Medicare made easy
You’re turning 65 in a few months. Your mailbox starts filling up with advertisements about Medicare supplements, Medicare drug coverage, and Medicare Advantage plans. Your phone is suddenly ringing off the hook with solicitors who want to sell you new health insurance products. You haven’t entered the Twilight Zone … you’re just becoming eligible for Medicare.
But what is Medicare, you may ask. How do I get it? What does it cover? And do I need additional coverage to go with it? All valid questions.
What is Medicare?
Medicare is a federal health insurance program primarily for people age 65 and older, but it also covers people under the age of 65 with certain medical disabilities or diseases.
You’re automatically eligible for Medicare at age 65 if:
You are a U.S. citizen or a permanent legal resident who has lived in the United States for at least five years; and
You or your spouse has worked long enough to be eligible for Social Security benefits – usually having earned 40 credits from about 10 years of work – even if you are not yet receiving these benefits.
How do I enroll in Medicare?
If you’re already drawing your Social Security benefits, you’ll automatically get Medicare Part A and Part B starting the first day of the month you turn 65. (If your birthday is on the first day of the month, Part A and Part B will start the first day of the prior month.) Medicare Part A is hospital insurance (facility charges) and Part B is medical insurance (covers the people who provide your care).
You’ll receive your Medicare ID card in the mail three months prior to your 65th birthday. If you do nothing, you’ll keep Part B and will have to pay Part B premiums. You can choose not to keep Part B, but if you decide you want Part B later, you may have to wait to enroll and pay a penalty for as long as you have Part B.
If you aren’t getting benefits from Social Security at least four months before you turn 65, it’s your responsibility to sign up for Medicare Part A and/or B by contacting Social Security. You have seven months to enroll in Medicare, starting 3 months prior to your 65th birthday month and ending 3 months after your birthday month. But it’s best to sign up well before your birthday month to avoid delays in coverage.
To enroll in Medicare:
Apply online at https://SSA.gov/benefits/medicare
Visit your local Social Security office, or
Call Social Security at 1-800-772-1213.
Should I get Part B?
If you or your spouse is still working and you have health coverage through that employer or union, contact your employer or union benefits administrator to find out how your coverage works with Medicare. As a general rule of thumb, if the employer group health plan covers 20 or more employees, you may be able to delay taking Part B – with no penalty – until the employee retires. The employer group health plan will remain your primary insurance and Medicare Part A will be your secondary insurance. If the employer group health plan covers less than 20 employees, you’ll probably need to take Part B when you’re first eligible for it to avoid lapses in coverage and late enrollment penalties. In this case, Medicare will be your primary insurance, and the employer group health plan will be your secondary insurance.
What does Medicare cover?
Medicare Part A
Medicare Part A is hospital insurance that helps covers the facility charges when you are in a hospital or skilled nursing facility, as well as covers most of the cost for hospice care and home health care. As long as you or your spouse has worked and paid Medicare taxes for at least 40 quarters, you won’t pay a premium for Part A.
If you’re admitted to a hospital or skilled nursing facility, you’ll be responsible for paying a deductible of $1,408 for each hospital benefit period in 2020. Generally, a hospital benefit period starts the day you are admitted to the hospital and ends after you’ve been out of the hospital for 60 continuous days. Once you’ve paid your Part A deductible, you pay $0 for days 1-60 of a hospital benefit period. However, if you’re in the hospital for an extended period of time, you would pay $352 per day for days 61-90. For days 91 and beyond, you would pay $704 per each “lifetime reserve day” you use to extend a hospital benefit period. You are allotted 60 lifetime reserve days over your lifetime. After your lifetime reserve days are used up, you would pay all costs for days 91 and beyond of an extended hospital stay.
Please note: These deductible and copay amounts may be adjusted each year.
Medicare Part B
Medicare Part B is medical insurance that helps pay for the people (doctors and nurses) who provide your care, diagnostic tests, ambulance, outpatient services, preventive services, and more. The standard Part B premium amount is $144.60 per month (or higher, depending on your income).
You’ll pay an annual Part B deductible of $198 in 2020. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you’re a hospital inpatient), outpatient therapy, and durable medical equipment.
Do I need additional coverage to go with Medicare?
Medicare doesn’t cover everything. For example, Medicare Parts A and B don’t cover most prescription drugs, dental care, routine vision care and eyeglasses, hearing aids, or long-term care in a nursing home. And Medicare’s deductibles and copays can add up rather quickly if you need surgery or have a medical emergency. So most people choose to add other coverage to their Medicare Part A and Part B benefits.
You have two paths to choose from when adding onto your Medicare benefits. You choose to add Medicare Part D prescription drug coverage and a Medicare Supplemental insurance policy, or you can choose a Medicare Part C (Medicare Advantage) plan.
Medicare Part D
Medicare Part D is prescription drug coverage that you can purchase from a private insurance company that contracts with Medicare. You can buy Part D as a stand-alone prescription drug plan or as part of a Medicare Part C (Medicare Advantage) health plan. Part D monthly premiums vary by plan.
If your income is above a certain limit, you’ll pay an income-related monthly adjustment amount in addition to your plan premium.
If your income is below a certain amount, you may qualify for the Extra Help program that helps pay your Part D premiums and lowers your drug copays.
If you don’t enroll in Medicare Part D when you are first eligible, and you don’t have other prescription drug coverage, you may pay a late enrollment penalty when you do enroll in Part D.
You get an initial enrollment period to join a Medicare Part D plan that is seven months long and begins three months prior to your 65th birthday month. You also get an Annual Enrollment Period from October 15 – December 7 each year when you can switch plans for the upcoming calendar year.
Medicare Supplemental Insurance (Medigap)
Medicare Supplemental insurance, also known as Medigap, can be purchased from private insurance companies to help fill the “gaps” in Medicare. There are 10 standard Medigap plans. Medigap plans named with the same letter have identical benefits regardless which company offers it. Medigap plans help pay some or all of Medicare’s deductibles and copays for you, as well as extending your hospital coverage by an additional 365 days.
You get one Medigap Open Enrollment Period in your lifetime. This enrollment period starts on the first day of the month in which you are both age 65 or older and enrolled in Medicare Part B and lasts for 6 months. During your Medigap Open Enrollment Period, you can join any Medigap plan available in your area with no health questions asked. After your Medigap Open Enrollment Period expires, you can still apply for a Medigap plan at any time, but the insurance company is not obligated to accept you, and if they do, they can charge you a higher premium based on your health status.
Medicare Part C (Medicare Advantage plans)
A Medicare Advantage plan (like an HMO or PPO) is another way to get your Medicare coverage. Medicare Advantage plans, sometimes called Part C, are offered by Medicare-approved private companies that must follow rules set by Medicare. If you join a Medicare Advantage plan, you’ll still have Medicare, but you’ll get your Medicare Part A and Part B coverage from the Medicare Advantage plan, not Original Medicare. In most cases, you’ll need to use health care providers who participate in the plan’s network.
In addition to covering your Medicare Part A and Part B benefits, most Medicare Advantage plans also provide your Part D prescription drug coverage. And they may include extra benefits as well, such as dental, vision, hearing aids, and free gym memberships.
You get an initial enrollment period to join a Medicare Advantage plan that is seven months long and begins three months prior to your 65th birthday month. You also get an Annual Enrollment Period from October 15 – December 7 each year when you can switch plans for the upcoming calendar year. If you join a Medicare Advantage plan, you don’t need a Medigap plan.
Need help making a decision? Give me a call at 989-684-2772. My office hours are 9am-5pm, Monday – Friday.