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Taking the Mystery Out of Medicare
There is a TON of great info on Medicare. We want to inform you of the things you need to be aware of before applying for Medicare!
Medicare can be very confusing, there’s no question about it. That’s what we’re here for. In case you don’t know already…Medicare pays for approximately 80% of your medical costs – we care how you pay for the rest!
We make it easy for you to understand, help you figure out your options, when to enroll, what will be covered and so much more! And the best part is, you don’t pay any more or less to have us help you and to be your advocate after your policy is in place!
How to Enroll in Medicare when turning 65?
There are two different situations to ask before applying:
1) If you are turning 65 and NOT receiving Social Security, you need to APPLY for your Medicare benefits (see below).
2) If you ARE receiving Social Security benefits, you’ll automatically be enrolled…there is nothing for you to do. Just check that big stack of junk mail you received. Your Medicare ID card may be in there.
To enroll, we always recommend calling us before starting this process just in case you have extenuating circumstances to consider. There are two more situations to be aware of:
1) If you were born in the US, your process should be very easy. If you want your Medicare to start at the beginning of your birth-month, take a shot at applying online!
2) If you were born outside the US, call Social Security (800.772.1213) first because you may need to go into the office with documents.
For those born inside the US, here’s the application process:
Step 1: If you already have an SSA (Social Security) registration, go to Step 2. If not, go to SSA.gov and register for a MySocialSecurity account: SSA.gov Record your user name and password, you’ll need it in Step 2.
Step 2: After you have your MySocialSecurity account, go to: Apply for Medicare
You’ll need your user name and password from Step 1. Go through the steps….it’s pretty easy! Also, record your Re-Entry #, just in case you get kicked out for some reason.
**NOTE: Many people make a big mistake when they are applying online…they stop when they see the ‘re-entry #’ pop up. YOUR NOT FINISHED YET, this is just intermission. CONTINUE till you have ‘submitted’ your application.
When Do I Enroll in Part A and/or Part B When I Turn 65?
When to enroll in Medicare Part A & Part B depends on several factors, mainly when you want your Medicare to start. For most people, you have a 7-month window:
THE MEDICARE ENROLLMENT BLACK HOLE! If you want your Medicare to start within the 3 – 6 months following your birth month, it’s VERY important WHEN you apply for Medicare. Some people have an employer group plan that will end 2 or 3 months following their birth month so they don’t want to pay the Part B premium when they are still covered under a great Employer Group plan. It can be a bear to get done on the exact date you need it. Why?
When you turn 65 you are in something Medicare calls your ‘Initial Enrollment Period (IEP)’. When leaving an employer group plan, you are in a ‘Special Enrollment Period (SEP)’ and can get your Medicare to start when your Employer Group plan ends. Medicare’s system is extremely INFLEXIBLE. IEP trumps the SEP in their computer system. Therefore, when you are still in this 7-month IEP window, you cannot just choose a date for your Medicare to start. You will have to follow this chart from Medicare:
Notice, if you wait to apply till 2 months following your birth month, your Medicare won’t start for 3 months AFTER you apply which means you may be without insurance for one or two months.
Here’s an example:
- Birth month is August
- Employer Group plan ends October 31st and you want Medicare to start on November 1st
- When will your effective date be? If you apply in:
- 3 months before your birth month – effective date will August 1st
- Birth month – effective date will be September 1st
- September (1 month following your birth month) – effective date will be November 1st (2 months following your birth month)
- October (2 months following your birth month) – effective date will be January 1st (3 months following your birth month)
- November (3 months following your birth month) – effective date will be February 1st (3 months following your birth month)
So you see, there are some holes in their system.
- We have helped clients to get the date they needed if you go the Social Security office BEFORE your birth month and obtained PROOF that you were there (always obtain a receipt with the date/time stamped along with the agent’s name you spoke with). You may have to speak with a supervisor but it can be done.
- Be careful about which date you apply for your Medicare. TIP: If you are applying on your birth month or later, DO NOT even start the process of applying. Medicare’s system logs in that you entered the system beforehand and will log that you applied in the previous month.
When is Annual Enrollment Period?
OCTOBER 15th – DECEMBER 7th: This is the time you can change Part C and D Plans. You can change as many times as you want…the last one in the system is the one you will have. You will get bombarded by mail and sometimes phone calls. We can negotiate this often confusing time for YOU.
Know how to get the most out of the plans available, including prescription drugs.
TIP…MediGap Supplement have a different enrollment period. See below for more info.
When is the New Medicare Advantage Open Enrollment?
JANUARY 1st – MARCH 31st: Not to be confused with the ‘Annual Enrollment Period’ (see above), this time of the year, you can:
- Drop a Medicare Advantage Plan and go back to Original Medicare and if so, you can Enroll in a Part D Plan
- SWITCH to another Medicare Advantage Plan
Different from Annual Enrollment Period (where you can change your plan as many times as you want), during the ‘Open Enrollment Period’, you can only change your plan ONE TIME.
What can you NOT do:
- SWITCH a Part D plan
What Are the Medicare Basics?
Listen to Debbie Hoffman explain Medicare like you’re 5, in under 5!
SO, WHAT IS MEDICARE?
If you are nearing your 65th birthday, you’ve likely been hearing a lot about Medicare lately, probably have received a mountain of mail and no doubt you have questions. Medicare is the federal health insurance program for individuals who are 65 or older. Others who may be eligible? People under 65 with disabilities and those suffering from End Stage Renal Disease (ESRD) requiring a kidney transplant or dialysis.
What does Medicare Cover?
This is where things can start to get confusing! There is a ton of good info on the web. Medicare.gov is an excellent resource. Click here for the updated deductibles and benefits. We like taking the mystery out of Medicare by breaking it down like this:
All you have to do is remember 4 and 3!
THERE ARE 4 PARTS to MEDICARE & 3 OPTIONS
MEDICARE HAS 4 PARTS – ABCDs:
A – Hospital, Skilled Nursing, Hospice, etc. – $0 premium if you or your spouse worked 40 quarters
B – Doctors, Outpatient, etc. – 2021 premiums start at $148.50/mo but is income related (see IRMAA chart in the next tab)
C – Medicare Advantage Plan – Most plans do NOT have a premium
D – Prescription Drug Plan – Ranges from $7/mo – $150/mo dependent on your meds
s – Supplement/MediGap – Not a Federal Program but will be an option. Premiums range from $32/mo – $450 depending on age, geographic location and whether or not you smoke.
MEDICARE HAS 3 OPTIONS – The Pros and Cons:
1. Original Medicare (Part A & Part B) Only
PRO: You can go to any Doctor, Hospital, Urgent Care, etc. with NO referral needed (as long as they accept Medicare).
PRO: Low premiums. You only pay your Part B premium.
CON: No Maximum Out of Pocket (MOOP). In a nutshell – the downfall of choosing Option 1…there is NO maximum out of pocket. Medicare pays for approximately 80% of your medical expenses, you’re on the hook for around 20% including Part B drugs. Chemo and anti-rejection drugs are Part B drugs. Do the math and calculate what 20% of chemotherapy or radiation for one year would be and you’ll see very quickly why this is not a very good option.
CON: No prescription drug coverage
2. Original Medicare (Part A & Part B) PLUS a Supplement Plan (Medigap) AND/OR Prescription Drug Plan (Part D). We call this one the ‘Better Than a PPO Plan’.
PRO: CHOICE – Just like option 1, you can go to any Doctor, Hospital, Urgent Care, etc. with NO referral needed (as long as the accept Medicare).
PRO: COMPREHENSIVE COVERAGE – Medical and drug coverage. The MediGap Supplement will pick up SOME or ALL of what Medicare doesn’t pay (depends on which Supplement you choose and as long as it’s Medicare approved).
CON: Two (2) additional premiums (besides your Part B premium).
3. Medicare Advantage Plan (Part C, like an HMO, PPO, MSA, PFFS, etc.). Most times, these plans include Part D and can include other services that Medicare doesn’t cover (dental, vision, transportation, acupuncture or chiropractic care). Deciding on a Medicare Advantage Plan? Check out this great ARTICLE on a few mistakes to avoid!
PRO: NO or LOW additional premiums. In many areas like the Los Angeles area, there are $0 premiums
PRO: Many Part C Medicare Advantage Plans offer other benefits such as vision, hearing, dental, transportation, etc.
CON: The insurance company takes over administration of your Part A & B and therefore, the insurance company will have a say so whether you have a procedure or test. There are limitations and rules for each different type of Part C plan. Also, if in an HMO, you are in one Medical Group and will need to obtain a referral from your Primary Care Physician to see a Specialist (like a dermatologist or cardiologist), unless the Medical Group allows for ‘self-referral’.
Once you’ve got that down, time to look at your personal situation. It comes down to BUDGET and ACCESS. EVERYONE’s situation is different! Here are some questions to ask yourself:
- Do you want access to any provider that accepts Medicare or will you go to a provider suggested by your Primary Doctor?
- Are you ok with paying additional premiums for more choice of providers?
- Do you have a 2nd home in another part of the country?
- What are your medications (name, dosage, quantity per day)?
- Will you be obtaining a Concierge Physician?
If You Make More Money, You'll Pay More Part B & Part D premiums (IRMAA)?
Known as ‘IRMAA’ (Income Related Monthly Adjustment Amount), if you have higher income, you’ll pay higher Part B AND D premiums. TWO (2) years before you plan on electing Part B, Social Security will look at your taxes and determine your Medicare premium. It’s a good idea to consult with your financial and tax professionals BEFORE that year on ways you can decrease your MAGI!
The figure used to determine your premium is based on your ‘MAGI’ (Modified Adjusted Gross Income). Basically, take your AGI (Adjusted Gross Income) and add back any UNTAXED Social Security and Tax-Exempt Interest (amongst other things). Yes, Tax-Exempt Interest is exempt from Federal & State taxes but not from the dreaded IRMAA! Many tax and financial pros are not even aware of this little tidbit (that’s why they LOVE us ;). They may have you convert your IRA to a Roth IRA or take stock options or have you sell an investment property before you retire. Those will ALL increase your MAGI! Be very careful or consult us to help guide you.
TIP…If your income has decreased because of a life event (retirement, deceased spouse, divorce, etc.), you can request a ‘reconsideration’ from Social Security. Run (don’t walk) to your local Social Security office with proof and this reconsideration form (Form SSA-44). Here are the current Income Related Monthly Adjustment Amounts (IRMAA) for 2022:
PART B IRMAA:
Beneficiaries who file an individual tax return:
Beneficiaries who file a joint tax return:
Beneficiaries who file married & separate tax returns:
|Less than or equal to $91,000||Less than or equal to $182,000||$91,000 or less||$170.10|
|Greater than $91,000 and less than or equal to $114,000||Greater than $182,000 and less than or equal to $228,000||Not applicable||$238.10|
|Greater than $114,000 and less than or equal to $142,000||Greater than $228,000 and less than or equal to $284,000||Not applicable||$340.20|
|Greater than $142,000 and less than or equal to $170,000||Greater than $284,000 and less than or equal to $340,000||Not applicable||$442.30|
|Greater than $170,000 and less than $500,000||Greater than $340,000 and less than $750,000||Greater than $91,000 and less than $409,000||$544.30|
|Greater than $500,000||Greater than $750,000||Greater than $409,000||$578.30|
PART D IRMAA:
|Less than or equal to $91,000||Less than or equal to $182,000||Your plan premium|
|Greater than $91,000 or less than or equal to $114,000||Greater than $182,000 or less than or equal to $228,000||$12.40 + your plan premium|
|Greater than $114,000 and less than or equal to $142,000||Greater than $228,000 and less than or equal to $284,000||$32.10 + your plan premium|
|Greater than $142,000 and less than or equal to $170,000||Greater than $284,000 and less than or equal to $340,000||$51.70 + your plan premium|
|Greater than $170,000 and less than or equal to $500,000||Greater than $340,000 and less than or equal to $750,000||$71.30 + your plan premium|
|Greater than $500,000||Greater than $750,000||$77.90 + your plan premium|
What is the Part D Donut Hole?
What is the ‘DONUT HOLE’?
Unfortunately, we’re not talking about the treat you enjoy during your coffee break. This “Donut Hole” is a coverage gap in your Medicare Part D – Prescription Drug Plan. Once you enter the “coverage gap” you won’t pay a co-pay, you will only receive a discount on your medications. It’s based on the TOTAL cost of the drug (not just what you pay). Every year, the amount changes. For 2022, when the TOTAL cost of your drugs = $4,430, you’re in it. Now your medications will cost you approximately 25% of the TOTAL cost of the drug, till you reach ‘catastrophic’ coverage (the TROOP, another confusing formula consisting of the manufacturer’s discounts also) which is $7,050. From experience, when you’re in the Donut Hole, you would be out of pocket approximately $3,600 of your own money. Then you’re in ‘catastrophic coverage’ and your out-of-pocket goes down dramatically. However, if you’re on a heavy duty, very expensive medication, even the catastrophic cost could be thousands of dollars.
So, what do you do in the meantime and how can you get extra help with prescription drug costs when you hit the donut hole? For our clients that cannot afford their medications during the Donut Hole period, we are connected with specialty pharmacies and non-profit organizations that will ease you through this time period or you may qualify for something called Extra Help with Social Security. We’ll help you determine if you’re eligible.
What is NOT Covered By Medicare?
Unfortunately, Medicare Parts A & B DO NOT cover everything. You may end up paying out of pocket unless you have other insurance or Medicaid OR you’re in a Medicare health plan that covers these services.
Don’t forget… with a Medicare Advantage Plan or a Supplement (other than Plan F) even when Medicare DOES cover the service you may still be responsible for deductibles, coinsurance and co-pays.
Here are some of the things that Medicare DOES NOT cover:
- Long term care (aka Custodial care)
- Holistic practitioners
- Routine dental or eye care
- Cosmetic Surgery
- Hearing Aids and exams for fitting them
Have an HSA and Eligible for Medicare?
We know…what’s the big deal? An HSA health plan is a good thing, right? Well, it is if you’re under 65 years of age. If you’re eligible for Medicare, maybe not.
The good news is, you can still use your HSA funds to pay for eligible medical expenses and some Medicare premiums.
The bad news is once you turn 65 and apply for Part A, you are NOT allowed to contribute to an HSA. So, what happens if I just don’t elect Part A. Glad you asked. If you delay your Part B, when you apply for it, Medicare will retroactively apply your Part A 6 months back. Therefore, any contributions made during that period will be taxed. Best to consult with your financial advisor and/or tax pro to make sure you’re not unnecessarily taxed.
The other issue is with Part D. Many HSA plans are NOT considered ‘creditable coverage’ for Medicare Part D. If you don’t have creditable coverage when you’re first eligible for Medicare, you will pay a penalty.
TIP…if you want to keep your HSA, you can elect a Part D plan with only Part A in place.
How to choose a MediGap SUPPLEMENT PLAN
Just like all the other options, which plan is the right one for you is hard to say exactly until we know more info. There are TONS of great plans from great companies but it depends on your age, your area, whether you smoke or not, and whether you are ‘guaranteed issue’ or not.
Here’s some info you’ll want to know:
- MediGap Supplement policies are issued by private insurance companies.
- They are mandated to be the same (Plan F with Company A is the same as a Plan F with Company Z).
- There are numerous MediGap plans and they are lettered A – N (not to be confused with the 4 Parts of Medicare).
- MediGap Supplements will cover SOME or ALL of what Medicare doesn’t cover (has to be Medicare-approved).
- There are two things that can be different with Supplements:
1) additional services (optional dental, vision, transportation, hearing, gym membership, etc.)
2) how their premiums are calculated
We know all the ways the carriers price their premiums so we’re not just interested in saving you money the first year but subsequent years to come.
Another cool thing if you live in CA and OR…you can CHANGE your MediGap Supplement 30 days following your birthday, with NO insurable questions asked. All other states, if you want to change, you’ll have to answer insurable questions or stay in the same plan forever. In ALL states, if you don’t get into a MediGap Supplement plan when you are first eligible, you could have to answer insurable questions to obtain one. If you have a Part C (Medicare Advantage Plans), there are ways to obtain a MediGap Supplement without answering insurable questions, we know them all. Call us to see if you qualify!
TIP: Supplement premiums can increase TWICE per year:
1) When you turn a year or two older
2) When they have a ‘community’ or global increase (by zip code, county, or statewide). We want to save you money now AND as you age.
IMPORTANT: If you are interested in supplementing your Medicare, you must consider a Supplement (Medigap), Medicare Advantage Plan and/or Part D drug coverage…NOT an ACA (ObamaCare) Plan. It’s actually illegal for you to receive an ObamaCare subsidy while eligible for free Medicare Part A.
What are Medicare Advantage Plans (Part C)?
Medicare Advantage Plans (Part C) are offered by private companies that contract with Medicare to provide you with all your Part A and Part B benefits. The insurance companies basically get paid a monthly fee from the government to manage the administration and medical care.
There are many types of Medicare Advantage Plans including:
- Health Maintenance Organizations (HMO)
- Preferred Provider Organizations (PPO)
- Private Fee-for-Service Plans (PFFS)
- Special Needs Plans
- Medicare Medical Savings Account Plans (MSA).
Many Medicare Advantage Plans also offer Part D (prescription drug coverage) and other benefits such as vision, hearing, dental, transportation, etc. There are pros and cons to all Plans and you must know what to watch out for. Before deciding on a Medicare Advantage Plan, this ARTICLE is a MUST read and will explain a lot!
Again, whether this is the right option for you or not depends on many factors. Each carrier can provide a Summary of Benefits which makes things easier to compare but we will dive deep with you and peek behind the curtains of all the plans to make sure you’re making the right decision.
TIP…If you are new to a Medicare Advantage plan, you have one year to change to a Medigap Supplement with no insurable questions asked. You can change ANYTIME within that year. You don’t have to wait until the Annual Enrollment Period.
Still Working Past 65 and have Employer Group Coverage
Again, call us first because there are many extenuating circumstances where you could incur a penalty OR we may be able to save you some moolah! If you’re happy with the Employer Group Plan AND you or your spouse (whoever has the plan) is still working (cannot be disabled and off of work), then you can apply for your Part A and delay your Part B.
Remember to ask the Employer whether they have under 20 employees or 20 or more employees. If under 20, Part A & Part B will be primary to your Employer Group plan. If that’s the case, you will want to obtain Part A and B.
It’s best to just call us so we can analyze whether you should or shouldn’t apply for Part A/B.
What happens When I Retire or Get Laid Off?
Now you’ll need to apply for Part B (and Part A if you haven’t already). There are two forms you need to take to the Social Security office and from experience, don’t go the Social Security office any sooner than TWO (2) months before you want the Part B effective. If you go too early, most times, your Part B will be effective before needed and you’ll needlessly be paying extra $$:
- Request for Employer Info – take this one to your HR or Benefits Dept to be completed and signed
- Application for Part B – you will sign this one
***MAKE SURE YOU GET A RECEIPT SHOWING THE AGENT’S NAME, DATE AND TIME YOU WERE THERE. IF YOU DON’T RECEIVE YOUR MEDICARE CARD IN A FEW WEEKS, YOU’LL NEED IT TO PROVE YOU WERE THERE***
NOTE…if the Social Security office is closed (like during the COVID-19 pandemic), you’ll have to mail in the forms. Call Social Security at 800.772.1213 and ask for the address to send the forms. Make sure to obtain a signature when mailing so you have proof they received your forms.
Where Can I Find Help?
We’ll be happy to answer all of your questions and get you started at NO EXTRA CHARGE! We DO NOT charge broker fees, we accept what the insurance companies pay us IF we place your plan. And since we’re contracted with most of the carriers, it doesn’t matter to us which one you choose. We just want to make sure it’s the better Plan for YOUR specific needs.
- We will always do what’s best for you, not us, whether we are compensated or not
- We will keep up to date with valuable Medicare news, hints and tips
- We will be your advocate after placing your policy
- We will research the new Plans for you each year
- We will always CARE, be kind and do the right thing for you!
We would be delighted to help you with this journey. Just call us and if you don’t mind sharing some info (see below), we will do a comprehensive, complementary search for you. Hopefully, you’ll choose us as your advocate, but if you don’t, at least we know you will be armed with the best information possible!
We do a lot for you, right? But what we can’t do is make you do is pick up the phone and call us: 323-455-4961
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FROM OBAMACARE TO MEDICARE…WE REALLY DO CARE!