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What is Medicare?
Medicare is a federal health insurance program that is offered by the federal government for those who are either turning 65 or older, under the age of 65 with certain qualifying health conditions, have Lou Gehrig’s Disease (ALS), or diagnosed with end stage disease (ERSD), which is permanent kidney failure requiring dialysis or a transplant. The Centers for Medicare and Medicaid Services (CMS) is the federal agency that oversees the federal health insurance program. Since they run the Medicare program, everything goes through CMS when someone is looking to choose their Medicare benefits.
Medicare only has two options
When someone is eligible for Medicare, they will have the choice to get their health insurance coverage either through Original Medicare, which is directly from the federal government, or from a Medicare Advantage Part C plan, which is offered by private insurance companies. Someone cannot have Original Medicare Part A and B and a Medicare Advantage Part C plan; they must choose one or the other.
Who is eligible for Medicare?
Here are the requirements needed to be eligible to receive Medicare Part A and/or B.
o Age 65 or older,
o ESRD, or
o Lou Gehrig’s disease or ALS.
Age 65 or older
The majority of those who are first eligible for Medicare will fall into the category of age 65 or older. In the insurance industry when someone is turning 65, these individuals are often referred to as T-65, which means turning 65. When someone is turning 65 no matter what their current insurance is at that time, they have the option to enroll into Medicare Part A and/or B.
Simple requirements for Medicare at 65 or older
Here are the only requirements that CMS has in place when someone is turning 65 or older:
o The individual is age 65 or older,
o The individual is a U.S. resident,
o The individual is a U.S. citizen, and
o The individual is an alien who has been lawfully admitted for permanent residence and has been residing in the U.S for five continuous years prior to the month that they apply for Medicare.
Requirement of permanent residence for 5 year
The last scenario of requiring permanent residence in the U.S. for the last five years is typically when a family moves a parent over from another country to live with them permanently in the U.S. Once that family member is admitted for permanent residence, it will be five years before they can buy into Medicare. This would be a good example of an individual that would fall into the one percent of having to pay for their Medicare Part A.
To get Medicare prior to the age of 65, you must qualify based on permanent disability. An individual must apply with Social Security and be granted what is known as SSDI, which means that they are asking the federal government to pay them a benefit each month because they are permanently disabled and can no longer work.
Social Security determination for disability
Social Security will only pay out benefits if they have determined that an individual cannot work due to a disability for at least one year or it will result in the individual’s death. Social Security will use the following basic requirements to determine if someone could qualify:
o Are you working?
o Is your condition severe?
o Is your condition found in the list of disabling conditions?
o Can you do the work you did previously?
o Can you do any other type of work?
Payments are only offered for permanent disability
This is a lengthy process as the doctors and disability specialists must be involved in ensuring that the individual is unable to work and perform the basic duties of lifting, standing, walking, sitting, or the individual has cognitive issues that affects their impairment. Social Security does not offer short-term disability, but they do offer total permanent disability. They are making the decision to financially take care of the impact the individual will have because they can no longer contribute to the workforce.
Once granted disability Medicare is not immediate
Once someone is granted permanent disability, they will begin to receive SSDI benefits each month after a five-month waiting period. The SSDI will be paid on the sixth full month after the date that the disability was approved. Medicare, however, will not be automatic for the individual that first month when they start receiving their SSDI payments.
24-Month Social Security Disability Insurance waiting period before Medicare starts
Social Security has what they call a Medicare waiting period of 24 months of SSDI benefits before someone will qualify for Medicare Part A and B. Once someone has received SSDI benefits for at least 24 months, their Medicare Part A and B will start automatically on the 25th month. The Medicare card will arrive in the mail about three months prior to the effective date of the 25th month of SSDI benefits. The individual does not need to apply for their Medicare.
End Stage Renal Disease
Someone will qualify for Medicare if they have ESRD that results in permanent kidney failure, which requires dialysis or a kidney transplant. An individual that meets these requirements will need to apply for Medicare Part A and B. It will not be automatic just because they received the diagnosis of ESRD.
End Stage Renal Disease guidelines required to apply for Medicare
Here are the general guidelines and rules to get Medicare started when an individual meets the ESRD requirements:
o If an individual is receiving dialysis at an inpatient or outpatient facility for at least three months, they are eligible for Medicare on the 1st day of their fourth month of treatment.
o If an individual decides to begin at home dialysis, they may be eligible for Medicare on the 1st day of the month that their program begins.
o If an individual is receiving a kidney transplant, they are eligible for Medicare starting the 1st day of the month that they will be admitted to the hospital for the transplant. If the kidney transplant is successful, their Medicare will end 36 months after they have the kidney transplant
Lou Gehrig’s Disease
Amyotrophic lateral sclerosis or ALS is most referred to as Lou Gehrig’s disease, which would be considered a permanent disability according to Social Security. An individual would still have the five-month waiting period before receiving their SSDI benefit payments.
Lou Gehrig’s Disease has no waiting period before Medicare starts
What is different with this type of permanent disability, is that the 24-month waiting period for Medicare is waived. Medicare will start the first month that the individual begins to receive their SSDI benefit payments.
Can I get Medicare at 62 when I am first eligible for Social Security Retirement benefits?
No, an individual’s Medicare benefits do not begin until they are age 65 or older. An individual could be eligible for Medicare at the age of 62 if they have met the requirements of having received Social Security Disability Insurance (SSDI) for at least 24 months, diagnosed with Lou Gehrig’s Disease (ALS), or End-Stage Renal Disease (ESRD).
When should I take Social Security retirement benefits?
This is a decision that someone will need to make for themselves based on their needs. Currently, every individual has the option to take Social Security retirement benefits anytime between the ages of 62 through 70. Someone can sign up to start receiving retirement checks from the federal government as early as age 62, however, their payments will be reduced by taking it early before their full retirement
age. An individual turning 65 in 2022 will have been born in 1957, which will make age 66 and 6 months their full retirement age.
An individual turning 65 in 2022 who decided to start their retirement benefits early at the age of 62, would have seen their benefits reduced by 27.50 percent.
Social Security retirement benefits are intended to provide income for the rest of someone’s life; therefore, taking it early can be an important decision.
There are benefits to waiting until the full retirement age or later to start drawing Social Security benefits. If someone waits until their full retirement age, they will get 100 percent of the benefits that Social Security calculated for them based on their lifetime earnings. There is also a big benefit to those who wait until age 70 to start drawing their Social Security retirement benefits. For every year past someone’s full retirement age, Social Security will give an additional 8 percent increase in their Social Security payments.
What will Medicare cost?
Medicare Part A (Hospital) is typically free for anyone that is eligible and is sometimes referred to as “premium-free” Part A. An individual must have worked 10 years (40 quarters) in the U.S., to be eligible for Medicare Part A for free. This is because each time someone has FICA withheld from their wages, it is going to pay for the hospital insurance tax, also known as Medicare taxes.
Medicare Part B (Medical) is not free because it was never included in the FICA payroll taxes. As of 2022, the standard monthly premium for Medicare Part B that someone will be responsible for is $170.10. Although Part B is considered voluntary, almost 92 percent of those eligible for Medicare are enrolled in Part B. Without Medicare Part B, someone will not be eligible to enroll in the alternative plan to Medicare, which is called Part C Medicare Advantage. An individual must have both Medicare Part A and B to enroll in Part C.
When can I enroll into Medicare?
When it comes time for someone to enroll into Medicare, there are only three enrollment periods available that someone can use to get Medicare Part A and/or B:
o Initial Enrollment Period (IEP),
o Special Enrollment Period (SEP), and
o General Enrollment Period (GEP).
To become an expert in Medicare, it is extremely important to get familiar with each one of the three enrollment periods for Medicare Part A and B. Original Medicare will be the foundation to the federal health insurance program. Without Original Medicare, an individual cannot purchase a Medicare Supplement or choose to go with the alternative Medicare Advantage plan.
What is the 7-Month Initial Enrollment Period to Medicare?
First time eligibility for Medicare will typically be when an individual is turning 65. This period is referred to as a 7-month IEP, which allows anyone to enroll into Medicare Part A and/or B. If an individual has not been granted Medicare eligibility early because of a disability, this enrollment period will be extremely important. During the IEP, the individual will not need to provide any documentation to enroll into Medicare Part A and/or B. If the individual is turning 65 and has worked 10 years in the U.S., it entitles them to their Medicare benefits.
This enrollment period is when everyone who is first eligible for Medicare Part A and/or B should enroll. Here is why this enrollment period is so important even to those who are still working and covered by employer group health insurance:
o There is no paperwork required.
o There is no delay to Part A and B.
o There is no penalty for delaying Part B.
If an individual delays enrolling into their Medicare Part A and/or B during the 7-month IEP, they could find themselves in the following situation:
o Paperwork may be required to enroll.
o Delays in the Medicare effective date.
o Being responsible for a lifetime penalty.
If I don’t enroll for my 65th birth month, can my Medicare be delayed?
If an individual enrolls in Medicare the month that they turn 65 or anytime during the last three months of their IEP, they will find that their Medicare Part A and/or B start date is delayed. This Medicare rule does not make sense, but it is overseen by CMS, and they will not bend it. Medicare has some weird rules, and this is one of them. Medicare will delay an individual’s start date based on the month that they decide to enroll. It is always best to enroll in Medicare during the 90-days prior to turning 65 so as not to delay the coverage start date.
Ø If an individual enrolls into Medicare Part A and/or B during the month that they turn 65, their Medicare will start on the 1st of the next month.
Ø If an individual enrolls into Medicare Part A and/or B one month after they turn 65, their Medicare will start on the 1st of the 2nd month.
Ø If an individual enrolls into Medicare Part A and/or B two months after they turn 65, their Medicare will start on the 1st of the 3rd month.
Ø If an individual enrolls into Medicare Part A and/or B three months after they turn 65, their Medicare will start on the 1st of the 3rd month.
I didn’t enroll in Medicare at 65, what can I do now?
The Medicare SEP is for an individual who did not enroll during the 7-month IEP but has a valid reason that is recognized by the federal government.
o The only valid reason the federal government will accept is that the individual or their spouse was working, and they were covered by their current employers group insurance.
Many individuals have found themselves without an SEP because they thought that they could keep a previous employers group insurance past the age of 65 and that would count as credible coverage. The key wording by the federal government is that it must be based on the current employer’s group insurance.
An individual who wants to enroll after their 7-month IEP must provide valid documentation to Social Security that is accepted for enrollment into an SEP. The requirement that CMS has in place for a SEP is that the individual must be covered by a group health insurance plan that is based on their current employment if the following are satisfied:
o The individual or their spouse (or family member if they are disabled) is working.
o The individual is covered by a group health insurance plan through that employer or union that is based on where they are working.
Social Security will require that a form be filled out by the current employer showing that the individual or spouse was currently working for the company and was covered by the group health insurance plan.
What happens if I didn’t enroll into Medicare at 65 and I don’t have a Special Enrollment Period?
If an individual who is eligible for Medicare did not enroll in their Medicare Part B during the 7-month IEP and do not have a valid SEP, they will have one last enrollment period available to them. To make this easy to remember, you can think of the GEP as the naughty list. This can be referred to as the naughty list because the individual would have a lifetime late enrollment penalty for their Part B premium of 10 percent for each full year they delayed signing up. They would also have a delay in when their Medicare Part A and/or B effective date would start.
Every year, the GEP runs for enrollment into Part B between January 1 through March 3 with an effective date of July 1. This enrollment period is typically for someone over the age of 65 who never enrolled into Medicare Part B during their 7-month IEP, and they do not have a valid SEP. This affects about 1.5 percent of Medicare beneficiaries. There is no supporting documentation that is required for someone to enroll during the first three months of each calendar year during the GEP.
Is there a penalty if I don’t enroll in Medicare when I am eligible?
The only valid reason the federal government will accept to delay Medicare Part B and avoid a penalty, is if that the individual or their spouse was working, and they were covered by their current employers group insurance. Many individuals have found themselves having to pay a penalty because they thought that they could keep a previous employers group insurance past the age of 65 and that would count as credible coverage. The key wording by the federal government is that it must be based on the current employer’s group insurance. It is important to speak to one of our Client Enrollment Specialists to make sure you are making the right decision. Approximately 1.5 percent of Medicare beneficiaries are paying a penalty for not having made the right decision.
If an individual does not have a valid reason for not enrolling in Medicare Part B, there will be a 10 percent penalty for each 12-month period he individual delayed their Medicare Part B enrollment. Here is how Medicare would calculate the 10 percent penalty.
o For example, if someone delayed Part B for 4 years and signed up during the General Enrollment Period in 2022.
o $170.10 Part B premium x .4 (4 years) = $68.04 penalty
($170.10 + $68.04 penalty = $238.14)
o Part B Premium = $238.14
This lifetime penalty would be assessed every year and it would fluctuate each year as the Part B premiums change.
What happens if I did not work 10 years in the US?
In 2022, if someone did not work the required amount of years (10) or quarters (40), here is what Medicare Part A would cost:
o Medicare taxes for less than 30 quarters, the standard Part A premium is $499 a month.
o Medicare taxes for 30-39 quarters, the standard Part A premium is $274 a month.
Only 1 percent must pay for Medicare Part A because they did not work long enough in the United States to contribute fully to Medicare taxes.
Can I still get Medicare Part A “Free” if I did not work in the US for 10 years?
Although Medicare is individual insurance, if someone’s spouse did not work the full 10 years or 40 quarters than they can still get their own “premium-free Part A.” When they turn 65, they will qualify for Medicare Part A based on their spouse’s work history. Here are the requirements to get Medicare Part A for free:
o Married: If the individual’s spouse is eligible for Social Security benefits because of either the early retirement age (at least 62) or through disability, the individual will be eligible for Medicare Part A if they have been married for at least one year before applying.
o Divorced: If the individual’s former spouse is eligible for Social Security benefits because of either the early retirement age (at least 62) or through disability, the individual will be eligible for Medicare Part A if they had been married for at least 10 years. They must be currently single at the time of application to get Medicare Part A under a former spouse.
o Widowed: If the individual’s deceased spouse qualified for Social Security benefits or disability, the individual will be eligible for Medicare Part A if they were married for at least nine months before their spouse died. They must be currently single at the time of application to get Medicare Part A under a deceased spouse. If they remarry after the age of 60, the second marriage will not be used to determine the eligibility.
Can I get Medicare if I did not work, and I am older than my spouse?
If the non-working spouse did not work the full 10 years or 40 quarters and is older than their working spouse when they turn 65, then here is what will happen:
o If the working spouse is 62 and qualifies for Social Security retirement benefits, the non-working spouse can get “premium-free Part A” at age 65. The working spouse does not need to start drawing Social Security retirement benefits early at age 62 for the non-working spouse to get “premium-free Part A” at 65. The working spouse just needs to qualify for Social Security retirement benefits.
If the working spouse is not yet 62 when the non-working spouse turns 65, then here is what will happen:
o The non-working spouse would have to pay for Medicare Part A.
o The non-working spouse would have to pay for Medicare Part A until the working spouse turned 62. When the working spouse turned 62, the non-working spouse would be able to get Medicare Part A for free.
In situations like this, the working spouse will usually try to keep the non-working spouse on their working employer group coverage until they turned 62. At that point, the non-working spouse could then get the “premium-free Part A.” If that is not a possibility, then the non-working spouse may need to pay for Medicare Part A.
Do some pay more for their Medicare than others?
Yes, there are roughly 7 percent of individuals who will pay more for their Medicare Part B and D due to income. Social Security will look back at what someone has reported on their last two federal tax returns, which is provided by the Internal Revenue Service (IRS). For example, to determine what someone’s Part B and D premium will be for 2022, Social Security will look back at their 2020 federal tax return. Social Security looks specifically at what they refer to as the modified adjusted gross income (MAGI). Although this is different from the gross income, for many the gross and MAGI will be the same.
Examples of what could be included MAGI:
o Rental income,
o Property sale,
o Dividends from investments,
o Pension income, and/or
o Another large asset.
If the gross income or MAGI falls within the higher income tax bracket, the individual will be subjected to paying a higher amount for their Part B premium called income-related monthly adjustment amount (IRMAA).
If I must pay more for my Medicare, can I appeal?
Now there is good news if someone receives a letter from Social Security and does not agree with IRMAA and the higher amount for their Medicare Part B or D. They can appeal the decision and file a request for reconsideration. The individual must first wait to receive the determination from Social Security before they submit an appeal. The individual may amend their tax return that Social Security used to determine the IRMAA, which might help lower or remove the IRMAA or the income may have gone down since they filed the tax return. If someone had a major life-changing event and the income has gone down, they can file an appeal using form SSA-44.
Social Security considers any of the following situations to be life-changing events:
· Death of Your Spouse
· Work Stoppage
· Work Reduction
· Loss of Income-Producing Property
· Loss of Pension Income
· Employer Settlement Payment
I'm about to turn 65, how do I get started with Medicare?
If an individual is getting their retirement benefits from Social Security or the RBB at least four months prior to turning 65, the individual will automatically receive their Medicare card in the mail. There is nothing they need to do to apply for Medicare Part A and B. This will also apply to someone who is receiving SSDI (Social Security Disability Income). There is nothing that they need to do to apply for Medicare because it will be automatically mailed to them.
If someone is not receiving their benefits from Social Security or the RBB at least four months prior to turning 65, the individual will need to apply with Social Security or the RBB to get their Medicare card. Those diagnosed with ESRD (End Stage Renal Disease) who have met the requirements of eligibility for Medicare will also need to apply with Social Security or the RBB.
The individual must enroll in Medicare when not receiving benefits from Social Security or the RBB because the federal government does not have a means to automatically deduct the standard Part B monthly premium of $170.10 (as of 2022). The individual must request their Medicare card and set up a payment plan for the standard Part B monthly premium of $170.10 (as of 2022). The best way to enroll into Medicare is by applying online through Social Security at www.ssa.gov. Our company has an incredible department called the Client Experience Group that will take the time to walk anyone through the online steps to ensure the enrollment is successful. They understand that it can be stressful for someone enrolling for the first time and will virtually hold their hand throughout the process.
What can I expect in the mail from Medicare?
The individual will receive a letter in the mail from CMS with their Medicare card enclosed. Currently, the front of the envelope says, “Department of Health and Human Resources” and the back says, “Official Information from Medicare.” The Medicare Part A and B card that is enclosed is a paper card and does not carry any weight to it like a credit card. Unfortunately, there are those who will dismiss this correspondence as junk mail and throw it away.
The Medicare card that is enclosed in the envelope from CMS will have a unique Medicare number on it for that individual. It will also clearly show the Part A and B effective dates. The individual will need that unique Medicare number to sign up for a Part C Medicare Advantage plan. To enroll in an alternative plan to Medicare with a private insurance company, the individual must first be in the Medicare system. An individual who is turning 65 and is automatically enrolled into Medicare should expect to have the letter with their Medicare card at least 90 days prior to their Medicare effective date. Medicare Part A and B will go into effect on the 1st day of the individual’s 65th birth month. If the individual happens to be born on the 1st of the month, their Medicare will start the first of the prior month.
o For example: If someone turned 65 of July 1, their effective date for Medicare would be June 1.
How do I pay for Medicare if it is not automatically taken out of my Social Security check?
If someone is not receiving Social Security or RRB benefits, they will get a “Medicare Premium Bill” in the mail every three months.
There are 4 ways that an individual can pay their Medicare bill:
o Pay online through their secure Medicare account by credit card, debit card, or from a checking or savings account.
o Pay directly from savings or checking account through their banks online bill payment service.
o Sign up for Medicare Easy Pay which is a free service that deducts payments directly each month from a savings or checking account.
o Mail the premium payment directly to Medicare.
The individual will follow the instructions on the bill to pay the total amount due, so that Medicare will get the payment by the 25th of the month
Do I need both Parts A and B?
Whether an individual needs to take both their Medicare Part A and/or Part B depends on if Medicare will be their primary insurance. Most individuals that are eligible for
Medicare will need to take both their Medicare Part A (Hospital Insurance) and Part B (Medical Insurance.) Some individuals that are still working and being provided health insurance from their current employer, may not need to enroll in either Part A or Part B. Most individuals will enroll in at least Part A since it is free to them. However, if the individual works for a company that has less than 20 employees, the individual must take their Medicare Part A and B.
If the individual is not working and has either retiree insurance or COBRA coverage, they will need to enroll in both Part A and Part B when they are eligible for Medicare to avoid a penalty. Those looking to enroll into the alternative plan to Original Medicare referred to as Part C Medicare Advantage, will be required to have both Medicare Part A and B. It is important to speak to one of our Client Enrollment Specialists to make sure you are making the right decision when you are eligible for Medicare.
What would be a reason to delay Medicare Part B?
It is highly recommended that an individual enrolls into Medicare Part A and /or B during their 7-month IEP (Initial Enrollment Period). Those individuals who might want to consider waiting to enroll during an SEP (Special Enrollment Period) would be for one of the two following conditions:
o A dependent under the age of 65 is on the group health insurance coverage and would be affected or
o The individual is taking high-cost brand name or specialty medication, which is more cost effective under the group employer insurance plan.
If the individual does not have one of these two conditions, it is highly recommended to enroll during the 7-month IEP (Initial Enrollment Period)
What can I do to help cover the out-of-pocket costs of Medicare?
An individual has two options to help cover some of the out-of-pocket costs of Original Medicare. They can purchase a Medicare Supplement plan or enroll into an alternative plan to Original Medicare referred to as Part C Medicare Advantage.
What is a Medicare Supplement Plan?
A Medicare Supplement plan will help fill the “gaps” of Original Medicare Parts A and B. These plans are sold by private insurance companies but are standardized by the federal government with alphabet letters to offer the same coverage and benefits no matter what insurance company sells it. Effective July 1, 1993, the federal government standardiz
being offered by one company will have identical coverage and benefits as the other company based on that alphabet letter. This helps make it easy to shop for a Medicare Supplement plan since the plan is the same with every company.
Original Medicare Part A and B will be the primary insurance and will pay 80 percent of the Medicare-approved amounts for health care services that are billed to them by the doctors and hospitals. Medicare will then bill the Medicare Supplement company the remaining 20 percent bill to pay on behalf of the policy holder. This will give the policyholder 100 percent coverage with little to no out-of-pocket expenses.
A Medicare Supplement plan is not the same as a Medicare Advantage plan. A Medicare Advantage plan is just another way to get Part A and B benefits through a private insurance company and not the federal government. A Medicare Supplement plan on the other hand is a way to supplement Original Medicare Part A and B. You cannot have both a Medicare Supplement plan and a Medicare Advantage plan at the same time.
When is the best time to buy a Medicare Supplement Plan?
The best time for an individual to buy a Medicare Supplement plan is during the 6-month Medicare Supplement Open Enrollment Period, which is when an individual is
turning 65 or picking up their Medicare Part B for the first time. During this period, an individual can purchase a Medicare Supplement plan from any company regardless of their health conditions and will be automatically approved for the coverage. If an individual is looking to keep Original Medicare Part A and B as their primary insurance, this will be the best time to enroll into a Medicare Supplement plan.
Medicare states that when an individual is first eligible for Medicare or picking up their Part B for the first time the individual will typically get better prices and have more choices available to them, which is correct.
o Medicare Supplement plans do not get any federal funding from the federal government like that of a Medicare Advantage plan.
o Medicare Supplement plans are allowed to not offer coverage outside of a Medicare Supplement OEP or Guaranteed Issue based on health conditions to minimize claims and maximize profits.
If an individual is healthy, it would be smart to shop their Medicare Supplement plan ever couple of years since the plans are standardized and the alphabet letter will be identical coverage and benefits from any another company.
Do I need my Medicare A & B card to enroll into a Medicare Supplement Plan?
The individual is not required to have their Medicare A and B card in place to sign up and purchase their Medicare Supplement plan. If the individual knows that their Part B effective date will be within the next 6 months, they are allowed to enroll into the Medicare Supplement plan. This chart is a good reference on how early an individual can apply for their Medicare Supplement plan based on when they will be turning 65 or picking up Part B for the first time.
What do Medicare Supplement plans generally cost?
When an individual is shopping for the Medicare Supplement plan, the monthly premium will come down to their zip code. The current monthly premium for a Medicare Supplement Plan G will cost on average approximately $125 a month, and the
Medicare Supplement Plan N will cost on average approximately $95 a month. In some areas, such as Florida, where there is a larger population of retirees and the state uses an issue-age rating method, the monthly premium tends to be a little higher. The average cost is approximately $180 a month for Plan G, and around $145 a month for Plan N.
How do I pay for my Medicare Supplement plan?
Since the Medicare Supplement companies do not get any financial incentives from the federal government, the individual must pay them directly for their monthly premium.
The monthly premium will not be drafted from the individual’s Social Security check like it is with their Part B premium. The Medicare Supplement companies will require the policyholder to set up the monthly reoccurring draft payment from a checking or savings account like when someone gets a car loan.
Only a few Medicare Supplement companies will allow the policyholder to use a credit card for their monthly premium. There are two reasons that they do not allow this.
o The first reason is that the insurance companies would have to charge a higher premium to cover the interest fees on the credit card transactions.
o The second reason is that credit cards are constantly updated for security purposes and new cards mailed to its customer. If the policyholder did not remember to update their credit card with the insurance company, their policy could lapse, and they could find themselves without coverage when they needed it the most.
When can I expect a rate increase on my Medicare Supplement?
If an individual is due for a rate increase by their Medicare Supplement company, they can expect to receive a letter about a month or two before their policy anniversary date. The anniversary date can coincide with the individual’s birth month, but it can also be different if they started their policy later.
o For example, if they purchased a Medicare Supplement plan when they retired or shopped their policy during the calendar year, the effective date might be different than their birth month.
If the policy is with a mutually owned company, they may not see a rate increase because the profits are given back to its members in the form of reduced premiums. If claims are down, they could see their premiums stay the same or they may see their
premiums go down. On average, the person can expect to receive approximately a $7 rate increase every year, which is normal.
What are the pros and cons of a Medicare Supplement plan?
Pros of Medicare Supplement:
· Not instead of Original Medicare but supplements and covers the 20%
· Predictable out of pocket expenses for those that don’t like medical bill surprises (Monthly premium & small Part B deductible)
· Few providers decline service to patients with Medicare A & B and a Medicare Supplement plan. (93% of all doctors in US accept Medicare)
· Nationwide coverage with no networks
· No need for referrals or prior authorizations
· Portable so if someone moves there is no break in coverage
· Guaranteed renewable protection (No need to renew coverage every year)
· Benefits of alphabet letter never change (Only Medicare’s premiums and deductibles may change slightly each calendar year)
Cons of Medicare Supplement:
· Medicare Supplement premiums start off relatively low but can be a struggle to keep affordable as someone gets older
· Medicare Supplement plans can be hard to get outside of the initial enrollment period since most will require a medical review for approval
· Prescriptions not included with a Medicare Supplement plan
What is a Medicare Advantage plan?
Part C Medicare Advantage is another option that someone will have to choose from for their health care needs when they are eligible for Medicare. Medicare Advantage plans are like HMO or PPO that are provided by private insurance companies and not by the federal government. Although Medicare Advantage plans will vary by plan, they must all provide the same if not better coverage as Original Medicare Part A and B. Most plans will give some additional benefits not provided by the federal government.
An individual cannot have both Medicare Part A and B and a Part C Medicare Advantage plan; they must choose one or the other. The reason an individual cannot have both at the same time is because a Medicare Advantage plan is an alternative that someone has to Original Medicare Part A and B. Original Medicare is offered by the federal government and the Medicare Advantage plan is offered by a private insurance company. An individual with a Medicare Advantage plan will now have a private insurance company managing their health care for them and not the federal government.
Do I need my Medicare A & B card to enroll into a Medicare Advantage plan?
Yes, an individual must already be enrolled into Original Medicare Parts A and B to enroll in an alternative plan to the federal government. There are only two requirements that someone must meet to enroll in a Medicare Advantage plan which is as follows:
o Must be enrolled in Medicare Part A and B and
o Must have a valid enrollment period to join the Medicare Advantage plan.
Why do I need to still pay the Medicare Part B premium if I enroll into a Medicare Advantage plan?
Many individuals can be surprised to learn that they must still pay the standard monthly Part B premium of $170.10 (as of 2022) to Social Security. The Part B premium never goes away when someone enrolls into a $0 premium or any Medicare Advantage plan. Even though the individual is no longer enrolled in Original Medicare they are always Medicare eligible no matter what option they choose.
When an individual enrolls into a Medicare Advantage plan, the standard Part B monthly premium of $170.10 (as of 2022) a month that is collected by Social Security is now given to the private insurance company. This helps offset the cost in managing that individual’s health care instead of to Original Medicare. Once an individual is eligible for Medicare, they must always continue to contribute to the Medicare system no matter if they keep Original Medicare or choose a Medicare Advantage plan as their primary insurance. Medicare Advantage companies rely almost entirely on what the federal government gives them to manage someone’s health care and the Part B premium plays a large part in that.
Can I enroll into a Medicare Advantage plan when I turn 65?
The initial coverage enrollment period (ICEP) is the first time an individual can choose a Medicare Advantage plan instead of Original Medicare Part A and B.
An individual who is turning 65 and taking Medicare Part A and B for the first time, their 7-month IEP will also be their ICEP to enroll into a Medicare Advantage plan.
An individual eligible for Medicare Part A and B because of a disability that is turning 65 will also get an ICEP to join a Medicare Advantage plan. An individual who received their Medicare Part A and B prior to the age of 65 due to a disability, will also be eligible for an ICEP after receiving SSDI benefits for 24 months. An individual with an SEP or GEP for Medicare Part A and B, will also get an ICEP and can apply three months before their Medicare Part B effective date.
What is the Medicare Annual Enrollment Period?
The Medicare Annual Enrollment Period (AEP) or some refer to as the Medicare Open Enrollment Period (OEP) will always run from October 15 through December 7. During this time, the individual can join a Medicare Advantage plan for the first time or make changes to their current Medicare Advantage plan for the next calendar year. The individual will need to make their selections by December 7 so their coverage will take effect on January 1.
During this time, the individual can make these following changes: o Change to a Medicare Advantage plan from Original Medicare, o Change to Original Medicare from a Medicare Advantage plan,
o Change from one Medicare Advantage plan to another regardless of if they have drug coverage, and/or
o Enroll or drop a standalone PDP.
If an individual would like to enroll in a Medicare Advantage plan during the Medicare Annual Enrollment Period, there are only two requirements:
o The individual must have both Medicare Part A and B and
o They must live within the plans service area or network.
If the individual’s Medicare Advantage plan or standalone PDP is still available in their area and they do not want to make any changes during the Medicare OEP, the plan will auto renew for the next calendar year at midnight on December 7
What is the Medicare Advantage Open Enrollment Period?
The Medicare Advantage OEP is only for individuals who are already enrolled into a Medicare Advantage plan with or without drug coverage, which could be referred to as the “buyer’s remorse” period. This period is set aside for those that would like to still make some changes to their current Medicare Advantage plan.
If an individual is satisfied with their current coverage, they do not need to make any changes during this period. During the Medicare Advantage OEP, the individual can make the following changes:
o Change one time to a different Medicare Advantage plan with or without drug coverage,
o Cancel their Medicare Advantage plan and return to Original Medicare, or
o Enroll in a standalone PDP, which will cancel their Medicare Advantage plan and return them to Original Medicare.
The Medicare Advantage OEP provides an individual with more options after the Medicare OEP ends on December 7. Any changes made during the Medicare Advantage OEP will take effect on the first of the month. If an individual makes any changes to their coverage in the month of February, the new coverage will start on March 1. No changes can be made to their Medicare Advantage plan after the March 31 midnight deadline until the next year’s calendar Medicare OEP.
What is a big benefit to a five-star Medicare Advantage plan?
Since the rating was introduced in 2007, Medicare Advantage plans that achieve a 5-star rating are not that common. CMS rates Medicare Advantage plans on a 5-star system based on quality of care and customer service. If a 5-star plan is available in the individual’s area, they will have a onetime opportunity to enroll into that plan anytime during the calendar year for any reason. These plans will continue to market themselves throughout the calendar year and can be an incredible opportunity because anyone who is eligible for Medicare can enroll into one.
What are the pros and cons of a Medicare Advantage plan?
Pros of Medicare Advantage:
· Predictable low to no monthly premium for most plans
· Additional benefits not offered by Original Medicare like dental, vision, and hearing. Also, some plans offer a food card, transportation, silver sneakers (gym), and OTC prescriptions
· Part B give back on some plans
· Someone is always eligible for a plan regardless of health conditions
· Five star rated plans are offered year round
· All plans have a designated Maximum Out-Of-Pocket which could be less out-of-pocket a year than the Medicare Supplement plan premium if someone is healthy
Cons of Medicare Advantage:
· Instead of Original Medicare A & B for insurance
· Will continue to be responsible for paying Part B premium ($170.10 a month in 2022
· Skilled nursing care facilities in many areas don’t have the ease of billing like Original Medicare provides. May require proof that continued stay is necessary
· May require the need for referrals or prior authorizations
· Cancer treatments, kidney dialysis, and Part B drugs will typically have a 20% coinsurance responsibility up to the plan Maximum Out-Of-Pocket
· Hospital daily copays can be a surprise even when thoroughly explained
· Mayo Clinics and some Specialty Hospitals will not accept Medicare Advantage plans
What ways can I get prescription coverage while on Medicare?
There are only two ways that an individual can get their prescription drug coverage when they are eligible for Medicare. If they have Original Medicare as their primary insurance, the individual can purchase a standalone plan or have it included as a benefit to their Medicare Advantage plan.
o PDP: A standalone plan that an individual eligible for Medicare will purchase through a private insurance company approved by CMS. They must be enrolled in Medicare Part A and/or B to have a separate PDP or
o A Medicare Advantage plan approved by CMS that offers prescription drug coverage included in the plan offering. They must be enrolled in both Medicare A and B to enroll into a Medicare Advantage plan.
Is there a penalty if I don’t get prescription coverage when I am eligible for Medicare?
An individual who is eligible for Medicare should enroll into either a standalone PDP or a MAPD, which includes prescription drug coverage when they are first eligible for Medicare during their 7-month IEP. Even if the individual is not taking any prescribed medication, they will need to pick a Part D plan to avoid Medicare’s late enrollment penalty. Although prescription drug coverage is voluntary for those who are eligible for Medicare, an individual will owe a late enrollment penalty if they do not have credible prescription drug coverage after their 7-month IEP. An individual who delays Medicare Part B because they are working with employer group coverage that includes credible prescription drug coverage will not owe a late enrollment period when enrolling in a SEP.
If an individual does not enroll in either a PDP or MAPD during their 7-Month IEP and they do not have a SEP, they will have a late enrollment penalty for Part D of 1 percent per month for as long as they did not have credible prescription drug coverage. This will be a lifetime penalty added to their Part D drug plan. The only time an individual can buy or change a PDP or MAPD is during the Medicare OEP that runs from October 15 through December 7. If someone is responsible for a Part D penalty, here is how the late enrollment penalty is calculated.
In 2022, the “national base beneficiary premium” is set at $33.37. To calculate the late enrollment penalty, CMS would take the $33.37 times the number of months that the individual was without credible prescription coverage and round it to the nearest $0.10. In an individual went 3 years without credible prescription coverage they would have a 36 percent penalty. Here is how CMS would calculate the late enrollment penalty.
o .36 (36% penalty) x $33.37 (2022 national base beneficiary premium) = $12.01
CMS would round that to the nearest $0.10 which would make the late enrollment penalty an additional $12.10 a month. This would be permanently added to the individuals Part D prescription drug plan.
My income is low. Are there programs that can help me afford my Medicare premiums?
Yes. Every state has Medicare Savings Programs (MSPs) that can help pay your Part B premium. A Medicare Savings Program may also pay Medicare copays and deductibles. You can also see if you are eligible for Extra Help. Extra Help is a federal program that can help pay your Part D prescription drug costs. Our company has an incredible department called the Client Experience Group that can help make sure that you have all the benefits that you are entitled to as a Medicare beneficiary.