BGA Insurance Helps Seniors Plan Correctly & Optimally for their Retirement
Are you or anyone you know retiring or turning 65? There are some important things you will need to keep in mind when it comes time to plan health coverage. Following is a guide to the most important considerations for planning your healthcare coverage.
Whether you opt for the Medigap plan or the Medicare Advantage plan for your medicare insurance, you will need to have both Medicare Part A and the Medicare Part B in functioning order before you can apply for coverage.
The hospital portion of the Medicare is covered by Part A. Here you will find coverage for all expenses in the hospital, including the bed you are lying in and maintenance for the building, hospice, home care and the indispensable staff of skilled nurses.
The Medical coverage is found in the Medicare Part B portion. This portion provides coverage for blood work, radiology, ambulance, cat scans, rehabilitation services, outpatient procedures, x-rays, mental health, emergency room, MRI’s, surgeries and doctors and specialists care.
Your Medicare Advantage options can be found in the Medicare Part C portion.
The coverage for prescription medications are found in the Medicare Part D portion.
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IEP The IEP, or Initial Enrollment Period
This period marks the first day that you are eligible for the Medicare program and can enroll. It begins three months prior to your 65th birth month, continues through your birth month and ends three months after the month you were born. Throughout this period you have the option to enroll in a stand-alone version of the Medicare Part D plan. This is also the best time to enroll in the Medicare program as you will avoid certain costly penalties.
ICEP – The Initial Coverage Election Period
This is when you enroll for both the Medicare Part A and the Medicare Part B portions of the program as soon as you are eligible. There is a monthly premium required for the Medicare Part B portion of the program, and you will have the option to discontinue it during the Initial Enrollment Period. Some people may choose not elect the Part B plan if they are stilt receiving coverage from a previous employer’s plan that is still in effect.
It is possible to join the Medicare Part B portion at a date that is more convenient, for example the General Enrollment Period, between Jan 1 and March 31, in which case the Initial Coverage Election Period will be delayed until this date. When it comes time to enroll, the Initial Coverage Election Period will begin three months before the Part B portion of Medicare goes into effect, and will end three months after the date of your eligibility.
If you are receiving disability benefits from Social Security, or in the case of disability benefits through the other retirement facilities, your Medicare coverage will begin on the 25th month you receive your benefit receipt. The Initial coverage Election Period will begin three months before the date your Medicare Part A and Medicare Part B coverage can take effect and will terminate three months after the date of the month of eligibility.
GEP, also Known as the General Enrollment Period
This is the time for those Medicare Beneficiaries that chose not to enroll in the Part B portion when first eligible for Medicare but now want to take advantage and enroll in the Part B coverage during this fine General Enrollment Period, which will run through January to the 1st of March each year. Enrollment is effective from the 1st of July of the same year.
Medicare recipients who have delayed their enrollment in the Part B portion of the Medicare coverage will be issued a slight penalty on their Part B monthly premium. The penalty is the equivalent of for every full year the enrollment is delayed and remains for as long as the beneficiary continues his or her Part B portion of Medicare Coverage.
SEP, the Special Enrollment Period
This period is in place to allow certain beneficiaries another chance at enrollment or change enrollment when outside of the established AEP, GEP or the MAPD. This could be applicable to someone who has left the state and thereby lost their creditable coverage sources.
MAPD or the Medicare Advantage Disenrollment Period
The Medicare Advantage Disenrollment Period, extends from the first of January to the 14th of February each year. Any changes submitted during this period will be reflected on the first of the next month. During the Medicare Advantage Enrollment Period, you can make changes only if you have the Medicare Private insurance health plans also known as a Medicare Advantage plan.
With this option, you can drop or add the prescription medication coverage if you are switching over to the Original Medicare Plan. In other words, if you decide to leave your Medicare Advantage Enrollment Plan, you will need to select Original Medicare as your plan with an additional Part D portion to cover prescription medication. You also have the option of joining a Medigap plan. If you are on Original Medicare coverage, you will not be able to make any changes to your plan at this time.
AEP (The AEP) or the Annual Enrollment Period for Medicare advantage Plans
This is also called the Medicare Part C coverage portion, and enrollment in the Medicare prescription drug plan is a specific Annual Election Period in which beneficiaries can join, adjust or drop out of their Medicare Plans. The AEP runs from October 15th to December 7th of every year. All changes and enrollments will go into effect the following year on the first of January.
Medigap Plans are also referred to as Medicare Supplement Plans
If you choose Original Medicare as your primary source of health coverage you will also be given the opportunity to purchase additional supplemental coverage to pay the “gap” that your current plan wont cover. Basically, you can count on your Part A and Part B of Original Medicare to cover about 80% of all your hospitalization expenses, doctors, ER costs, and anything else you will consider medically necessary to your recovery. Most Medigap Plans will cover the remaining 20%.
Choosing the Best Coverage Options for your prescription coverage can be confusing and possibly expensive if not the right plan for your situation. Following are a few choice pointers to keep in mind when making this decision. Remember there are professionals who can help you make the best decision for you in each situation.
Some of the plans have a deductible of $0 and therefore will not pay the full cost of your prescriptions. In some cases for other Part D plans you will expect to pay the full cost of your prescriptions out of pocket until it reaches the deductible limit, this could be $50, $250 or even $400 depending on the plan you choose.
Initial Coverage Limit
Once you have reached your deductible limit, your expenses after this point will be shared by between you and your Medicare Part D provider. The shared cost is combined up till the amount of $3700- Medicare will pay up to 75% of this cost and you will be left to pay the remaining 25%.
The coverage gap, also called a “donut hole,” begins when you meet your Medicare Part D plants coverage limit of $3700 and ends if you are required to pay more than $4950* The participant can the receive a 60% discount on the total cost of on any name brand medications needed in the “donut hole”.
The 50% discount here is provided by the manufacturers of these drugs and will be applied to help the participant out of their donut hole. The final 10% here is paid by your Medicare prescription plan and does not truly count as a discount to out of pocket expenses.
Let’s take a look at the following example, if you were to reach the donut hole and need certain brand name medications that cost $100, you will need to pay $40. You will also receive credit in the amount of $90 toward reaching your total 2017 donut hole price for your full out of pocket expenditures for this year.
Remember that enrollees are still required to pay the amount of 51% of co-pay on any generic drugs they may have purchases during the coverage gap, in other words a 49% discount from the full price.
Catastrophic coverage portion of the Part D structure is after you reach the donut hole maximum of your out of pocket costs, during this time Medicare will cover 95% of the costs and you will be responsible for only 5% for the remaining year.
BGA Insurance Group will help you select the right plan for you, at the right time in your life.
We help seniors in the following locations, and have offices nearby:
- Pennsylvania (Philadelphia area)
- New Jersey
- Conshohocken, PA (office)
- Cherry Hill, NJ (office)
- Allentown, PA (office)
Learn more about other specific areas of retirement planning: