Demystifying Medicare

Nancy Abbott
By Nancy Abbott June 15, 2009 11:43

Welcome to the baffling world of Medicare: federal health insurance for those who are 65 and older, or disabled. It covers primary medical care and folks can get supplemental policies to cover costs and also can enroll in a prescription drug insurance plan.

The giant program has been around for more than 40 years, and an estimated 40 million Americans are enrolled in Medicare – yet its complexity is often bewildering for the layperson. One misconception: Medicare means free health care. In fact, you may pay premiums, deductibles and co-pays, which increase each year, and certain services may not be covered at all. It’s a puzzle with a million pieces – but you don’t have to figure it out alone.

Once you’ve enrolled in Medicare through the Social Security Administration, free help is available from Area 12 Agency on Aging, through its Sonora-based Health Insurance Counseling and Advocacy Program (HICAP).

Program manager Debbie Shally oversees a staff of 17 people, including 14 trained volunteers, all dedicated to guiding clients through the Medicare maze from eligibility to plan selection, bills and claims. Area 12 also serves clients in Alpine, Amador, Calaveras, and Mariposa counties. Part of a nationwide program, HICAP has helped 5,300 Tuolumne County clients over the past three years, according to Shally.

If you’re about to turn 65, expect to be inundated with mailings from insurance companies, each advertising their plan as the best. The question becomes, “Which one is best for me?”

Private services and companies offer Medicare counseling with a fee, but HICAP offers such counseling free of charge. “We’re here to educate people, with unbiased and comprehensive information, so that they can make an educated and informed choice,” says HICAP counselor Patty Clevenger.

Tom Cornett, 66, of Sonora, struggled with the Medicare puzzle when he neared 65. The problem wasn’t that the information was hard to understand, but that there was so much of it, he says. He immersed himself in research, reading about the program and running the numbers on various options. He then visited HICAP to double-check his decisions.

When he embarked on the Medicare journey, “I was dreading the whole thing,” says Cornett, a former electrical contractor and Columbia State Historic Park concessionaire. “You have to be proactive or have someone like HICAP to look out for you.”

What’s best for you is as individual as your fingerprint, Shally says. “Clients often come in and say, My neighbor said this is the best plan and I got it, but it’s costing me three times as much as hers,” she notes. “That’s where the fingerprint comes in.”

Shally and her staff conduct a personalized assessment of your Medicare needs. A third or more of their clients are new beneficiaries, while the rest are established clients, typically with problems relating to prescription drug coverage and issues with Medicare.

Eligibility guidelines

Most people qualify for Medicare when they turn 65, according to Patricia Nicasio, Social Security public affairs specialist. You qualify if you’re eligible for Social Security benefits, or may qualify on a spouse’s (including divorced spouse’s) record. If you’ve been getting Social Security disability benefits for 24 months, you qualify for Medicare. You may also qualify if you suffer from certain catastrophic diseases.

Shally notes that, although you enroll in Medicare through the Social Security Administration, Medicare and Social Security benefits are “two different ball games.”

Everyone who has worked – or whose spouse has worked – for at least 10 years full time (40 or more quarters in Medicare-covered employment) is eligible to receive Medicare. If you don’t meet these requirements, you can still get Medicare Part A coverage (hospitalization insurance) by paying monthly premiums.

Enrolling in Medicare

If you are already getting Social Security benefits, you’ll automatically be enrolled in Medicare Parts A and B. However, because you must pay a premium for Part B coverage, you have the option of turning it down. You will be contacted by mail a few months before you become eligible and given the necessary information.

If you are not already getting Social Security benefits when you turn 65, call Social Security at 1 (800) 772-1213 three months prior to your birthday, says Nicasio. There’s a seven-month Medicare enrollment window, from three months before your 65th birthday, the month of your birthday, and three months after.

You don’t have to be retired to enroll in Medicare. You or your spouse could still be working at 65 and covered by employer health insurance and get Part A, for free. Whether you’re working or not when you turn 65, if you have no health insurance coverage, you need to enroll.

It pays to be proactive: not enrolling during this time can mean a 10 percent premium penalty for each year you were eligible for Part B but did not enroll – and you’ll have to pay the increased premiums forever.

Parts of the Puzzle: A and B

Medicare Parts A and B have been around since the beginning and together are sometimes referred to as original Medicare. Shally outlines the Medicare ABCs and D as follows:

For Part A, hospitalization insurance, you pay no premiums if eligible, but there are deductibles and copayments. It covers approved costs for inpatient care, including psychiatric hospitalization. It also provides limited coverage of care in a certified skilled nursing facility, and home health care, including home health aides, medical social services and hospice. One-time enrollment at age 65.

Part B covers medical services: Doctor visits, lab services, medical equipment (i.e., wheelchairs) and more. One-time enrollment at age 65, or January-March, effective July of same year; premiums of $96.40 per month for most income levels.

If you’ve retired and signed up to receive Social Security benefits early, say at age 62, as  Cornett did, you’re automatically enrolled to Medicare Parts A and B starting the first day of the month you turn 65. You’re in the pipeline and typically don’t need to do anything to enroll.

If you’re still working, you may want to postpone Part B, as you would have to pay the monthly premium (close to $1,200 a year for 2009) for coverage you already have through your employer’s group plan.

Annual Part B enrollment is January through March, with coverage becoming effective in July of the same year. If you’ve lost the health benefits a job gave you, special Part B enrollment periods apply.

To help cover deductibles and co-pays, and provide more predictable costs, some people buy supplemental insurance policies, known as “Medigap.” These plans help cover costs related to Medicare Part A and Part B coverage. Cost varies greatly.

Healthy all his life, Cornett decided to buy a supplemental policy “just in case” and ended up having both knees replaced. Citing his great policy and local health care providers, he only spent a few hundred dollars out-of-pocket.

Medicare Advantage Plans: Part C

Medicare Advantage Plans, also known as Part C, include HMOs, PPOs and Private Fee-For-Service plans, which each have their own rules and regulations. Premiums vary, and only certain plan types are offered in our area, Shally says. Medicare Advantage Plans often involve “networks” – you have to see doctors who belong to the plan – and may require referrals to see specialists. But in many cases, buying a Medicare Advantage Plan means lower co-pays and deductibles.

Not everyone is happy with Medicare Advantage, Shally says. Sometimes, patients see their doctors under a Medicare Advantage plan and after treatment the doctor doesn’t like how, when or what he or she was paid – and decides not to accept that insurance in the future.

Part D

Part D’s prescription drug benefit is also offered through private health care companies. Plans and premiums vary. Enrollment is from November 15-December 31 each year, and coverage takes effect the following January.

These private insurance plans offer prescription drug coverage with co-pays until expenditures top $2,700 – at which point there’s a coverage gap, the so-called “donut hole.” Beneficiaries are responsible for their full medication costs until the “catastrophic” threshold of $4,350 is reached, after which Part D coverage resumes. Beneficiaries may be eligible for other programs that help with gap payments until that level is reached, Shally says.

Although Part D works well for many people, it’s recommended you reassess every year – which many people don’t realize – and coverage can change drastically from year to year. Questions about Part D account for most visits to HICAP, Shally says.

“If the congressional members would have had to go home and explain this to their moms and dads,” she says, “it would never have passed.”

Medicare drug plans cover generic and brand-name drugs, and all plans have a “formulary” – a list of drugs covered by the plan. By reviewing your medications and comparing plans, the HICAP counselors can help you find the most beneficial plan.

Unlike many seniors, Cornett’s situation is simple. He now takes just one inexpensive prescription drug, but thought it prudent to sign up for Part D when he became eligible though he was not taking any prescription drugs at the time. The reason was to avoid future 1 percent monthly premium penalties assessed for every month you were eligible for Part D coverage, but didn’t sign up. The lesson: To avoid surprises in the future, make an appointment with HICAP to decode Medicare complications.

Medicare beneficiaries with very limited income and resources are eligible for extra help with prescription costs, according to Nicasio. Applications are available online at, or by calling HICAP at 1 (800) 434-0222.

Make appointments early

Late September into early October is a busy time for Medicare beneficiaries as the Part D annual reenrollment period nears. Shally recommends clients call early to make HICAP appointments for November and December. In September her counselors begin to contact existing clients – more than 1,000 in all – to schedule appointments.

“Medicare has a life of its own,” says Shally, who emphasizes no Medicare problem is too large or too small to bring to HICAP. Some questions can be answered by phone or call for an in-person appointment.

Daughters and sons who have questions on their senior parents’ behalf are welcome. Shally often shows computer-savvy baby boomers how to help mom or dad register on the online site,, for access to claim and benefit information.

Says Shally: “Even if we don’t know an answer, we tell our client, I’m not sure, but I’ll find out and get back with you.”

Medicare Resources

Enrollment information

Social Security Administration, 1 (800) 772-1213. Website: Sonora office, serving Tuolumne and Calaveras counties, 1194 N. Highway 49, 532-5101, 9am-4pm Monday-Friday. For the deaf or hard of hearing, call Social Security’s TTY number, 1 (800) 325-0778, from 7am-7pm Monday-Friday.

Counselor assistance

Health Insurance Counseling and Advocacy Program (HICAP), within Area 12 Agency on Aging, 19074 Standard Road, Suite A, Standard. 532-6272, or 1 (800) 434-0222. Office hours: 8am-noon and 1-5pm Monday-Friday. Email:

General information

U.S. Department of Health and Human Services, Medicare information line, 24 hours a day, 7 days a week. Live help at 1-800-MEDICARE (800-633-4227), or visit the website for information and to log onto

© 2009, Friends and Neighbors Magazine

Nancy Abbott
By Nancy Abbott June 15, 2009 11:43
Write a comment

No Comments

No Comments Yet

Let me tell you a sad story. There are no comments yet, but yours can be the first!

Write a comment
View comments

Write a comment

Your e-mail address will not be published.
Required fields are marked*