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Financial Education for Everyone

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October 5, 2012

For senior citizens, the most important decision you will make this fall comes in the form of choosing the most appropriate Medicare coverage options for next year.

Medicare's 2013 open enrollment period runs from October 15 to December 7, 2012. For most current enrollees, that's the only time to make coverage changes for the coming calendar year (exceptions are made if you later move outside your plan's service area, qualify for financial assistance or a few other situations).

Several changes to Medicare take effect in 2013, including:

  • Medicare Part D participants who reach the so-called doughnut hole coverage gap will begin receiving a 52.5 percent discount on brand-name prescription drugs and a 21 percent discount on generics, compared to 2012's 50/14 percent rates.
  • Medicare will begin covering additional preventive and screening services, including assessments and counseling for depression, alcohol misuse, cardiovascular disease and obesity.
  • A redesigned Medicare Summary Notice, which explains what your doctor/ provider billed for, the Medicare-approved amount, what Medicare paid, and what you must pay.

Medicare also recently overhauled its website (www.medicare.gov), adding many new features and simplifying the language and site navigation. For example:

  • The homepage now provides direct links for common tasks like applying for Medicare, changing plans, calculating costs, researching what different plans cover and more.
  • Search for whether a specific test, item or service is covered under Original Medicare (Parts A and B).
  • Quick links to replace a lost Medicare card, find a Medicare Advantage (Part C) or prescription drug plan (Part D).
  • Find doctors and other health professionals, nursing homes, hospitals, home health services and health/drug plans, and make side-by-side comparisons of costs and care provided.
  • It can be accessed on mobile devises like tablets and smartphones, so you can seek information anywhere, anytime.

Briefly, Medicare provides health care benefits to people age 65 and older and those under 65 with certain disabilities or end-stage renal disease. For most people, the initial enrollment period is the seven-month period that begins three months before the month they turn 65. If you miss that window, you may enroll for the first time between January 1 and March 31 each year, although your coverage won't begin until July 1. To apply for Medicare online, visit www.ssa.gov/medicareonly.

Medicare plans and coverage options include:

  • Part A – helps cover inpatient hospital, skilled nursing facility, hospice and home health care services.
  • Part B – helps cover doctor's services, outpatient care and some preventive services. It's optional and has a monthly premium.
  • Part C (Medicare Advantage) – offers plans run by Medicare-approved private insurers as alternatives to Original Medicare. Most cover prescription drugs and some include extra benefits at additional cost. You're usually required to use the plan's provider network.
  • Part D – helps cover the cost of prescription drugs. It's optional and carries a monthly premium. These privately run plans vary widely in terms of cost, copayments and deductibles and medications covered.

Some people also purchase additional Medigap (Medicare Supplemental) insurance offered by private insurers. It follows strict government coverage guidelines and helps pay for many items not covered by Medicare, including deductibles, copayments and coinsurance.

Understanding and choosing the right Medicare options can be complicated and time-consuming. For assistance, call 1-800-633-4227 or read "Medicare & You," a highly detailed guide that explains Medicare in easy-to-understand language – it's found at www.medicare.gov.


This article is intended to provide general information and should not be considered health, legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.