Don't Be Intimidated by Medicare Labyrinth of Letters
Humberto Cruz

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After applying online at www.socialsecurity.gov, I got a letter from the government saying I was entitled to Medicare Parts A and B as of Aug. 1, the first day of the month I turn 65.

I decided not to get Part C and to wait on Part D.

I wanted a private Plan J, which my wife, Georgina, got last year, to plug in the gaps in Medicare Parts A and B. But you can't get Plan J - or E, H or I - anymore, although people who already have them can keep them. I signed up for the newly revised Plan F, which is very similar to the old J.

If you got lost in this labyrinth of letters, I offer a primer on Medicare plans along with suggestions to make an informed choice:

Medicare has four parts: Part A or hospital insurance; Part B or medical insurance, covering doctors' services and supplies; Part C or Medicare Advantage plans, and Part D for prescription drug plans.

Part A, which is free for the vast majority of Americans, and Part B, which currently charges a monthly premium of $110.50 for most people, provide the basic foundation of health insurance for Americans 65 and over.

But you'll want more. Medicare Part A has large deductibles (for example, $1,100 for a hospital stay of 60 days or less). Medicare Part B has no cap on out-of-pocket costs after Medicare pays 80 percent of approved expenses. Once the annual $155 Part B deductible is met, "Medicare will pay 80 percent of a $500 bill or 80 percent of a $500,000 bill, and you owe the rest,'' noted David Lodge, an insurance agent in Vero Beach, Fla.

That's why an estimated 89 percent of people on Medicare buy additional insurance, such as a Medicare Advantage plan or a Medicare Supplement plan (also known as Medigap) and Part D prescription drug plan.

Medicare Advantage plans are offered by private companies approved by Medicare. Besides services included in Medicare Parts A and B, they usually offer additional coverage, including vision, dental and prescription drugs. Each plan is free to set premiums, out-of-pocket costs and rules for how you get services, such as needing a referral to see a specialist or having to go to doctors and hospitals in the plan's network.

Based on the features and costs of the plans available where I live, I opted for a Medicare Supplement Plan rather than a Medicare Advantage Plan that would restrict my choice of doctors. This is a personal decision and not an endorsement of one type of plan over the other.

Medicare Supplement plans, which you also buy from private insurance companies, include Plans A, B, C, D, F, G, K. L, M and N (for details, go to www.Medicare.gov). While coverage is standardized for each type of plan (Massachusetts, Minnesota and Wisconsin have their own plans) premiums for identical coverage can vary significantly among insurance companies. When comparing features and prices, consider not only the premium but also any deductibles, co-pays and coverage limits.

Plan A is the most basic and Plan F the most comprehensive. I preferred Plan F although the premium is higher ($162.50 a month for the company I chose compared to $117.75 for Plan A). I'll wait on purchasing a Part D prescription drug plan because I take no medications and can apply without penalties up to three months after my birthday. This is yet another complex decision worth a column when the time comes.

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