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Your Financial Future

Medicare Maze

To sort out the information and make the right choices, start when you’re 64

Does Medicare cover Medicare-induced headaches?

I’ve just spent more than two hours reading documents that are supposed to help me understand the system that I need to sign up for later this year, and really, before I can even start writing about it, I need to take a walk to clear my head.

OK. That’s a little better, but I still feel overwhelmed and undereducated, and I’ve written about Medicare before.

Certainly I know the basics. Medicare Part A is basic hospital care, and it’s free. Medicare B is insurance for doctor visits and other outpatient care, and it costs money, with higher premiums charged to people who have relatively high earned income. Medicare D covers drugs. Wait—what happened to C?

Part C, it turns out, is a seldom used name for the Medicare Advantage Plans. I found that out by flipping back and forth in the 123-page “Medicare & You 2010,” the official primer published by Medicare. Advantage plans are offered by private companies approved by Medicare and, I quote here, “will provide all of your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. In all plan types, you are always covered for emergency and urgent care. Medicare Advantage Plans must cover all of the services that Original Medicare covers except hospice care. Original Medicare covers hospice care even if you are in a Medicare Advantage Plan.”

See what I mean?

Then there are medigap plans, insurance you may buy to cover things like copayments and deductibles under Medicare, as well as services that Medicare doesn’t cover, such as an emergency room visit when you’re on vacation outside the United States. There is an alphabet soup of different gap plans to choose from, including—new this year—Plans M and N. Anyone wanting Plan E, H, I or J will have to move fast—as of June 1, they’ll no longer be offered.

It’s not that I didn’t learn anything from my cramming. I found “Medicare & You” to be full of information that was, for the most part, clearly explained. It’s just that you need to know so much. Even on a day in which I’m treating learning about it as my full-time job, I feel daunted.

Timing is everything

I did find out what I need to know about timing. Three months before the month in which I turn 65 (that birthday that will make me eligible for Part A), I should contact Medicare. I have seven months counting from that first contact to make decisions about Part B and Part D without penalties. But if I want the two to start concurrently, I should sign up for B sooner rather than later.

If you wait until your birthday, or later, to begin signing up, the decisions and paperwork will be even more oppressive.

I also looked at the Medicare website. It took me a while to find the page with information about medigap plans available in my area. And once I got there, I felt lost again. There is information on 13 different plans, some of which will be discontinued later this year. The chart gives a range of premium costs and lists which benefits each provides. But under the category “Estimated Annual Cost for People Like You,” i.e., your out-of-pocket expenses on top of premiums, it says “Information Not Available.” Isn’t that something I need to make an informed choice?

Once you check on one of the plans, you are provided with a box that lists insurance companies offering that particular choice in your area.

It’s clear to me that I’m going to need more help. I feel like a first-time driver given a car and a key and no further instructions.

I wanted to make sure I wasn’t overlooking some easy, obvious way of sorting this out, so I called Vicki Gottlich, a senior policy attorney at the Center for Medicare Advocacy Inc. She said, no, I wasn’t missing anything: “It’s a very complicated decision, and people don’t realize how complicated it is.”

Finding more help

So where to get help? Each state and the District of Columbia have a state health insurance assistance program—they’re known as SHIPs, one of many abbreviations you’ll do well to learn. But, Gottlich pointed out, “there aren’t enough SHIP counselors in the country to help everyone who needs it.” You can also try aging and disability resource centers in their areas.

The ultimate decisions, said Gottlich, are highly personalized: “So much depends on where you live, whether you continue to work, whether you want to continue seeing the same doctors, whether you are the type of retiree who spends part of the year in D.C. and part in Arizona.” Add to that questions of what your health care needs are now and what they’re likely to become. Still another consideration is how well you tolerate financial risk. Would you rather pay higher premiums now and have less risk going forward, or vice versa?

Here’s my advice: Don’t wait till three months before that 65th birthday month to think about Medicare. Start no later than your 64th. Get a copy of “Medicare & You” online or by calling 1-800-MEDICARE and take your time reading and absorbing it. Start a discussion early with one of the local resource agencies mentioned above. Or you can reach a real human being at Medicare itself—call the toll-free Medicare line above and say the word “agent.”

And don’t forget the AARP website, one of the best sources around for information on Medicare. Have a question? Check the Q&As already posted in the Bulletin’s Ask Ms. Medicare archive. If the answer you’re looking for isn’t there, you can ask your own. There’s a human being at the end of that line, too.

These are important decisions, and you need to get them right.

Martha M. Hamilton writes a regular column for Bulletin Today on retirement and financial issues.

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