Medicare Facts to Know
Posted: January 13, 2017
If you’re focused on Medicare sales, you may think the close of the Medicare Annual Enrollment Period ends your sales opportunity for senior and Medicare-eligible prospects and clients. It didn’t, the Medicare Advantage Disenrollment Period (MADP) is about to begin.
45-Day Period to Act
Starting January 1st and continuing through February 14th, your prospects and clients who are currently enrolled in a Medicare Advantage plan can switch to Original Medicare. During this time, they can also add Medicare Prescription Drug (Part D) coverage, if they don’t already have it, or purchase a Medicare Supplement (Medigap) plan.
Effective Date of New Plan
If they dis-enroll from a Medicare Advantage plan, the first date of coverage for their Original Medicare plan is the first of the month following the date the disenrollment request is received. That means requests processed in January are effective February 1 and those received by the February 14 close of the MADP will have new Medicare coverage effective March 1.
What’s Original Medicare?
Original Medicare Part A covers inpatient hospital care, skilled nursing facility stays, some home health care visits, and hospice care. Part B covers physician visits, outpatient services, preventive services, and some home health care. Parts A and B are subject to deductibles and coinsurance. While Original Medicare provides some protection against the costs of health care services, it has relatively high deductibles and copays. There are no prescription benefits under Part A and Part B and no limit on out-of-pocket costs.
Contributions and Premiums
The amount your customers pay into Medicare varies. Most workers pay 1.45 percent of earnings into the Medicare system with a similar contribution by their employer. Self-employed works contribute 2.9 percent of their income. Those earning more than $200,000 individually or $250,000 as couple pay an additional 0.9 percent tax.
Premiums for Medicare Part A and Part B are modest for more enrollees. In fact, most people won’t pay a premium for Part A and pay a standard Part B premium of $134 (for 2017) if they don’t claim a Social Security benefit. In 2017, most Social Security recipients will pay $109 for Part B. Premiums are higher for retirees with an adjusted gross income of more than $85,000 (or $170,000 for a couple). Premiums for Part D plans and Medicare Advantage plans vary based on the selected coverage.
Many Medicare beneficiaries choose to add a Medicare Supplement (or Medigap plan), which can help take care of deductibles and coinsurance not covered by Original Medicare.
According to An Overview of Medicare published in 2016 by the Kaiser Family Foundation, Medicare Supplement insurance policies provide benefits to about 20 percent of traditional Medicare beneficiaries. That compares to about one-third of all those eligible for Medicare in 2015 who were enrolled in a Medicare Advantage plan, rather than Original Medicare.
Not All Doctors Accept Medicare
Medicare offers beneficiaries a lot of options, your clients (or your clients’ parents) who are about to enroll in Medicare may think they can see whatever doctor they want. However, that’s not the case. To find out whether a physician accepts Medicare, encourage your prospects and clients to check with their physician’s office to see if they accept Medicare. If a customer is considering a Medicare Advantage plan, he or she can visit the carrier website to find out if a preferred doctor is a plan participant.
No Coverage for Long Term Care
As an insurance professional, you probably already know that Medicare doesn’t pay for Long Term Care, but your prospects and clients may not know that. While Medicare Part A does cover medically necessary care in a skilled nursing facility, if the reason a person is sent to a facility is for assistance with what are called Activities of Daily Living (ADLs), the costs are not covered by Medicare. ADLs are basic self-care tasks like grooming, feeding, using the bathroom, dressing, walking, etc.
When Medicare was first established in 1966, there were 19 million people enrolled in the program. At the end of 2016, more than 56 million were expected to be enrolled in Medicare. With roughly 10,000 individuals “aging into” Medicare every day, the market for Medicare-related coverage continues to grow. That’s a lot of opportunity for you if you’re focused on the senior market − or if you’re considering an entry into Medicare sales.
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