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Medicare is the coverage provided by the United States Government for our Senior Citizens, defined as persons 65 years of age or older. The cost of Medicare is dependent on the number of quarters a person has worked and thus contributed to the system.

To be eligible, an employee or their dependent must be 65 and have
signed up for this coverage at their local Medicare office. Medicare has a wonderful web site to assist employees by answering questions that they may have concerning this coverage.

It is imperative that you also understand the basics of Medicare. Two items have changed the face of the corporate landscape as it relates to Medicare. On January 1, 2006, the Medicare system began to offer coverage for prescription drugs, a primary reason many employees continued to work past age 65. At this point it would be advantageous for employees over the age of 65 to consider Medicare as an option rather than the company's group benefits.

The Medicare system can be extremely confusing. The Braden Benefit Strategies' staff understands the Medicare basics and can explain the difference between Part A and Part B. We know which carriers offer this coverage. Additionally, we understand Medicare Part D and Medicare Advantage Plans can help your workforce make informed decisions.

Understanding Medicare - The Short Version

Recent changes in the Medicare System, the new Medicare Part D, retirement planning and aging parents have made it necessary for all of us to understand at least a simplified version of the Medicare System. Here is the easiest way we know to explain the benefits:

• Medicare Part A: This coverage pays for hospitalization after a deductible of $1,100 per occurrence in 2010.

• Medicare Part B: After a $155 annual deductible, this coverage pays for doctor's visits and other medically necessary tests and procedures at 80/20 co-insurance, meaning you pay 20% and Medicare pays 80%.

• Medicare Advantage: In certain metropolitan areas, insurance carriers have agreed to cover individuals qualifying for Medicare with an HMO type product. You would agree to sign over your Medicare Part A & B payments to the insurance company in exchange for care. There could and most likely would be a premium charge for this insurance coverage. However, it is thought to be much more comprehensive coverage than Medicare A & B.

• Medicare Part D: This coverage pays for prescription drugs for Medicare eligible individuals. Insurance companies administer the coverage; you purchase the coverage you desire based on the offering of the insurance company. Insurance company prescription drug coverage has to be approved by the government in each state.
  
  Note: If you elect not to take Part D coverage, should you sign up for coverage later you will pay a 1% penalty.
  
  Companies with group insurance for employees or their spouses who are Medicare eligible or offer retirees continued health care benefits must determine if their prescription drug coverage meets the government standards (creditable) for Medicare drug coverage. If the employer's plan is determined to be creditable, employees will not be penalized should they leave the corporate plan and move to an individual Part D plan, provided there is no break in the time you leave one plan and begin the next plan.
  
  Remember, to be eligible for Medicare, you or your spouse must have worked a total of 40 quarters in a job that paid into the Medicare system.