There are four different types of Medicare coverage.
- Medicare Part A covers Hospital charges and requires no premium.
- Medicare Part B covers doctors’ bills and other medical care, but is optional coverage that requires a monthly premium.
- Medicare Part C (sometimes called Medicare Advantage) refers to plans offered by private insurers that you may choose in lieu of traditional Medicare benefits. Most Part C plans require a premium, and if you enroll in Part C, you waive your rights to benefits from Medicare Parts A and B.
- Medicare Part D refers to coverage for prescription drugs offered by private insurers. Part D plans work in conjunction with your traditional Medicare benefits (Parts A and B) and typically require a monthly premium.
Medicare Part A – Inpatient Hospital Coverage
Enrollment in Part A is no longer automatic because eligibility for Medicare occurs at age 65, while the Social Security retirement age is no longer 65. If you and/or your spouse are not enrolled in Medicare Part A when Medicare is primary, under its COB rules the Plan will pay benefits as if you had received benefits from Medicare. You and your spouse are strongly encouraged to enroll for Medicare Part A when each of you reach age 65, even if you are still working and have Earned Active Eligibility under the Plan.
We suggest that you contact Medicare at least three months before your 65th birthday to begin the enrollment process. This will eliminate the possibility that you could be subject to benefit reductions for Hospital charges after your Earned Active Eligibility ends and you become eligible for Senior Performers, COBRA or Earned Inactive Eligibility. Remember, there is no premium for Part A.
Medicare Part B – Outpatient Medical Coverage
Enrollment in Part B is not automatic. You must apply and pay a monthly premium, and you may only enroll during a defined enrollment period. Because Part B requires a premium, you may choose not to enroll until Medicare becomes your primary plan, which is when your Earned Active Eligibility ends and you become eligible for Senior Performers, COBRA or Earned Inactive Eligibility. However, if you wait too long, there will be a gap before Medicare begins. If this happens, the Plan will pay benefits under its COB rules as if you had received benefits from Medicare. To avoid a coverage reduction, contact both the Plan and Medicare to make sure that you enroll as soon as your Earned Active Eligibility ends. We suggest that you contact Medicare at least three months before your 65th birthday.
Medicare Part C – Alternative Private Coverage
Medicare Part C, also called Medicare Advantage, is an option that Medicare beneficiaries can choose as an alternative to traditional Medicare benefits (Parts A and B) and sometimes Part D coverage. There are many different Medicare Advantage plans available nationwide, and some plans require monthly premiums while others do not. However, all Medicare Part C plans are administered through private insurers and require enrollees to waive their traditional Medicare benefits.
Medicare Part D – Private Prescription Drug Coverage
Prescription drug coverage is available through Medicare Part D plans offered by private insurers, and most Part D plans require a premium. You may enroll in a Part D plan when you become eligible for Medicare, or during the annual open enrollment period from October 15 through December 7. Visit www.medicare.gov for dates and other information about Medicare’s annual open enrollment period.
Unlike Parts A and B, you may decide not to enroll in a Medicare Part D plan. If you choose to enroll in a Part D plan, you will not be eligible for the prescription drug benefits included with the Plan’s Senior Performers, COBRA, Earned Inactive Eligibility or Surviving Dependent coverage.
The prescription drug benefits offered under the Plan are considered “creditable coverage.” This means they are comparable to the standard Medicare drug benefits, except under very limited circumstances.
There are three possible situations in which you may be better off enrolling in a Medicare Part D plan.
- People with limited resources – Medicare includes special provisions for those with limited income and resources. The special provisions may allow you to receive Medicare prescription drug benefits with no premium and low or no Deductibles and Copays. If you think you may qualify, contact the Social Security Administration or complete their worksheet found on their website (www.ssa.gov).
- COBRA Participants – If you are currently enrolled in COBRA Continuation Coverage and are also Medicare-eligible, it is possible that, with the monthly premiums and prescription drug Deductible and Copays, you may pay more for the Plan’s coverage than through a Medicare Part D plan plus Medicare’s Hospital and medical benefits. Keep in mind that if you decide to enroll in a Medicare Part D plan and stop paying your COBRA premiums, you will have no coverage – Hospital, medical, prescription drug or dental – under the Plan. You cannot drop just the prescription drug benefits and retain the other Plan coverage. Also, if you terminate your COBRA Continuation Coverage, you will not be able to regain coverage unless you requalify for Earned Eligibility.
- Medicare HMO Participants – If you are enrolled in a Medicare HMO, that plan may have automatically enrolled you in their Medicare Part D plan. The HMO may not allow you to drop just the prescription drug coverage without dropping the Hospital and medical coverage as well.
When making your decision to enroll, you should compare the Plan’s coverage, including what medications are covered, with the coverage and cost of the Medicare Part D plans available in your area.
If you enroll in a Medicare Part D plan and you later drop that coverage, you can receive prescription drug coverage from the Plan again, provided you are still eligible for coverage. In such a case, your prescription drug coverage under the Plan will be effective the first of the month after your Medicare Part D coverage ends.
If you are eligible for Medicare, the Plan will annually mail you a Notice of Creditable Coverage. This notice is also available upon request by calling the Plan. The notice will advise you that the Plan’s prescription drug coverage is, on average, comparable to the standard Medicare prescription drug coverage. Keep this notice, as you will need a copy of it if you lose coverage under the Plan and you want to enroll in a Part D plan without paying a higher premium.