Medicare...
is a health benefits program administered by CMS, an agency of the US Department of Health and Human Services. It is for people who meet certain work history requirements that are age 65 and older, and for under age 65 with disabilities, and people with End Stage Renal Disease (ESRD) or Lou Gehrig's Disease (ALS) .
THE PARTS OF MEDICARE
ORIGINAL MEDICARE HAS TWO PARTS - PART A & PART B
MEDICARE PART A
Medicare Part A (Hospital Insurance) is provided premium free for most people because they paid Medicare taxes while working. If not, you could pay up to $505 each month. Part A covers Hospital, Skilled Nursing Facility, Hospice and Home Health Services. In 2024, the deductibles you would pay are:
Hospital Stay
- $1,632 deductible per benefit period
- $0 for the first 60 days of each benefit period
- $408 per day for days 61-90 of each benefit period
- $816 per "lifetime reserve day" after day 90 of each benefit period (up to a maximum of 60 days over your lifetime)
Skilled Nursing Facility Stay
- $0 for the first 20 days of each benefit period
- $204 per day for days 21-100 of each benefit period
- All costs for each day after day 100 of the benefit period
MEDICARE PART B
Medicare Part B (Medical Insurance) covers 80% of Medicare approved costs for physician services, outpatient therapy, clinical lab services, preventative services, and durable medical equipment after the Part B Deductible has been met. In 2024, the Part B Deductible is $240 for the year. Medicare Part B requires a monthly payment that is deducted from your monthly Social Security benefits or is billed to you if you are not currently collecting Social Security. Most people pay the standard premium amount which in 2024 will be $174.70/month. This amount can change annually.
However, if your modified adjusted gross income as reported on your IRS tax return from 2022 is more than $103,000 for an individual or $206,000 for a joint return, you may pay more. If you do not enroll in Part B when you are first eligible, and do not have group health insurance from an employer or a spouse's employer, the Part B premium will be increased 10% for every full 12 month period you didn't enroll. The amount you pay will be permanently higher if you are assessed this late enrollment penalty.
Social Security will tell you the exact amount you will need to pay in 2024.
MEDICARE PART C
Medicare Part C is also known as Medicare Advantage. It is offered by private insurance companies approved and contracted by the Centers for Medicare and Medicaid Services. It combines the coverages of Part A and Part B into one policy. It may also include Part D, Prescription Drug Plan. These plans can also include additional benefits such as vision, dental and hearing coverages, all in one plan. You must be enrolled in both Part A and Part B to join a Medicare Advantage plan. You will remain enrolled in Medicare Parts A and B, but you will receive your benefits through your Medicare Advantage insurance company instead of the government. These plans can be Health Maintenance Organization (HMO), Point of Service (POS), Preferred Provider Organization (PPO), Special Needs (SNP), Private Fee for Service (PFFS), Medical Savings Account (MSA) plans or Employer or Union Group Plans.
MEDICARE PART D
Medicare Part D is also known as the Prescription Drug Plan (PDP). It helps pay for the prescription drugs that your doctor prescribes. Part D can be purchased as a standalone Medicare PDP with original Medicare Part A and Part B, or as part of a Medicare Advantage Plan, or with a Medicare Supplement plan and original Medicare Part A & Part B. Prescription Drug plans should be purchased when you first become eligible even if you are currently not taking prescription drugs so that you can avoid Medicare's late enrollment penalty. If you are currently taking medications it is important to check the plans formularies for the cost of your prescriptions and that your pharmacy accepts the plan.
WHEN SHOULD I APPLY?
INITIAL ENROLLMENT PERIOD
It is common knowledge that when you turn 65 you qualify for Medicare. Unfortunately not everyone understands what that means, what they have as options and what to look for to choose what is best for them. When you first become eligible you will be given an Initial Enrollment Period (IEP) to make your choices. It begins three months before the month of your 65th birthday and continues for three months after your birth month for a total of seven months. During this time you are able to apply for Medicare and purchase Medicare products such as a Prescription Drug Plan, Medicare Supplement or a Medicare Advantage Plan. It is important that you do so because if you do not make your purchases then, it could lead to Late Enrollment Penalties and/or gaps in coverage, as well as losing out on coverage you may have wanted. It is best to begin your research 3-4 months before your 65th birthday so that you can complete your choices in the allotted time.
However, if you are currently in a group plan through your work or your spouse's work, and are not planning on leaving your group plan at age 65, you may not need to apply for Medicare. Check with your group plan to confirm it is "creditable coverage" and whether you need to apply for Medicare.
Medicare options can be confusing and costly if not made in a timely manner. If you live in NY or PA we are available for a no-cost, no-obligation appointment to help you review your options.
SPECIAL ENROLLMENT PERIOD
Beyond that first Initial Enrollment Period, you may also apply for Medicare after you turn 65 when you qualify for a Special Enrollment Period.
The most common is if you are over 65 when you retire and have been on a group plan that is considered “creditable coverage”. If you are not already collecting Social Security benefits, you will need to apply for Medicare; it doesn’t happen automatically. Here again it is important that you begin planning and reviewing your choices so that you can begin your Medicare coverage when your group coverage ends. You will need to prove that you had “creditable coverage” prior to applying, for the period since you turned 65, so be sure to get a letter from your plan’s provider showing the coverage dates. This also applies to your spouse if they were on your coverage and are over 65.
Please be aware that if you choose to go on COBRA (often provided for 18 months after the group coverage ends), COBRA and retiree health plans aren't eligible for a Special Enrollment Period when that coverage ends, only for the first 8 months immediately following the group coverage. It is important that you apply for Medicare within that first 8 month period or you could be facing Late Enrollment Penalties for life and potential gaps in coverage.
Also, find out what happens to your retiree coverage when you're eligible for Medicare. For example, retiree coverage might not pay your medical costs during any period in which you were eligible for Medicare but didn't sign up for it. Or, when you become eligible for Medicare, you may need to enroll in both Medicare Part A and Part B to get full benefits from your retiree coverage.
GENERAL ENROLLMENT
If you didn’t apply for Medicare when you were first eligible and you don’t qualify for a Special Enrollment Period, you can apply for Medicare during the General Enrollment Period which happens between January 1st and March 31st every year. If you apply during this period your coverage won’t start until July 1st, and you may have to pay higher premiums that include Late Enrollment Penalties.
Medicare options can be confusing and costly if not made in a timely manner. Deciding what to do and when can be confusing. if you live in NY or PA we are available for a no-cost, no-obligation consultation to help you through the process.
WHEN CAN I MAKE CHANGES?
SPECIAL ENROLLMENT PERIODS
Life happens, things change, sometimes affecting your Medicare coverage. Special Enrollment Periods (SEP) are for Medicare members that have events in their life that make it necessary to change their plans. Each category of SEP has its own rules about when and how you can make changes. But generally, SEPs usually only last two months after the event, so it is important that you make your choices soon after the change so that your coverage can continue without a lapse.
Here are three common examples of Special Enrollment Periods:
Leaving "Creditable Coverage"
If you leave a group plan that is "creditable coverage" you have two full months to apply for Medicare coverage and start a Medicare Advantage or Medicare Prescription Drug Plan.
You Move
If you move away from your plan's coverage area you are also given a Special Enrollment Period (SEP). This SEP gives you the right to choose a new plan in your new coverage area. You have two months after you tell your plan that you have moved to make your new selection.
You are eligible for Medicare and Medicaid OR you qualify for Extra Help paying for Medicare Prescription Drug Coverage
If you qualify for this SEP you are able to change, join or leave a Medicare Advantage or Prescription Drug Plan one time during each of the first three quarters of the year (January - March, April - June and July - September). Any changes during these times will be effective the 1st of the following month so a change in January would start effective February 1st. No more than one change per quarter is allowed. During the fourth quarter, October - December, any changes will be effective January 1st of the following year.
If you are wondering if you qualify for a Special Enrollment Period, we are here to help.
ANNUAL ENROLLMENT PERIOD
Once on Medicare you can make changes to your coverage during the Annual Enrollment Period (AEP) which is from October 15th to December 7th annually. Deductibles, copayments, and coinsurance as well as formularies, preferred pharmacies and medication costs are things you should consider and review annually to ensure that you still have the proper coverage for your budget and needs. Changes made during the Annual Enrollment Period take effect January 1st of the following year.