered if other transportation could put you in danger or you are having a medical emergency and need immediate assistance. Coverage only includes transportation to the nearest medical facility that can give you the type of help you need.
Transportation is covered at 80% of the Medicare-approved amount, and your Part B deductible will apply.
Durable medical equipment (DME) is covered, but for coverage to apply, a DME must be able to withstand repeated use for at least three years. It must also be usable at home and must be used for a medical purpose only. Medicare will cover 80% of the cost.
Some examples of DME include canes, crutches, hospital beds, infusion supplies, nebulizers, commode chairs, CPAP devices, and more.
Part B also covers some home health care, but only that which is relatively short-term and related to a limited period of recovery due to an illness, injury, or condition.
What Part A and Part B do not Cover
In most cases, Part A and Part B coverage will meet the vast majority of medical insurance needs. But there are also many things Original Medicare does not cover. You’ll have to pay these costs unless you get additional coverage.
Some things Part A and Part B do not cover include:
- Hearing aids and related exams
- Long-term custodial care
- Most dental care and dentures (unless medically necessary)
- Alternative medicine, such as homeopathy, acupuncture, and acupressure.
- Elective and cosmetic surgery
- Eye exams for prescription glasses and most contact lenses
- Chiropractors are covered but only on a limited basis.
- Routine foot care unless it is the result of diabetes, cancer, multiple sclerosis, inflammation due to blood clots, chronic kidney disease, malnutrition, or related conditions.
- Most prescription drugs coverage
- Medically unnecessary amenities such as private hospital rooms, private nurses, and personal care items that hospitals may provide (shower supplies, TV, etc.).
- Custodial care includes daily activities such as bathing, grooming, dressing, meals, etc.
- Part A only covers skilled nursing, but not long-term nursing, either at home or in a nursing facility.
Medical services, for the most part, outside of the United States and its territories are not covered as well. A Medicare Advantage plan is required for international coverage.
Part B also only covers drugs you can’t self-administer. You’re only covered if you must receive medications in a hospital, doctor’s office, or health clinic. Part D coverage extends to nonprescription drugs, and remedies are also not covered under Part B.
Do I Need Additional Health Insurance If I Have Medicare?
Medicare provides a very basic level of coverage. That’s why millions of Medicare beneficiaries choose to enroll in a variety of additional health plans to get extra benefits. These additional Medicare plans may also allow you to see additional healthcare providers, like dentists and specialists, without incurring astronomical costs.
These plans generally have low enough premiums that it is reasonable to pay a bit more each month for these additional benefits. In fact, some people might qualify for $0 premiums!
Adding a Medicare Advantage Plan (Part C)
Medicare Advantage plans, also called Medicare Part C plans, can lower your out-of-pocket costs and provide more coverage when bundled with Original Medicare.
You must be enrolled in both Part A and Part B before you can sign up for a Part C plan.
Some Part C plans also cover prescription drugs that you take at home. You will need to check each plan’s formulary to see if the specific drug you need is covered by a plan. Typically, Part C coverage also will provide routine dental care, vision care, hearing care and hearing aids, and fitness benefits such as Silver Sneakers or other types of exercise classes.
Part C plans come in many forms, but the most popular varieties are PPO plans and HMO plans. The difference between Medicare Advantage PPOs and HMOs is that HMOs come with very strict physician networks and you’ll have to select one primary care physician, while PPOs allow you the freedom of a wide network. While PPOs may seem like the obvious choice, that flexibility can come with a higher price tag – so choose carefully!
Because not all plans provide the same levels of coverage, you may pay a higher premium for more coverage.
The Medicare Advantage marketplace is highly competitive, and it can be confusing to determine which policy is the best one for you. Your best bet is to work with an experienced agent who can answer all of your questions and guide you along the way.
You can enroll in Medicare Advantage either when you initially sign up for Medicare, during the Annual Enrollment Period (October 15 through December 7), or in some cases during the Open Enrollment Period (January 1 through March 31).
$0 Premiums and Special Needs Plans
Some people may be eligible for a $0 premium Medicare Advantage plan.
There are three types of Special Needs Plans:
- Chronic Special Needs Plans (CSNP) for people who have certain chronic conditions and need more coverage.
- Institutional Special Needs Plans (ISNP) for people who have been living in an institution such as an inpatient medical facility for 90 days or more.
- Dual Eligible Special Needs Plans (DSNP) are for people who are dual-eligible for both Medicare and Medicaid.
Adding a Medicare Prescription Drug Plan (Part D)
Prescription drug costs can be expensive, especially if you need highly specialized treatment or you’re on a fixed income. Adding a Medicare Part D prescription drug plan can be one of the smartest economic decisions you can make.
Just like with Part C plans, you’ll need to shop and compare Part D plans. A good place to start is to look at a possible plan’s formulary. This is the complete list of all prescriptions covered by that particular plan.
Match your existing and anticipated needs to the formulary for maximum savings.
Because formularies can change from year to year, also be sure to closely review your Annual Notice of Change every fall, to make sure your current coverage still best meets your needs.
You may still have some deductible and copayments to make, but typically you can save thousands of dollars depending on your situation.
Also, once you’ve paid a certain annual amount out of your own pocket, you are entitled to automatic catastrophic coverage. From that point on, your prescription drug costs are greatly reduced, and you’ll only pay a small copayment or coinsurance.
You may have heard of the “donut hole” with Part D coverage. This is the coverage gap that may require you to pay all drug costs yourself after Part D coverage has paid a certain amount for your prescription drugs. The good news is that federal healthcare legislation has been working to reduce the donut hole over several years, and in 2020, the gap is completely closed.
There are several times throughout the year you can sign up for Medicare prescription drug coverage. The first is during your Initial Enrollment Period. You can also enroll or make changes in your Part D plan during the Annual Enrollment Period that runs from October 15 through December 7 annually.
Additionally, a Special Enrollment Period occurs when you have a qualifying life event such as losing drug coverage or when you move from a particular plan’s area.
When you qualify for Medicare Extra Help you can also enroll in a Part D plan.
There are hundreds of private insurance companies offering Part D plans for Medicare beneficiaries – but they may not all be available in your area. It’s best to speak with an insurance agent to learn about all of the options available to you and to get guidance from a professional.
Adding a Medicare Supplement (Medigap) Plan
Medigap plans do what they sound like…they close the coverage gap in your existing Medicare Part A and Part B policies.
Medigap plans are also called Medicare Supplement plans. They are designed to cover your out-of-pocket Medicare Part A and Part B costs, including deductibles and copayments.
Medicare Supplement insurance plans are lettered A through N. Each lettered policy provides a different level of coverage offered by private companies contracted with Medicare. However, each Medigap plan with the same letter must offer the same core benefits, no matter which carrier you choose.
For example, if you choose Plan G to plug your coverage gap, the coverage will be the same no matter which insurer you pick.
Premium costs will differ, which is why you’ll need to shop around for the best insurance plans. Costs may also differ a bit because a carrier could offer services above the core benefits, or your location could cause a price fluctuation as well.
The ten Medigap plans are:
These apply to every state except Massachusetts, Minnesota, and Wisconsin. Wisconsin only has one Medigap plan option, and Massachusetts and Minnesota only have two.
Plan C and Plan F are not accepting new members after January 1, 2020. If you’re already enrolled in one of these plans, you can keep your coverage.
If you apply during your IEP (beginning three months before you turn 65 and ending three months after) and you have Medicare Part B, you have “guaranteed issue rights.” You can’t be denied Medicare Supplement enrollment or charged more based on your age, health status, or pre-existing conditions.
However, if you do have pre-existing conditions, carriers can impose up to a six-month waiting period before your benefits begin.
Most Medigap plans do not offer dental, prescription drug, vision, or hearing coverage. You will need a Medicare Advantage plan if you want coverage for those services.
You can purchase Medigap during any time of the year, but your IEP is when a plan will
be the cheapest and easiest to enroll.
Can I Add a Medicare Supplement at Any Time?
Technically, yes! Medicare Supplement plans are a bit different from Medicare Advantage plans in that you can enroll at any time of year. However, when you enroll can make a big difference in what you pay. Unlike Medicare Advantage plans, Medicare Supplement insurance companies can charge you more based on preexisting health conditions if you wait too long to enroll. If you are enrolling in Medigap right when you become eligible or due to circumstances beyond your control, you won’t have to go through medical underwriting. However, if you wait until you’re older to enroll just because you weren’t sure, you could face higher premiums than expected.
Who Qualifies for Additional Medicare Benefits?
Anyone who is already enrolled in Medicare Part A and Medicare Part B can start looking at additional Medicare benefits (Medicare Advantage, Medicare Supplements, Part D). Keep in mind that Medicare guidelines stipulate that you cannot have Medicare Advantage and Medicare Supplements at the same time, and you cannot have Medicare Advantage and Part D at the same time.
Getting Help With Your Medicare costs
In some cases, you may be able to get help paying for your Medicare costs through a Medicare Savings Program (MSP).
Eligibility for MSPs is based on your income, assets, and current Medicare coverage. Most states use the Federal Poverty Level as a guideline. Income limits are based on this and can change annually.
Resources such as stocks, bonds, or money in checking or savings accounts are included. Your home, one car, furniture, personal and household items, life insurance with a cash value of less than $1,500, a burial plot, and up to $1,500 set aside for burial expenses are not included.
Limits and restrictions vary from state to state. To find out if you qualify, call your local Medicaid office or State Health Insurance Programs (SHIP). Alabama, Arizona, Connecticut, Delaware, DC, Mississippi, New York, and Vermont do not apply asset limits.
There are four MSPs, each with slightly different requirements and types of coverage for your health care costs.
Qualified Medicare Beneficiary Program (QMB)
The income limit for QMB in 2020 is $1,061/month for individuals and $1,430/month for married couples. The resource limit is $7,730 for individuals and $11,600 for married couples.
- Helps pay for Medicare Part A and Part B premiums, deductibles, coinsurance, and co-payments.
- In 2019, gross monthly income limits were 100% of the Federal Poverty Level plus $20 (may vary depending on your state).
- When you qualify for the QMB, you automatically qualify for Extra Help assistance to pay for prescription drug coverage.
Qualified Individual Program (QI)
The income limit for QI in 2020 is $1,426 for individuals and $1,923 for married couples. The resource limit in 2020 is $7,730 for individuals and $11,600 for married couples.
- Helps pay Part B premiums if you have Part A and meet income and asset restrictions.
- When you start receiving QI aid, you may be reimbursed for your Part B premiums for up to three months before your QI Program effective date.
- QI assistance is awarded on a first-come, first-serve basis. Priority is given to people who got QI benefits the previous year.
- You must also reapply every year.
- QI benefits are not awarded to those who qualify for Medicaid.
- Income limits are slightly higher in Alaska and Hawaii.
- When you qualify for the QI Program, you automatically qualify for Extra Help assistance to pay for prescription drug coverage.
Specified Low-Income Medicare Beneficiary Program (SLMB)
The income limit for SLMB in 2020 is $1,269 for individuals and $1,711 for married couples. The resource limit in 2020 is $7,730 for individuals and $11,600 for married couples.
- Administered by individual states. Helps pay Medicare Part B premiums for people who have Medicare Part A and meet income and asset limitations.
- Receive reimbursement for up to three months of Part B premium payments from before your SLMB effective date.
- Slightly higher income limits in Alaska and Hawaii.
- When you qualify for the SLMB program, you automatically qualify for Extra Help assistance to pay for prescription drug coverage.
Qualified Disabled and Working Individuals Program (QDWI)
QDWI income limits in 2020 are $4,249/month for individuals and $5,722/month for married couples. The resource limits for QDWI in 2020 are $4,000 or less for individuals and $6,000 or less for married couples.
- Helps pay Part A premiums.
- You may be eligible for QDWI benefits if:
- You’re a working disabled person under 65
- You lost your premium-free Part A when you went back to work
- You aren’t getting medical assistance from your state (mainly Medicaid)
Applying for Medicare Savings Programs
When you apply for MSPs, you will apply for all of the MSPs (QMB, QI, SLMB, QDWI) at the same time through your state Medicaid program. Each state has a different application process because MSPs are tied directly to state-funded Medicaid.
When you apply for health insurance assistance, you may need legal documentation such as your Social Security Administration card, your Medicare card, your birth certificate (or passport/green card), and proof of your address and income. If you have qualifying assets and resources, you may need proof for those as well (bank statements, life insurance policies, stocks, etc.).
After you file an MSP application, you should receive a “Notice of Action” within 45 days to tell you whether or not you have been approved.
If your application is approved, you will be automatically enrolled in the program that most aligns with your qualifications. Your benefits begin on the month indicated on your Notice of Action (usually the following month).
What is the Extra Help Program for Medicare?
The Extra Help program, also called “LIS” or Low-Income Subsidies, is a program that helps qualifying Medicare beneficiaries afford their Part D prescription drug costs.
About Extra Help/Low-Income Subsidies (LIS)
Extra Help provides prescription drug plan assistance such as costs for Part D premiums up to a state-specific benchmark amount, as well as deductibles, coinsurance, and co-payments.
Extra Help also eliminates Part D late enrollment penalties you would have incurred if you held off signing up for Part D.
If you qualify for QMB, SLMB, or QI, you also automatically qualify for Low-Income Subsidies (LIS). If you’re already enrolled in Medicaid, Supplemental Security Income (SSI), or a Medicare Savings Program (MSP), you automatically qualify for Extra Help even if you don’t meet Extra Help’s eligibility requirements. If you don’t get any of these benefits, you can apply for Extra Help through the Social Security Administration either online or with a printed application.
You can qualify for full or partial Extra Help depending on your income level and assets. If you are denied Extra Help assistance, you have the right to appeal the decision.
There are several ways to apply for Extra Help:
- Print and mail form SSA-1020 to Social Security
- Call Social Security at 1-800-772-1213 (TTY 1-800-325-0778)
- Visit your local Social Security Office
What does Social Security Extra Help Pay For?
Extra Help can cover some of your prescription drug costs. The Medicare/Social Security Extra Help program is estimated to be worth about $5,000 per beneficiary. That’s because you could save about $5,000 in prescription drug costs by enrolling in Extra Help.
Medicare Costs in 2020
Let’s start with the Original Medicare program (parts A and B). If you qualify, you can get premium-free Part A Medicare. Most beneficiaries are still responsible for paying deductible and coinsurance costs.
You get free Part A premiums if you or your spouse worked and paid Medicare taxes for at least 40 quarters (10 years) during your working life, and you sign up for Part A during your IEP.
If you paid Medicare taxes for 30 to 39 quarters, your premium is $252 per month in 2020. If you worked and paid Medicare taxes for less than 30 quarters of your life, your premium will be $458 per month in 2020.
In 2020, the standard Part B premium is going up by about 7% to $144.60 due to increased program costs. The standard deductible is $198.
After you meet your deductible, you’ll pay 20% for most Medicare Part B services, other than preventative and wellness services.
If you have a high gross income, you could pay an Income-Related Monthly Adjustment Amount (IRMAA).
Now let’s look at costs for additional Medicare benefits.
Part D plan costs can range from $15 to $80 per month.
Two additional ways to save money on your prescription drugs are through mail-order deliveries and prescription savings cards. You can add to your monthly savings if you get in the habit of buying your prescription medications using these tools.
If you have Medicare but also have either Social Security benefits or Medicaid, your prescription coverage will still come from Medicare. You’ll need either Medicare Advantage with prescription coverage or a Part D plan.
Medigap plan costs vary from insurer to insurer but generally range from about $100 to $400 per month and will often depend on the carrier and the location.
Medigap providers typically use one of three methods to determine the pricing of their plans:
- Community-rated: Everybody pays the same rate each month per location regardless of their age.
- Issue-age-rated: You pay a premium based on the age you are when you sign up for the plan. The younger you are, the less you pay. Premiums may increase each year based on inflation, but they will increase as you age.
- Attained-age-rated: Your premium is based on your age at the time you enroll, and it increases every year based on your age and inflation.