It may be early August but it’s never too soon for individuals 65 and older to begin considering what kind of Medicare supplemental and/or drug plans you may want to purchase to help reduce the costs of healthcare. The annual enrollment period for 2015 begins on October 15 and runs through December 7, 2014. This is called the Annual Coordinated Election Period.
If you become eligible for Medicare outside the Annual Coordinated Election Period, you have a seven month window around your birthday when you turn 65. You are eligible the three months prior to your birthday month and the three months after your birthday month. Coverage will begin the first day of your birthday month or on the first day of the month after the month you join. In Oregon you may purchase a supplement on the day of your birthday.
Medicare Part A: Covers inpatient care in hospital, hospice and nursing home and home health care (but not long term care). Free for most.
Part B: Covers doctor’s visits, tests and other outpatient care. Charges a premium.
Part C: Medicare Advantage plans let private companies offer both Part A and Part B benefits with fewer out-of-pocket costs than original Medicare. Many charge a premium on top of the Part B premium.
Part D: Prescription drug coverage purchased from a private company.
Medigap: Supplemental insurance from private companies that covers the deductibles and co-insurance not paid by original Medicare. Plans run from A to N.
Open enrollment: The only period during which beneficiaries may change Advantage plans or opt in or out of original Medicare. Medigap coverage may be purchased any time.
Doughnut hole: A gap in prescription drug benefits. In 2015, Part D enrollees will pay a monthly premium and may, depending on the plan, pay a deductible on prescriptions. Once any deductible is met, they pay copayments or co-insurance for their drugs until total drug spending – what the plan pays and what the enrollee pays combined – reaches $2,970 for the year. Then the enrollee pays 47.5 percent of the cost of brand-name drugs and 79 percent of the cost of generics until total out-of-pocket expenses for the year reach $4,750. After that, the enrollee reaches catastrophic coverage and pays only a small portion of drug costs, either 5 percent or copayments of $2.65 for generics and $6.60 for brands, whichever is more.