Turning 65 or retiring recently and switching to Medicare? Look no further!
Here we outline the basic parts of Original Medicare, how it started, and what it means to you.
Step 1: Throw out all the unbelievable amount of junk mail you've received stuffed in your mailbox.
Step 2: Curl up next to the fireplace and get ready for the reading experience of a mystery thriller paperback!
We get so many calls from people exhausted by the overwhelming information and options. So, let's get started on making this easier. First issue: when can you enroll and what steps do you need to take?
The two events which kick off Medicare health insurance typically are your 65th birthday and electing Medicare Part B.
Only one of these items requires you to do anything.
You have the 3 months before, your birthday month, & the 3 months after your 65th birthday to 'Elect Medicare Part B' and enroll in a Medicare Supplement. This gives you a total of 7 month window to enroll. So, for example, if your birthday is June 17th you have the 3 months before, the month of June, and the three months after June for election window.
If you wait until after that window to enroll health conditions may factor in your approval and you could be declined for Medicare Supplement coverage. The premiums will also rise for Medicare Part B with the Feds assigning a penalty.
But, the timing of enrollment really depends on your situation.
Main things that matter:
a) whether or not you are still working and enrolled on an Employer sponsored plan
b) what type of health insurance you have (employer vs. individual/family) and
c) if you are enrolled in Medicare Part A & B yet.
**Fast Fact** If you are already receiving benefits from Social Security then you'll automatically be enrolled in Medicare Part A & B upon turning age 65. This makes it really easy.
If you're "auto-enrolled" Medicare will send you your id cards 90 days before your 65th birthday and begin charging the Medicare Part B premiums the month you turn 65.
If you are not receiving Social Security benefits prior to age 65 you'll need to elect Medicare Part B, for Physician's Services, outpatient, lab/x-ray insurance etc.
You then just need to apply for your Medicare Supplement + Part D p lan OR your Medicare Advantage plan, a choice we'll get to shortly.
In the midst of the stack of junk mail the first thing to understand is that Medicare has two main options: 1) Original Medicare PPO & 2) Medicare Advantage.
ORIGINAL MEDICARE
What is Original Medicare?
Original Medicare was signed into effect in 1965 by President Lyndon Baines Johnson which also created Medicaid, the health insurance program for the poor. Shoutout LBJ! Medicare provides health insurance for senior Americans turning age 65 or qualified individuals under age 65 with permanent disabilities.
Who manages Medicare?
Medicare is administered by CMS, or Center for Medicare and Medicaid Services. CMS is part of DHS, or the federal U.S. Department of Health and Human Services. Just like Social Security, which it often gets mixed up with, Medicare is a federal government entitlement program.
Medicare coverage is broken into 4 Parts.
Righ now you're thinging...what are these Parts and what is covered by each Part? Let's go through it quickly. At the highest level they are:
MEDICARE PART A- Hospitalization Insurance
MEDICARE PART B- Physicians Office and Outpatient Insurance (office visits, lab, x-ray etc.)
MEDICARE PART C- Medicare Advantage plans
MEDICARE PART D- Prescription Drug Insurance
MEDICARE PART A- Hospital Insurance
- Hospital admissions, inpatient surgeries, etc..
- Skilled nursing facility care
- Hospice care
- Home health care
Seems like these things go together like lemonade and toothpaste, am I right? But, there is a common theme between them: all deal with facility care.
**Fast Fact** Medicare Part A= For most folks Medicare Part A Hospital Insurance does not have an additional premium once you turn age 65. If you've paid social security taxes into the system via w2 payroll for a minimum of 40 quarters over your lifetime and qualify for social security retirement income.
Medicare Part A is PPO Hospital coverage with a deductible and member cost sharing fees per day for inpatient stays for which you're responsible. Deductible means you have to pay a certain amount out of pocket prior to Medicare kicking in and helping you with the bill. We deliver good news: you can get the deductible paid for through a Medicare Supplement policy!
But, we'll get to that just a bit later.
MEDICARE PART B- Physicians Office and Outpatient Insurance (like office visits, lab, x-ray etc.)
The simple definition of Medicare Part B is medical insurance to cover you outside the hospital for Physicians Services, Lab & X-ray, supplies, & Urgent Care etc..
The formal Federal Guide to Medicare states Medicare Part B insurance covers:
Physicians office expenses and other health care professionals
• Outpatient care
• Home health care
• Durable medical equipment (beds, wheelchairs, walkers)
• Preventive Care Services (wellness check, screenings, shots and vaccines)
Really what you need to know is that Medicare Part B offers 80/20 PPO insurance coverage after a small deductible.
The difference now is that the Federal Government is covering 80% of the expense after small Part B deductible, with member or your private insurance supplement carrier insuring the 20% portion.
This keeps your Medicare Supplement premiums reasonable!
Ready to get started with some rates? Remember, the only thing free in this world is bad advice.
Run an instant Medicare Supplement Quote online here:
Or call us toll free to talk it through at 1-866-486-6551. Email: help@plansforhealth.com
Medicare Part B contains a separate premium. Here is a premium table estimate for Part B premiums only:
|
Yearly income in 2018 |
You pay premium each month (in 2020) |
||
|
File individual tax return |
File joint tax return |
|
|
|
$87,000 or less |
$174,000 or less |
|
$144.60 |
|
$87,000 to $109,000 |
$174,000 to $218,000 |
|
$202.40 |
|
$109,000 to $136,000 |
$218,000 to $272,000 |
|
$289.20 |
|
$136,000 to $163,000 |
$272,000 to $326,000 |
|
$376.00 |
|
$163,000 to $500,000 |
$326,000 to$750,000 |
|
$462.70 |
Not too bad right? Whew. That's a relief! Much better pricing likely vs. the plan you're on now. The regular individual & family plans or employer sponsored insurance for folks ages pre-65 which costs waaay more for this strength of coverage. You'd pay $1000+ monthly easily per person.
The formal federal Medicare.gov rate chart on Medicare Part B premiums is located here.
Do you have to enroll in Medicare Part B?
You don't have to enroll, but if you don't enroll when originally eligible there are consequences. For example..
Risk on Medical Expenses
Medicare Part B is 80/50 coinsurance coverage after a $198 deductible in 2020. That means when you visit a doctor, lab or x-ray, or have outpatient surgery you pay the first $198 and then 20% of the costs. But, that 20% is unlimited with no cap if there's no Medicare Supplement in place.
Penalties??
The other problem for delaying enrollment is the penalty on premiums.
The penalty for late enrollment in Medicare Part B is 10% per year times the number of years late. So, for example on an average Medicare Part B premium of $144, and you enrolled 5 years later the penalty would be 50%, or $144 * 50% increase = $216 monthly.
In other bad news, the 50% penalty increase on premiums lasts forever.
MEDICARE PART C- MEDICARE ADVANTAGE PLANS
Here's a riddle... how does Medicare A+B+D=C?
Medicare Advantage plans are an alternative path to Original PPO Medicare A&B.
Think of Medicare Advantage, sometimes called 'MA' plans you'll notice, as HMO plans you may have some experience with.
Medicare Advantage plans bundle Parts A Hospital, B Physicians Services, & D prescription into an all-in-one solution typically HMO based and managed privately by the insurance carrier.
Most plans require you stay in the insurance carrier plan's doctor network to get claims paid.
Can you go to any doctor you want?
No, the tradeoff for the low to zero monthly premium is you typically get assigned a primary care doctor and medical group where you receive your treatment. Some plans also offer access in addition to the insurance carrier PPO network.
Many Medicare Advantage Plans offer additional benefits such as vision, dental, & hearing coverage.
Does it control out of pocket costs better? Definitely maybe. Medicare Advantage plans tout an annual max out of pocket on medical expenses. So, your risk is "capped" if you will.
But, the Medicare Supplements cover the Part A Hospital deductibles and daily costs sharing fees, as well as the 20% coinsurance for Part B Physicians Services. There's technically no 'annual max' out of pocket but you'd be really hard put to find a way to have huge medical expenses with a strategy of Original Medicare PPO+ Supplement.
Also, the max out of pocket on a Medicare Advantage plan can easily reach the $4,000-$5000 range or more.
One trip to the hospital or emergency room visit any any premium savings is quickly lost.
In a nutshell Medicare Advantage means to you:
- primary care doctor and medical group assignment
- HMO model with a referral to specialist typically needed beyond OBGYN or Dermatology
- lack of out of network coverage
- Medicare Parts A, B, & D bundled together
- member medical expense cost sharing up to an annual out of pocket maximum
- low to zero monthly premiums
- additional benefits like dental, vision, and hearing sometimes added
Want help? No problem!
Run an instant Medicare Supplement Quote online here:
Or call us toll free at 1-866-486-6551. Email: help@plansforhealth.com
Really with Medicare Advantage you pay less in monthly premiums but risk usually between $2,000-$7,000 in medical expenses if you have a big bill.
**Fast Fact** Medicare Advantage plans do not allow supplements to be purchased to give additional benefits.
MEDICARE PART D- Prescription Drug Coverage
The most recent major Part of Medicare is prescription drug coverage Part D. Medicare beneficiaries can enroll in prescription drug insurance separately from the health insurance plan.
**Fast Fact** Can you believe Medicare did not contain coverage for prescription drugs until January 1st 2006 when President George W. Bush signed the Medicare Modernization Acit law into effect provided by private insurers?
This Act is generally known as the "MMA." Uh no, not that MMA.
Medicare Part D is designed to help pay the cost of prescription drugs which includes shots and vaccines.
Do you have enroll in Medicare Part D?
You don't have to do anything. It's still America. But, it'll cost you if you put if off and wait. If you wait to enroll from your initial eligibility and don't have Employer sponsored group coverage you will have to pay a penalty.
How much are the penalties?
Medicare defines the penalty as "1% of the "national base beneficiary premium" ($32.74 in 2020) times the number of full, uncovered months you didn't have Part D or creditable coverage."
Uh, say what? What this means in general is you'll have to pay 1% of the average part D plan times the number of months you delayed.
Sounds bad, but in reality here's an example if you were to enroll 2 years late:
1% * 24 months * $32.74= $7.86 penalty amount
Total premium is then $40.60 monthly which is a 24% increase forever. Not the end of the world so don't worry, but don't delay!
Why pay more when you don't have to?
Part D plans are run by private insurance companies that follow rules set by Medicare. The Federal government does not actually manage the care or claims.
How do you make payments? Here's your options for payment:
Medicare can take the premiums right out of your Social Security check if you want. Or there are multiple options for billing payments similar to any other insurance plan.
If you've lost your id card simply create your online member account at www.mymedicare.gov or give them a call at
1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048.
WHAT IF YOU'RE TRAVELLING OR ON VACATION?
What about covered when on vacation or travelling? Are you covered by Medicare when travelling outside the state or the country?
Let's say you've finally taken that ski trip to Aspen but you break a leg and get airlifted to a hospital in Colorado. Are you covered?
Original Medicare covers you across the United States no problem: same as if you were sitting at home.
Original Medicare + supplement offers the largest PPO provider network in the country!
But, when leaving the U.S., Medicare does not provide coverage. You may be able to purchase a Medicare Supplement with some travel coverage to help. Consider travel medical plans when leaving the country.
Medicare Advantage plans
If you get a bundled Medicare Advantage plan will travel coverage be better?
In short, no. Medicare Advantage Plans do NOT cover you outside the United States, or typically outside the plan's doctor network for that matter in the U.S.
There are specific travel medical policies you can purchase which will cover you for a short period like the duration of a week or two. These are not Medicare policies. Travel policies also have the option of long term travel coverage insurance cover which can last over the course of a year if there are multiple trips or sometimes lengthy stays for work or pleasure.
For more information on IMG Travel Medical insurance or pricing check here:
Or call us at 1-866-486-6551 or Email.
Where can you find contact at CMS or Social Security to check your Part A, Part B enrollment status?
A great place to start is www.medicare.gov. You can register a member account, apply online for Part B, or give them a call and get questions answered if you have a trickier case.
Once you are ready to apply for Medicare Part B give us a call at 1-866-486-6551 or email to choose the rest of your plan options.
Complicated Areas?
Some areas where you may need to directly contact CMS or Social Security to enroll or apply:
-naturalized citizen or permanent resident over age 65
-worked less than 40 quarters of w2 payroll over your lifetime
-foreign national status
-you or your spouse are still employed and enrolled on employer sponsored group insurance
-you are on a retirement health insurance program
-VA military coverage is in place, or TRICARE
Let's say you moved to the U.S. recently, and don't qualify based on number of w2 payroll quarters worked, are you just out of luck and uninsured?
NO! You can purchase Medicare or 'buy in' to the program.
Costs of the Medicare 'buy-in' program?
If you worked less than 30 w2 payroll quarters it's $458 per month for Part A, and $252 if you worked between $30-39 w2 payroll quarters.
Then the standard Part B costs apply.
But there are scenarios when you may not pay anything such as permanent disability status, under 65 and receiving Social Security or Railroad retirement benefits, or have ESRD End Stage Renal Disease.
Want help? No problem!
Run an instant Medicare Supplement Quote online here:
Or call us toll free at 1-866-486-6551. Email: help@plansforhealth.com