NEWS!!! 2019 Medicare & You booklets are in. Download here!
Taking the mystery out of 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 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!
Medicare annual ENROLLMENT DATES TO KNOW:
MEDICARE: 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…you can always change Supplement (MediGap Plans) any time of the year. However, you will have to answer insurable questions unless you have a ‘special circumstance’ that will make you ‘guaranteed issue’.
What is the new 2019 MEDICARE open ENROLLMENT PERIOD?
Not to be confused with the ‘Annual Enrollment Period’ that takes place every Oct 15th – Dec 7th, this time used to be called the ‘Disenrollment Period’ (Jan 1st – Feb 14th). Before this change, you could only dis-enroll from a Medicare Advantage Medicare Plan and choose a Part D plan. NOW, from Jan 1st – March 31st of each year, you can:
- Drop a Medicare Advantage Plan and go back to Original Medicare and if so, you can
- Enroll into a Part D Plan
- SWITCH to another Medicare Advantage Plan
- Drop a Part D 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 are the BASICS OF MEDICARE?
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! We take the mystery out of Medicare by breaking it down like this:
All you have to do is remember 4 and 3!
YOU HAVE 4 PARTS to MEDICARE & 3 OPTIONS
MEDICARE HAS 4 PARTS:
A – Hospital, Skilled Nursing, Hospice, etc.
B – Doctors, Outpatient, Ambulance, etc.
C – Medicare Advantage Plan
D – Prescription Drug Plan
MEDICARE HAS 3 OPTIONS:
1. Original Medicare (Part A & Part B) Only
2. Original Medicare (Part A & Part B) PLUS a Supplement Plan (Medigap) AND/OR Prescription Drug Plan (Part D).
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!
Once you’ve got that down, time to look at your personal situation. It comes down to ACCESS and BUDGET. 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 more premium 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)?
what do you need to be aware of before applying for medicare?
Here are the top 5 ‘WARNINGS’ and ‘GOTCHAS’
GOTCHA #1: What is the biggest negative about choosing Option 1 (Original Medicare) ONLY?
In a nutshell – the downfall of choosing only original Medicare with no other plans…there is NO maximum out of pocket. Medicare pays for approximately 80% of your medical expenses, you’re on the hook for 20% including Part B drugs. Chemo and anti-rejection drugs are Part B drugs. Do the math and calculate what 20% of chemotherapy for one year would be and you’ll see very quickly why this is not a very good option.
GOTCHA #2: Affectionately knowns as ‘IRMAA’, higher Income = higher Part B & D premiums. TWO (2) years before you plan on electing Part B, consult with your financial and tax professionals 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. Yes, it’s exempt from Federal & State taxes but not from the dreaded IRMAA! Many tax and financial pros are not aware of this little tidbit. 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-561-U2). Here are the current Income Related Monthly Adjustments for 2019:
PART B IRMAA:
Beneficiaries who file an individual tax return with income:
Beneficiaries who file a joint tax return with income:
Part B income-related monthly adjustment amount
Total monthly Part B premium amount
|Less than or equal to $85,000||Less than or equal to $170,000||$0.00||$135.50|
|Greater than $85,000 and less than or equal to $107,000||Greater than $170,000 and less than or equal to $214,000||$54.00||189.50|
|Greater than $107,000 and less than or equal to $133,500||Greater than $214,000 and less than or equal to $267,000||$135.40||$270.90|
|Greater than $133,500 and less than or equal to $160,000||Greater than $267,000 and less than or equal to $320,000||$216.70||$352.20|
|Greater than $160,000 and less than $500,000||Greater than $320,000 and less than $750,000||$297.90||$433.40|
|Greater than $500,000||Greater than $750,000||$325.00||$460.50|
PART D IRMAA:
|Less than or equal to $85,000||Less than or equal to $170,000||Your plan premium|
|Greater than $85,000 or less than or equal to $107,000||Greater than $170,000 or less than or equal to $214,000||$12.40 + your plan premium|
|Greater than $107,000 and less than or equal to $133,500||Greater than $214,000 and less than or equal to $267,000||$31.90 + your plan premium|
|Greater than $133,500 and less than or equal to $160,000||Greater than $267,000 and less than or equal to $320,000||$51.40 + your plan premium|
|Greater than $160,000 and less than or equal to $500,000||Greater than $320,000 and less than or equal to $750,000||$70.90 + your plan premium|
|Greater than $500,000||Greater than $750,000||$77.40 + your plan premium|
GOTCHA #3: Affectionately knowns as 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 what you pay). Every year, the amount changes. For 2019, when the TOTAL cost of your drugs = $3,820, you’re in it. Now it will cost you approximately 25% till you reach ‘catastrophic’ coverage (another confusing formula) which is $5,100. In the Donut Hole, you would be out of pocket approximately $3,000 – $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.
GOTCHA #4: Will ALL of my medical needs be covered by Medicare?
Unfortunately, the answer is NO. 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
GOTCHA #5: NOT PLANNING YOUR MEDICARE ENROLLMENT – If you need your Part B to start a couple months AFTER your birthday month, you could be locked out for a month OR TWO!
Not many people even know about this glitch! Medicare’s system is VERY inflexible especially when you are in the 7 months of your ‘Initial Enrollment Period’ (3 months before your Birth Month, Your Birth Month and 3 months following your Birth Month). Leaving an Employer Group Plan is normally considered a ‘Special Election Period’ BUT the Initial Enrollment Period trumps the Special Election Period. Check this out:
- Let’s say your birthday is in August and your plan was to work past your 65th birthday so you didn’t enroll Medicare Part A & B.
- In September (one month after your Birth Month), you are offered a Golden Parachute and retire.
- Your employer group plan stops on September 30th, so you need your Medicare to begin on October 1st.
- You dance into you local Social Security office at the beginning of September, happy and excited to retire and apply for Medicare.
- Your heart stops when the agent tells you the not-so-wonderful news…your Medicare won’t start till November 1st. WHAT? But you’re applying before October, why can’t they start it on October 1st?
- The reason…the DREADED ENROLLMENT CHART:
Notice in the chart, if you apply the month after you turn 65, your coverage will start 2 months after you enroll. In this case, you applied in September (one month after your Birth Month) so coverage won’t start till November 1st (2 months after you enrolled)…skipping October (when you need it to start).
The Solution: Go to Social Security before your birthday month and apply for free Medicare Part A. It will supplement your employer group plan and it doesn’t cost you anything so there is no reason for you NOT to take free Medicare Part A. Make sure you get a date and time stamped receipt that you were in the office. Because you can prove you were in the office, most times, Social Security will allow you to enroll in Part B the beginning of the next month. If you continue to run into roadblocks with the enrollment agent, don’t be afraid to ask for a supervisor to plead your case.
More medicare plan info
WHAT IS THE BEST SUPPLEMENT OR MEDIGAP PLAN?
Supplemental policies are issued from a private insurance companies. They are mandated to be the same (Plan F with Company A is the same as an 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. If you live in CA and OR, you can CHANGE your MediGap Supplement 30 days following your birthday, with NO insurable questions asked. Otherwise, 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.
TIP: 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. If you don’t live in CA or OR (Birthday Rules), you’ll need to be very careful about which plan you choose when you are first eligible.
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!
Okay, so let’s break down Medicare Advantage Plans (Part C)!
Medicare Advantage Plans are offered by a 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. Medicare Advantage Plans include Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), Private Fee-for-Service Plans (PFFS), Special Needs Plans, and Medicare Medical Savings Account Plans (MSA). If you’re enrolled in a Medicare Advantage Plan, most Medicare services are covered through the PLAN and aren’t paid for under Original Medicare. Many Medicare Advantage Plans also offer 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!
WHAT’S THE NEXT STEP?
We’ve only just scratched the service here of the wonderful world of Medicare health plans! There is so much more to know and we’re sure you have questions!
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 pay us 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, complimentary 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!
For more information please give us a call at: 323-455-4961
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