Congratulations on reaching a significant milestone in your life! One of the biggest benefits of turning 65, and becoming Medicare Insurance eligible is now you qualify for Medicare Part A (hospital Benefits) and have the option to request Medicare Part B (Medical Benefits) if applicable. However, with so many available options in the industry today, many people are not sure how Medicare works and what they should do next. 

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This Special Edition newsletter will help you gain a better understanding as to what you'll need to consider in moving forward. By now, you've probably received tons of mail from insurance carriers and agents; and trying to pick one over the other can be a challenge. As an annually trained and certified Medicare Insurance Broker, I am here to answer all questions and concerns you may have about the Medicare process and how to navigate this maze through the multitude of options.

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Original Medicare (Parts A and B)

Signed into law on July 30th, 1965, Original Medicare is a Federal Health Insurance program, administered by (CMS) the Centers of Medicare & Medicaid Services. With only Original Medicare (Part A & B) insurance, you will pay the designated year's annual deductible amount and other costs, and Original Medicare insurance will cover 80% (Share of Cost) toward your bill. Afterwards, you are now financially responsible for the remaining bill's balance at a 20% (Share of Cost). This concept remains in place as an unlimited financial responsibility with no financial cap on the amount of your financial responsibility. 

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Realistic-example:

Let's assume your insurance plan is only with Original Medicare insurance  and a test result comes back revealing you have a malignant tumor and will need surgery. The medical cost can be over $200,000, but because you only have Original Medicare insurance your 20% (Share of Cost) for that bill would be over $40,000. However, please note, there are several options to consider that will protect you financially regarding the 20% share of costs that Original Medicare Part A & Part B insurance will not pay, and I'll share with you about ways to limit this financial risk. 

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Medicare PART A (Hospital Insurance)

Medicare Part A will help cover costs of your inpatient hospital stays, skilled nursing facility care, and in-home care. As long as you have paid into the Medicare tax for 40 quarters / 10 years while working in the United States your Part A monthly premium is free. However, the Part A deductible, copays and coinsurance remains your financial responsibility. 

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Medicare PART B (Medical Insurance) 

Medicare Part B covers your doctor & specialist visits, x-ray, lab tests, including outpatient care and treatment at hospitals and clinics, and some skilled nursing care. There is a seventh month window (if applicable) when you are required to request and enroll into Medicare Part B. That is three months before your 65th birthday, your birthday month and three months after your birthday. If you fail to enroll during this period, you will incur a 10% late-enrollment penalty. In addition to a penalty, there is a monthly premium for Part B that you are required to maintain. However, if you qualify, special Part B enrollment periods are available as an option. 

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Medicare PART D (Prescription Drug Coverage) 

Part D Prescription Drug plans are offered by private insurance carriers, and depending how the carrier's formulary is structured will determine the tier pricing of a medication, which aids in establishing your co-pay cost of a prescribed medication. Please note, that not all formularies are structured or priced the same and are subject to annual changes, and Original Medicare Part A and B insurance alone does not cover prescriptions. You may have read that Part D prescription drug coverage is optional, however, many people who do not take prescribed medications decide not to enroll into a prescription plan. WORD OF WARNING: If you do not enroll in a prescription drug coverage plan when you first become eligible, unless you qualify for a special allowance, you will be assessed a penalty that will stay with you the rest of your life! 

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For example: when a member turns 65 and is not taking any prescribed medications, they may decide  not to enroll in a Part D plan. However, at age 69, their doctor prescribes an expensive medication and they decide that they now want to enroll into a Medicare Part D plan. Shortly following their enrollment, they receive a letter from the center for Medicare-Medicaid Services (CMS) informing them of their lifetime late enrollment penalty. 

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Medicare Supplement (Medi-Gap Insurance)

Medicare Supplement Insurance also known as Medigap plans, are structured to help you pay for some or all the costs that Medicare Parts A and B does not cover, e.g. deductibles, copays, coinsurance expenses. The nice part is, you can see any doctor, any specialist in the country without a referral as long as they participate in Medicare, and accept the fee for service terms and conditions of Medicare and accept these types of plans. Please note, in order to stay enrolled in a Medi-Gap plan you are required to keep paying your Medicare Part B premium in addition to the Medi-Gap plan and stand-a-lone Part D premium.  Furthermore, when you turn 65, you initially have a guaranteed issue (no health underwriting required); as a result, you are automatically approved for the supplement plan of your choice with an annual 'guaranteed renewable' meaning your Medi-Gap policy renews automatically from year to year as long as you pay the premium on time. 

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Medicare Advantage Prescription Drug Plans (Medicare Part C Insurance)

Medicare Part C also know as Medicare Advantage (MAPD) plans, Medicare Advantage (MA) plans, Special Needs Plans (SNP) and Private Fee for Service (PFFS) plans, are offered by private Medicare Insurance companies. As a result, private insurance companies are required to offer plan benefits similar to the benefits offered by Original Medicare Part A and Part B benefits. With a Medicare Part C - HMO plan you are required to choose a primary doctor (PCP) who has access to a network of specialists and hospitals that are a part of your Primary doctor's team, as long as they participate in the same Medical Group / Network. Many of the private insurance company plans offer numerous additional benefits not offered with Original Medicare Part A & Part B insurance. For example, but not limited to: Vision, Dental, Hearing benefits as well as a complementary Gym Membership. Although you'll be required to continue to pay your Part B premium, please note that many Medicare Part C plans, offer a low or even $0 monthly premiums, as well as an annual out-of-pocket maximum limit that will protect you financially.

 

                                                                                            **INITIAL ENROLLMENT PERIOD**

Your initial enrollment period begins 3 months before your 65th birthday, the month of your birthday and 3 months after you turn 65, for a total of 7 months. During this period most people who have paid 10 years into the Medicare tax, as well as start their Social Security Benefits, will receive their Medicare Part A (Hospital insurance) red, white and blue card in the mail at no cost. However, if you've elected not to start your Social Security Benefits during this period, before your Initial Enrollment Period (IEP) starts, you'll need to sign up for your Medicare Part A & B online at: www.ssa.gov or visit your local Social Security Office. To get the most from your Medicare Insurance, and avoid the Part B late enrollment penalty, and if you are not currently enrolled in a health insurance plan either with your employer, or spouse's health insurance, consider requesting your Medicare Part B benefits during your Initial Enrollment Period (IEP). Failure to apply for Part B in a timely manner, means a lifetime penalty will be added on top of your monthly Medicare Part B premium. Please note: Special Part B Late Enrollment Penalty Rules do Apply: If you're not sure about your situation, please feel free to contact me to find out if and when you should request Part B based on your personal situation. 

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