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Medicare Basics and What’s New for 2021

medicare basics

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by Ellen Blake

Do you have questions about Medicare and what’s new for the coming year? You are not alone. The open enrollment period, which extends through December 7th, is a time insurance people tend to inundate us with pitches in our email, voicemail, text messages and even via snail mail. It’s overwhelming, especially if you plan to enroll for the first time.

Where to find reliable information

Medicare.gov is the official U.S. Government site for Medicare. Here, you can sign-up or change plans for Medicare, find local help, obtain forms compare plans and more. No matter where you are in your Medicare journey, you should find answers to most of your questions on this website.

5 Important facts to know for those not yet enrolled include:

  • Not everyone gets Medicare automatically. You may need to sign up if you are 65 or close to it, and do not get Social Security.
  • Be aware that there are specific times of the year when you can sign-up or change your coverage.
  • Avoid a penalty by signing up for Medicare Part B when you’re first eligible. 
  • Know you have choices about how you get your Medicare coverage
  • You may be eligible for help with your Medicare costs

MEDICARE EXPLAINED

Medicare has four parts. The federal government manages Parts A and B, referred to as the Original Medicare. Private health insurance companies with an approved Medicare contract offer Parts C and D. If you are already on Medicare, you know it doesn’t pay for everything. However, many people not yet enrolled think it does. Deductibles and copays apply and you need to prepare for these costs.

medicare basics

Part A: Hospital Insurance

  • Inpatient hospital care
  • Skilled nursing facility care
  • Hospice
  • Some home health care
  • $0 monthly premium for most people

A beneficiary can go to any provider that accepts Medicare with Part A. 

Part B: Medical Insurance 

  • Services from doctors and other health care providers
  • Outpatient care
  • Lab fees & X-rays
  • Durable medical equipment such as oxygen tanks or wheelchairs

As with Part A, the beneficiary can go to any doctor that accepts Medicare with Part B.

Part C: Medicare Advantage Plans

  • Private insurance companies with an approved Medicare contract offer Part C
  • Includes all benefits and services covered under Part A and Part B
  • Usually includes Medicare prescription drug coverage (Part D) as part of the plan
  • Often adds coverage for the Part A and B deductibles & coinsurance, routine hearing, vision exams and eyewear, hearing aid allowance, transportation, worldwide emergency coverage
  • An annual out-of-pocket maximum applies

Part C Plans may require you to use providers in the plan’s network.  If you’re in a Medicare Advantage Plan, your plan must give you at least the same coverage as Original Medicare. Some services may only be covered in certain settings or for patients with certain conditions.

medicare basics

Part D: Medicare Prescription Drug Coverage

  • Private insurance companies with an approved Medicare contract offer Part D
  • Individuals must purchase Part D in addition to Parts A and/or B benefits unless you have a Part C Medicare Advantage plan that covers the cost.
  • Helps lower  prescription drug costs and helps protect against higher costs in the future

Additionally, all Part D plans have a formulary, which is a list of drugs a plan covers.  Each plan has its own formulary, however, all plans must cover a wide range of prescription drugs that people with Medicare take, including most drugs in certain protected classes,” like drugs to treat cancer or HIV/AIDs. Many Medicare drug plans and Medicare health plans with drug coverage place drugs into different levels called “tiers” on their formularies. The lower the “tier”, the lower the cost of the medication. Compare plans to find which ones cover the drugs you take; no two Part D plans are alike and formularies for a specific plan can change from year to year.

Medigap

Private insurance companies also offer Medicare supplement plans, called Medigap. As the name implies, this type of policy helps fill “gaps” in original Medicare. It helps pay some of the health care costs such as copayments, coinsurance and deductibles.

New for 2021

Two important changes in Medicare that might affect you include:

  • Lower out-of-pocket costs for insulin. If the plan you choose participates in the “Part D Senior Savings Model,” the plan offers multiple types of insulin at a maximum copayment of $35 for a 30-day supply, a substantial savings. However, check details of your plan carefully, Oh says. The many different types of  
  • insulin available are not handled the same way across plans.
  • Unrestricted access to Medicare Advantage plans is available if you have end stage renal disease (ESRD),

Medicare coverage is based on three main factors.

a) Federal and state laws

b) National coverage decisions made by Medicare about whether something is covered.

c) Local coverage decisions made by companies that process claims for Medicare in each state. These companies decide whether something is medically necessary and is covered in their area.

How do you decide which plan is best for you?

Shop and compare Medicare plans on the Medicare.gov website. Get advice through State Health Insurance Assistance Programs or from an independent Medicare consultant. Don’t assume the plan you currently use is the best plan for you for the next year; Needs change and so do plans. Make sure you tailor your plan to your personal medical history.

It is helpful to talk with your doctor or other health care provider about the specific services or supplies you need. Find out if Medicare covers your item, service or supply.

Don’t forget to review the annual notice of changes sent about Medicare during open enrollment to stay abreast of updates.

One final piece of advice; plan ahead. It’s a good idea to begin to research plans two years before the first person in your household is eligible.

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