To Watch a Short Video Presentation About Medicare Click Here

Medicare Basics

Medicare is a health insurance program for:

  • People age 65 or older
  • People under 65 with certain disabilities
  • People of all ages with End-Stage Renal Disease (kidney failure or transplant) or Lou Gehrig’s Disease

Medicare is made up of 3 parts:

Part A Hospital Insurance– Most people do not pay a premium for this as they have paid it through their payroll taxes while working. Medicare Part A covers inpatient care in hospitals, skilled nursing facilities (not long-term care), hospice care, and home health care.

Part B Medical Insurance –Most people pay a monthly premium for Part B which can change every year. Medicare Part B helps cover doctors and outpatient care, physical and occupational therapy, and some home health care. You can get a penalty if you do not take Part B when you are eligible, and you pay every month for the duration of your coverage.

Part D Prescription Drug Coverage-Most people will pay a monthly premium for this coverage which can change every year.  Part D helps lower prescription drug costs. Private insurance companies provide coverage. If you decide not to enroll in a drug plan when first eligible, you will pay a monthly penalty for the duration of the coverage.

Who is Eligible for Medicare?

Usually, you are eligible for Medicare if you or your spouse worked for at least 10 years at a job that paid into Medicare and you are 65 years old.

If you are not 65, you might also qualify for coverage if you have a disability or End- Stage Renal disease (kidney failure or transplant) or Lou Gehrig’s disease.

Guidelines:

You can get Part A at age 65 without paying a premium if:

  • You already get retirement benefits from Social Security or Railroad Retirement
  • You are eligible to get Social Security or Railroad benefits but have not filed for that yet
  • You or your spouse had Medicare-covered government employment

You can get Part A if you are under 65 without having a premium if:

  • You have received Social Security or Railroad Retirement
  • You are on disability for 24 months, have kidney dialysis or transplant, or have Lou Gehrig’s disease

Even though you don’t have to pay a premium for Part A under those conditions, you must pay for Part B (which can change every year). It will be deducted from your Social Security or Railroad Retirement check.  If you are not drawing those, Medicare will collect the premium for 3 months at a time.

Medicare Supplement (Medigap) Insurance

This is insurance sold by private insurance companies, that can help pay some of the health care costs that Original Medicare does not cover, such as co-payments, coinsurance, and deductibles.  This insurance “supplements” Original Medicare.  Original Medicare pays first and then the supplement pays its portion.  A Medigap plan is not the same as a Medicare Advantage plan. Medicare Advantage is a way to get Medicare benefits, but Medigap supplements your Original Medicare benefits.

What you should know about Medigap plans:

  1. You must have Medicare Part A and Part B.
  2. If you a Medicare Advantage Plan and wish to go back to Original Medicare with a supplement, first make sure you can leave the Advantage plan, then you can enroll in the Medigap plan before the policy begins.
  3. You pay a monthly premium to the private insurance company for your supplement, but you must also pay the Part B premium to Medicare.
  4. A medigap policy can only cover one person. If you and spouse want a Medigap plan, then you need to get 2 separate policies.
  5. You can get a supplement from any carrier licensed in your state to sell one.
  6. Any standard Medicare Supplement policy is guaranteed renewable, even if you have health issues. This means the insurance company can not cancel your Medigap policy as long as you pay the premium.
  7. Prescription Drugs are not covered in a Medigap policy, if you want drug coverage you will have to join a Medicare Prescription Drug Plan (Part D) offered by private insurance companies.
  8. It is illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you are switching back to Original Medicare.

Comparing Medicare Supplements

Medicare Supplement policies are the same across the US and must follow federal and state laws designed to protect you.  Insurance companies can only sell a “standardized” policy categorized in most states by letters.  (See the chart)  All policies offer the same basic benefits but some offer additional benefits, so you can choose which one meets your needs.  As you can see from the chart, there are many options to choose.  As licensed agents, we can help you understand these plans and choose the right plan for you.

Part D Prescription Drug Plans

These policies help cover prescription drug costs. You can sign up for Part D Prescription Drug Coverage 3 months before your 65th birthday.  If you do not enroll by 3 months after your 65th birthday, you will get a late enrollment penalty that you must pay every month for the duration of your drug coverage.  If you work passed your birthday and have credible coverage, you will not incur the late penalty, but you must enroll within 63 days of losing the credible coverage to avoid a penalty at that time.  The late enrollment penalty is calculated by taking 1% times the national average premium times the number of months you did not have coverage.

If you are already in a Part D stand-alone drug plan or a Medicare Advantage plan that includes drug coverage, you are able to switch plans during the annual enrollment period from Oct 15-Dec 7th each year.

How Does It Work?

Each year the drug coverage rules change, but they are based on the true out pocket cost or actual retail cost of the medicines. There are 4 stages:

  1. Deductible Stage– presently, during the deductible stage, if your plan has a deductible, you will pay the first $545 (2024) then move to the Initial Coverage Phase
  2. Initial Coverage Phase-presently, you pay copays until the retail cost gets up to $5030
  3. Coverage Gap (Donut Hole) Phase– then in the coverage gap phase, you will pay 25% of all medicines until your retail cost gets up to $8000
  4. Catastrophic Coverage Phase– finally in this stage you will pay $0 for all medications until Dec 31st.

How to choose a plan

It is vital to review your Part D coverage every year, especially if you are taking any new medicines.

You can start by looking on Medicare.gov   Enter your medicines and pharmacies to see all of the plan options.  You can see the monthly costs for each medicine and the differences in pharmacy.

Each plan has a preferred, standard, or out-of-network pharmacy.  Most plans have a mail-order option as well. They can vary drastically from plan to plan.

Contact us to check your medications for you, to make sure you are on the best-suited plan, and to explain any details you do not understand.  Then let us do the enrollment for you.

Individuals with low annual incomes may qualify for Extra Help from Medicare.  Extra help helps pay your Part D premiums and out-of-pocket drug costs.

Enroll using this link. https://www.ssa.gov/medicare/part-d-extra-help

Medicare Advantage Plans

Medicare Advantage Plans (Part C) are health plans from private insurance companies.  These plans generally cover all Medicare-covered healthcare and can include prescription drug coverage.  There are 4 types:

  • Medicare Health Maintenance Organization (HMO)
  • Preferred Provider Organization (PPO)
  • Private Fee-for-Service Plans
  • Medicare Special Needs Plans

These plans generally offer extra benefits and lower co-payments than on Original Medicare.  These are managed care plans that may require you to see doctors that belong to the plan or go to certain hospitals for services.

Generally, Medicare Advantage plans include benefits such as dental, vision, hearing, OTC (health care products) and gym membership, many plans offer more than this also.

There are special Medicare Advantage plans available specifically to honor the people that have served in our Military. These plans offer many additional benefits.

To join a Medicare Advantage Plan, you must have Medicare Part A and Part B.  You will need to continue to pay your monthly Part B premium to Medicare.  The standard Part B premium amount for 2024 is $174.70 (depending on your income).

When you can enroll

Medicare limits when you can join, switch or drop a Medicare Advantage Plan. You can join anytime beginning 3 months before the month of your 65th birthday and 3 months after the month you turned 65.

If you are on disability and have Social Security, you can join 3 months before to 3 months after month 25 of your disability.

You can switch or drop your Medicare Advantage plan during Annual Enrollment Period each year between Oct 15-December 7th.

Please contact us to go over all of your needs in detail and help you find a plan that fits you.