Are You New To Medicare?
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A 6-Step Educational Program for Individuals Turning 65.
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Soon You’ll Qualify For Medicare
For some, it will mean remaining on employer coverage. For many, it will mean enrolling into Medicare as well as a Medicare Insurance Plan. Whatever your plans may be, patience and reparation are the keys for a smooth transition to the next phase of your life. This guide can help you get organized and better understand your choices, so you can make well-informed decisions that work best for your lifestyle.
1. What Medicare Covers
2. What Medicare Doesn’t Cover
3. How To Apply
4. Your Options
5. Medicare Supplement
6. Medicare Advantage
HOW TO APPLY
Generally, if you have worked AND paid at least 10 years of Medicare taxes, then you will automatically get Part A premium-free when you turn 65. If you have applied for Social Security and/or have been disabled for 24 consecutive months, then you will be automatically enrolled into Part B as well. If you do not meet these criteria, then check below to see how to apply for Part A or B.
If you are not getting Part A automatically, then it is likely for one of the following reasons:
- If you haven’t worked at least 10 years (being paid “under the table” can cause this, too).
- You don’t have a “green card” (permanent residence card) for at least 5 years.
- You don’t have citizenship, a qualifying visa, or lawful status.
- You are under 65 and have been diagnosed with ESRD (End-Stage Renal Disease).
Even with these exceptions it’s likely that you may qualify for Medicare, but you would need to manually apply for Part A. To be certain if you qualify you will need to contact Social Security. They can inform you if you fit any of the exceptions above, and enroll you into Medicare. Know that if you do not qualify for premium-free Part A, then you may be subject to pay a premium of up to $458.00 per month. Social Security will be able to confirm your eligibility.
The most common examples of having to manually apply are:
- If you are turning 65, but not yet filing for Social Security.
- If you are under 65, and have been diagnosed with ESRD (End-Stage Renal Disease).
- If you have employer coverage, you may not be automatically enrolled into Medicare Part B as long as your employer coverage remains active. If your employer plan is considered ‘creditable coverage’, it may be an option to delay adding Part B. You’ll want to confirm with your employer’s HR department.
- If you have coverage through the Veterans Affairs (VA), then you may not be automatically enrolled into Part B for much of the same reasons as having employer coverage.
Part B has a premium of $144.60 per month (or more if your annual income is over 87k. There is a penalty if you do not apply for Part B when you are first eligible; it is waived if you have ‘creditable coverage’ (i.e. employer coverage or VA coverage).
What Does Medicare Cover?
What You Pay For:
- $1,408 deductible for days 1-60 following inpatient hospitalization.
- Days 61-90: $352 co-pay per day
- Days 91 and beyond: $704 co-pay per day after day 90 for up to 60 days over your lifetime.
Home Health Care
- $0 for medically necessary home health care services.
- 20% of the Medicare-approved amount for durable medical equipment (DME).
- $0 for hospice care.
Mental Health Inpatient Stay
- Mental inpatient hospitalization is treated the same as medical hospital.
Skilled Nursing Facility Stay
- Days 1–20: $0 for each benefit period.
- Days 21–100: $176 co-pay per day of each benefit period.
- Days 101 and beyond: All costs.
What You Pay For:
Part B annual deductible:
You pay $198 per year in 2020 for your Part B deductible. After your deductible is met, you typically pay 20% of the Medicare-approved amount for the following:
- Most doctor services
- Outpatient therapy
- Durable medical equipment (DME)
- Clinical laboratory services: You pay $0 for Medicare-approved services.
Outpatient mental health services:
- You pay nothing for your yearly depression screening.
- 20% of the Medicare-approved amount for visits to your doctor or other health care provider to diagnose or treat your condition.
Outpatient hospital services (Emergency Room):
- You usually pay 20% of the Medicare approved amount for the doctor, hospital, or other health care provider’s services.
What Doesn’t Medicare Cover?
There are many benefits not covered by Original Medicare. Here, we are only going over the most popular topics that come up.
Non-Medical Home Health – Original Medicare will not cover any home health services that are not medically necessary. This includes having someone help you with bathing, going to the bathroom, cleaning the house, shopping, or any other service that can fall under assisted living. This would also include any nursing homes or assisted living facilities. To get coverage for these services you have to pay out-of-pocket, have a long-term health policy, or have Medi-Cal.
Ancillary Services – There are many services considered “extra” that aren’t covered under Original Medicare. These include, but are not limited to:
- Most dental care, including dentures, cleanings, fillings, dental plates, extractions, and checkups
- Hearing aids
- Routine foot care
- Eye exams, prescription glasses, and lenses
Coverage for these services can often be covered as an add on to a Medicare Advantage plan or a Medigap plan.
Part D – Original Medicare does not include prescription drug coverage. Any pharmacy filled medications will require prescription drug coverage to be purchased individually or fulfilled as part of a Medicare Advantage plan.
Medicare requires you to have prescription drug coverage; otherwise, you’re subject to pay a penalty when you do enroll at a later date.
Your Options – Easy As 1, 2, 3
1) The Bare Necessities
The first of your three main Medicare options; this is when you have Original Medicare (Part A & B) and a Prescription Drug Plan (Part D). Monthly costs will typically be your Part B premium $144.60 per month and the premium for a standalone Drug Plan $35 per month = national average. Since you will generally pay 20% coinsurance for most services, this option is likely to have the highest out-of-pocket costs. While there is no bad option, both of the following two options are set up to lower your copays & coinsurances and may also include extra services not covered by Original Medicare.
2) The Upgrade
We are simply taking “The Bare Necessities” and adding a Medicare Supplement (aka Medigap) plan. A Medigap is a private company that simply supplements your Original Medicare by picking up some or all of your deductibles, copays, and coinsurances. “The Upgrade” comes with an additional premium ranging $40-150 per month for a Medigap plan as a 65 year old. These plans are often age-rated, meaning: as you get older the monthly premium will also increase. For this reason, individual budgets should be considered.
3) The All-Inclusive Package
A Medicare Advantage plan (aka Part C) is a private company that manages your Medicare benefits and often lowers your shares of cost. Advantage plans have comparably low or even $0 monthly premiums, and many offer Part D coverage at no additional monthly premium. They also include a maximum out-of-pocket limit – effectively providing a safety net on your annual costs for emergencies – and often cover additional services that Original Medicare doesn’t, including glasses and eye exams, hearing aids, over-the-counter medications, gym benefits, and more. These additional benefits vary by plan
What you need to know about “The Upgrade”
The goal of Medicare Supplement plans (aka Medigap) is to provide peace of mind through predictable, lower shares of cost than what you would experience under Original Medicare alone. You must have both Part A and Part B to purchase a Supplement plan. You may use your Medicare card and your Supplement card across the nation with any provider that accepts Medicare.
Monthly Premiums for these plans can range from as low as $40 up to $150 per month for a 65-year-old. There are various types of Medigap plans in which private insurance companies may choose to offer. They are standardized, which means the coverage level for a given plan will be the same across any company; however, the rates will vary. Below is a chart of the various plans (and their coverage levels) that each private company may choose to offer.
These plans will cover only one person, so your spouse must have his/her own individual policy. The good news is that many offer household discounts if two or more people enroll in Medicare Supplement plans from the same insurance company.
Don’t Forget! Medicare Supplement plans do not cover services like dental, glasses, transportation, hear- ing aids, and more. Some plans may cover these services at an extra cost or as part of a special version of the plan. If you are looking for an option that includes these additional benefits at low to no extra cost, then a Medicare Advantage plan may be a suitable option for you.
Medicare Supplement plans do not include Part D coverage. If you elect for “The Upgrade,” be sure to also purchase a standalone Prescription Drug Plan to cover your medications and avoid paying a Part D penalty.
What you need to know about the “All Inclusive Package”
A Medicare Advantage Plan (aka Medicare Part C) is simply a Medicare approved private insurance company that manages your Medicare benefits. Essentially, Part C combines Part A, Part B and many times Part D as well as other necessary medical services a person may require such as hearing, dental and vision.
Many of the Original Medicare deductibles and coinsurances are lowered or even eliminated. For example, your hospital deductible will often be replaced for a flat co-pay per day for the first few days of hospitalization. Because Medicare Advantage plans often include prescription drug coverage, you avoid all Medicare penalties and receive a comprehensive benefit package that is reasonable and attractive for those who may not be able to afford a Medicare Supplement plan.
There are a few rules to follow before you can receive coverage through a Medicare Advantage Plan. The rules are simple…Your primary doctor is responsible for obtaining approval for referrals to specialists and select medical services like surgeries and medical equipment.
That’s it. This is because most are structured as an HMO, which means you will have to wait for an approved referral before you can make an appointment for the new doctor or service. If you try to use the service or see the specialist without the authorization (approval for payment), then you would be on the hook to pay for the entire bill. With that said, there are processes for urgent matters to allow same day and/or next-day approval for services, or even waive approvals entirely for emergency services. If a procedure or referral is needed ASAP, then it’s possible to get you care ASAP.
It is important that all of your doctors are contracted with the same Medical Group to ensure continuity of care (a medical phrase meaning to continue all current doctors and services). To find out which Medical Group all of your doctors accept, you may either call each doctor individually or contact us to help you through it. Each Medical Group only works with certain Health Plans. Because of these selective partnerships, there may be Health Plans with great benefits that would not be available to you because they unfortunately do not contract with your doctor’s Medical Group. Therefore, it is important to find out which Medical Groups your doctors work with before comparing Health Plans.
The good news is that you have access to great benefits with reasonable rules!
Part D – Prescription Drug Coverage
You can get Part D coverage through two common avenues: either as a standalone Prescription Drug Plan (PDP) or as part of a Medicare Advantage Plan (MAPD). The standalone option will cost you a monthly premium and will often include a deductible, while most Medicare Advantage plans include the Part D coverage at no extra premium and with no deductible.
To sign up for a standalone Prescription Drug plan (PDP), you need to be enrolled in Part A and/or Part B. Even if you aren’t currently taking any drugs, we recommend signing up for a PDP or MAPD to avoid any future penalties.
Keep in mind that every Part D Plan has its own list of covered drugs. This list is called a “formulary.” The formulary will tell you which medications are covered, how much you’ll pay out-of-pocket, and if there are any special rules for a particular drug. Before enrolling in a plan, you should ensure that all or most of your drugs are covered.
Your plan’s formulary may also change annually, in which you will receive an “Annual Notice of Change” letter from your plan provider. For this reason, we recommend doing a review of your drug coverage during the Annual Enrollment Period every year to confirm all your medications are covered for the upcoming year and that you won’t have any surprises when paying for your prescriptions.
Turning 65 Checklist
6 Months Before You Turn 65
- Begin researching the Medicare plans and options available in your area. Begin narrowing down which coverage options are most important to you based on your needs and budget.
- Schedule an Initial Appointment with your Medicare Insurance Agent. Your Agent will guide your discovery of which option best fits your lifestyle and help direct you towards next steps.
- Schedule your appointment today: 1-877-651-7526 TTY: 711.
3 Months Before You Turn 65
- Enroll in Original Medicare (Parts A and B).
- Begin finalizing your choice of additional Medicare insurance coverage.
- Schedule a Follow-up Appointment with your Medicare Insurance Agent. Your Agent will analyze your choice of plan type and ensure that your doctors, medications and other important benefits are covered.
- Schedule your appointment today: 1-877-651-7526 TTY: 711.
Your 65th Birthday Month
- Your Original Medicare (Parts A and B) should be effective on the first of the month as well as the plan you chose for additional Medicare insurance coverage.
- Receive your Medicare card and additional plan card in the mail.
3 Months After You Turn 65
- Your deadline for enrolling into Original Medicare (Parts A and B) and any additional Medicare insurance coverage is at the end of this month. If you miss it, you may be charged a late enrollment penalty.
- Schedule your appointment today. 1-877-651-7526 TTY: 711.
Frequently Asked Questions
Can I sign up for Medicare online?
Yes! Save time from having to drive and wait at the Social Security online or wait on hold for a representative by phone. Once submitted online, someone at Social Security will review your application and call you to confirm any additional information needed or if anything seems incorrect.
What is the Medicare Enrollment Period?
For most, you can enroll into Medicare as early as 3 months before your birth month. So, if your birthday is May 15th, then you can apply as early as February 1st. This enrollment period will extend until 3 months after your birth month. In the May 15th birthday example, you would have until August 31st to apply for Medicare. Important Note: if you are keeping employer coverage, then you will be able to apply for Medicare once you leave the employer coverage and will have two months from the date your coverage ends (please check with your employer’s HR department that you have ‘Creditable Coverage’).
Can I enroll in both Medicare Supplement & Medicare Advantage?
No. Medicare Supplement only pays as a secondary to Original Medicare. Once you enroll in a Medicare Advantage plan, your Original Medicare will be managed by that private company. Therefore, a Medicare Supplement will no longer pay as a secondary insurer. Besides, you only need one plan or the other.
What is my Medicare Eligibility?
Eligibility for Medicare is determined by meeting at least 1 of the following qualifications:
- You are 65 years of age or older
- You have been disabled and receiving SSDI for 24 consecutive months
- You have ALS (Lou Gehrig’s Disease)
- You have ESRD (End-Stage Renal Disease)
How do I choose which Medicare Advantage Plan is best for me?
The biggest misconception when choosing a Medicare Advantage plan is that there is a one-size-fits-all plan. The first mistake people when they move forward with that misconception is to compare benefits first. Not all doctors accept all Medicare Advantage plans in their respective county. Furthermore, Medicare Advantage plans have different formularies for prescription drug coverage. For this reason, we recommend starting with identifying which plans are accepted by your doctors, then which of those plans cover all or most of your medications. Once you’ve narrowed it down, compare coverages and benefits of the remaining plans to select the plan best fit for your needs.
This process can be tedious and stressful at times, but people will often choose a plan primarily because of its benefits and neglect to consider what we mentioned above, then have hurdles to climb when they’re not able to see a specialist or are asked to pay out-of-pocket for a medication. It helps to part- ner with a Medicare Insurance Agent to do this leg work for you AND help you understand your options once they have been narrowed down, so you can confidently choose a plan that works for you.