Medicare Explained

Updated: Oct 1, 2019

For complete information directly from Medicare, you can:

Call Medicare toll-free at 1-800-MEDICARE (1-800-633-4227) to speak to a live customer service representative 24 hours a day, 7 days a week — if you are hard of hearing or deaf, call Medicare’s TTY number at 1-877-485-2048 or, visit www.Medicare.gov


What is Medicare?

Medicare is the federal health insurance program for people who are 65 or older and are citizens or permanent residents of the United States.  Medicare benefits are also available for  younger people with some types of disabilities.


Medicare has two parts

Medicare Part A - Covers medically necessary inpatient hospital stays, care in skilled nursing facilities, hospice care and some home health care.


Medicare Part B - Covers certain doctors’ services, durable medical equipment (i.e. wheelchairs), preventative care, outpatient services, lab tests and x-rays, and ambulance services.


You may add additional coverage since Medicare only covers 80%.

You can add:

Medicare Supplement (Medigap)

Medicare Part D

Medicare Advantage (Medicare Part C)


At what age am I eligible for Medicare?


The age for Medicare eligibility depends on a few factors. There are two groups of people who are eligible for Medicare:

► People age 65 or older who are American citizens or legal permanent residents of the United States for at least five continuous years.

► People under 65 years old with qualifying disabilities or medical conditions.

Additionally, there also may be other special situations that allow you to apply for Medicare before age 65.


How and when to Enroll in Medicare

Turning 65 years old

► Automatically. If you are already getting Social Security or railroad retirement benefits, you will be contacted about three months before your 65th birthday. If you live in one of the 50 states, Washington, D.C., the Northern Mariana Islands, American Samoa, Guam or the U.S. Virgin Islands, you will automatically be enrolled in Medicare Parts A and B. Because a premium is required for Part B coverage, you will be given the opportunity to opt out of that coverage.


► If you don't get enrolled automatically into Medicare. You need to go to the nearest Social Security office and enroll or call Social Security at 1-800-772-1213 for more information about your Medicare eligibility and to sign up for Part A and/or Part B. TTY users can

call 1-800-325-0778. If you worked for a railroad or get RRB benefits, call the

RRB at 1-877-772-5772. TTY users can call 1-312-751-4701.


The Initial Coverage Election Period is a seven-month period beginning three months before the month you turn 65, and ending three months after your 65th birthday. The good news is that you can sign up and get Medicare coverage even if you don’t plan on retiring when you turn 65.


There are also special situations that allow you to apply for Medicare before age 65:

► You work for the government and became disabled before turning 65.

► You or an immediate family have permanent kidney failure.

► You or your spouse worked for the railroad industry.


We can help you with your Medicare questions, contact us.






If you already have Medicare

The Annual Enrollment Period begins each year in October 15 - December 7, but there are other time frames that also work for certain qualifying Medicare applicants. Remember, it is to your advantage to pay attention to deadlines and Medicare enrollment periods for all parts and situations that may affect you.


The Annual Enrollment Period is used to make next year changes to your Medicare Advantage and/or Medicare Part D plan. You can make a plan change during October 15 to December 7, but your new plan will start in January.




What’s covered and cost under Medicare?

Many times, coverage for tests, services and medical care items depends on where you live. However, some of these things are universally covered no matter where you live. Check the Medicare website for a list of those items.  You can also talk to a licensed agent to see why certain items are needed, and ask if they can be covered under Medicare.


Medicare Part A

Medicare Part A is hospital insurance that provides coverage for inpatient hospital care, as well as coverage for critical access hospitals and skilled nursing facilities (though not custodial or long-term care). It also covers hospice care and home health care so long as certain conditions are met.


Part A Cost

Most people become eligible for Medicare Part A free of charge by working and paying taxes long enough to earn enough Social Security credits. Social Security credits count toward social security Medicare eligibility for Medicare. Credits are earned by paying Social Security and Medicare payroll taxes while working.


Generally, 40 credits, equal to ten years (4 credits per year worked) of work from employment are required to receive Social Security benefits and qualify for premium-free Medicare Part A benefits. As of 2017, you earn one Social Security or Medicare work credit for every $1,300 you make. You can only earn a maximum of four credits each year, which means you need to earn $5,200 to earn the maximum four credits in 2017.

If more than 40 credits are earned over the years, the additional credits do not provide any added benefit. You may also qualify for Medicare if you are, or have been, a government employee who has paid Medicare payroll taxes during employment. If you do not have 40 credits, you will need to pay a monthly premium to be covered. If you have earned less than 30 credits, as of 2017 you must pay $413 each month, and $227 each month if you have earned between 30 and 39 credits.


Medicare Part B

Medicare Part B covers things like doctor services, outpatient care, and other medical services provided by clinics and laboratories. This includes lab tests, preventative services, surgeries, and doctor visits, as well as supplies (including wheelchairs and walkers) that are considered medically necessary to treat a disease or condition.


Part B COST - Part B requires a monthly premium.

Monthly premiums

Most people who sign up for Medicare Part B when first eligible pay at a minimum $135.50 each month in 2019.

Certain individuals must pay a higher premium each month for Medicare Part B if their Modified Adjusted Gross Income falls above a certain amount. The Income Related Monthly Adjustment Amount (IRMAA) is the additional amount added to monthly Part B premiums. The Social Security Administration looks at your income from two years ago to determine if an IRMAA should be added to your monthly premium.

For example, if your yearly income in 2019 was between $85,000 and up to $107,000 and you filed an individual tax return, then Part B costs $189.60 each month of 2019. The IRMAA varies based upon income, but the most one would have to pay for Part B in 2019 is $460.50 per month, which applies to individuals who earned more than $500,000, or a couple who filed jointly and earned more than $750,000 in 2019.


The Medicare Part B premium is ordinarily taken directly out of a Social Security, Railroad Retirement, or Office of Personnel Management retirement check, which means most people will not receive a bill.


If you do get a bill to pay for your Medicare Part A and/or B.

There are ways to pay these bills:

► Pay by check or money order. Write your Medicare Number on your

payment, and mail it with your payment coupon to:

Medicare Premium Collection Center

P.O. Box 790355

St. Louis, MO 63179-0355

► Pay by credit/debit card.

► Sign up for Medicare Easy Pay. This is a free service that automatically

deducts your premium payments from your savings or checking account

each month. Visit Medicare.gov or call 1-800-MEDICARE and to find out

how to sign up.

► Online bill payment. This is a more secure and faster way to make

your payment without sending your personal information in the mail.


Medicare Late Enrollment Penalty

Those who choose not to enroll in Part B and/or Part D, but later decide they want coverage, may have to pay a higher monthly premium for as long as they have Medicare (unless they qualify for a Special Enrollment Period). Unless you can prove you had creditable coverage.


The Part B monthly premium may increase by 10% for each twelve-month period of eligibility for Part B that was not elected. The penalty does not go away–you must pay it for as long as you have Part B.

Also, if you miss the initial enrollment period, you may have to wait to enroll at a specific, later time unless you qualify for a Special Enrollment Period. (For example, you may have to wait until the general enrollment period, which runs from January 1 to March 31, with coverage starting on July 1 of that year).


Why Do you need to add additional coverage to Medicare?

In Original Medicare (Medicare Part A & B), Medicare only covers 80% of the Medicare approved amount for services. It may be less than the actual amount a doctor or

supplier charges. Medicare pays 80% and you’re responsible for 20%.


If your stay at a hospital for an emergency, operation or other and your hospital bill is $100,000 Medicare pays $80,000 and you are responsible for $20,000.


Medicare plans to help you cover the 20% that Medicare does not cover:

Medicare Supplement Insurance (Medigap)

Medicare Supplement (Medigap) plan is an insurance policy sold by private companies that helps to pay for some health care costs not covered by Original Medicare Part A & B. This can include co-payments, coinsurance, and deductibles. To qualify for a Medigap policy, you must already be enrolled in Medicare Part A and Part B.


Cost of Medigap Plans

A monthly premium for a Medigap policy is required in addition to the monthly Part B premium. The cost varies widely based upon the benefits of the plan and the age, gender, and zip code of the individual enrolled. There can even be differences in premiums charged by various companies for exactly the same coverage.


Medigap policies are standardized

Every Medigap policy must follow federal and state laws designed to protect

you, and they must be clearly identified as “Medicare Supplement Insurance.”

Insurance companies can sell you only a “standardized” policy identified in

most states by letters A through D, F through G, and K through N. All policies

offer the same basic benefits, but some offer additional benefits so you

can choose which one meets your needs.


DON'T OVERPAY FOR YOUR MEDICARE SUPPLEMENT (MEDIGAP) PLAN. ALL MEDIGAP PLANS ARE STANDARDIZED (see Section 5, page 69 of the 2019 Medicare & You book).


Get a Free Quote for Medicare Supplement (Medigap) Plan F, G, N, or other.


GET HELP WITH YOUR MEDICARE SUPPLEMENT (MEDIGAP) PLAN. CONTACT US



Medicare Part D

Medicare Part D is prescription drug coverage that helps cover the cost of prescription drugs. You can get Medicare prescription drug coverage two ways:

► Medicare Prescription Drug Plan (Part D) – These plans add drug coverage that work alongside of your  Original Medicare (Part A and/or B),  some Medicare Cost Plans, some Private-Fee-for-Service-Plans, and Medicare Medical Savings Account Plans.


► Medicare Advantage Plan (Part C) – Many Medicare Advantage Plans include prescription drug coverage as part of their benefits, though not all do. These Medicare Advantage plans are known as Medicare Advantage Prescription Drug Plans (MAPD) and you must have both Medicare Part A and Part B to enroll in a Medicare Advantage Plan.

Medicare Part D is only available through private insurance companies that are approved by Medicare.

Your monthly plan premium and out-of-pocket costs for prescription drugs will vary from plan to plan since different insurance companies offer different types of plans. All Medicare Prescription Drug Plans have a formulary which is a list of covered drugs.  Please note that the formulary may change at any time but, you will receive notice from your plan when necessary.

Medicare Part D also covers certain vaccines that are not already covered under Part B.



Cost of Medicare Part D Plans

Most Medicare Prescription Drug plans charge a monthly premium that varies by plan.  You will make the following payments throughout the year:

► Monthly premium (which is in addition to the Part B premium) (certain individuals with higher incomes pay a higher premium).

► Yearly deductible, if there is one.

► Co-payments/coinsurance (these differ according to the plan chosen and are paid after meeting the deductible).

► Costs in the coverage gap (also called the “donut hole”). Donut Hole is when you and your plan have paid a certain dollar amount during the year (a limit) for covered drugs. After you hit this limit, you then pay more out-of-pocket for drugs until you qualify for catastrophic coverage.

► Catastrophic Coverage - you only pay a small coinsurance or co-payment for the remainder of the year. The discount you receive on drugs and amounts you pay count towards the out-of-pocket limit.


GET A FREE QUOTE for MEDICARE PART D (Prescription Medications)


WE CAN HELP YOU WITH YOUR MEDICARE PDP PLAN. CONTACT US





MEDICARE ADVANTAGE PLANS

Medicare Advantage Plans are plans offered by private insurance companies approved by Medicare that must offer the same level of coverage as Original Medicare. The most common types are Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Private-Fee-for-Service (PFFS) plans.

Medicare Advantage Plans include coverage for all Part A and B services in one plan (except hospice care and some care in qualifying clinical research studies) and in most cases also include coverage for Part D (Prescription Drugs).


Medicare Advantage Plans may offer more coverage than Original Medicare with additional benefits, including vision, hearing, dental, and other health and wellness programs. Not all plans offer these benefits.


To enroll in an optional Medicare Advantage (Part C) Plan, you must first enroll in both Medicare Part A and Part B. Generally, if you have Medicare Parts A and B and you live in the area of coverage you will be eligible to enroll.


Medicare Advantage Cost

Some Medicare Advantage Plans may offer zero-dollar premiums ($0) but you must still continue to pay your Part B premium.

Medicare Advantage Plans establish the amounts they charge for premiums, services, co-payments, and deductibles. For example, you may pay more per month for a smaller deductible or for cheaper doctor visit co-payments.

Benefits, premiums, co-payments and co-insurance may change on January 1 of each year.


Enrollment in Medicare Advantage Plan

► During your Initial Enrollment Period (when you first get Medicare).

► The Annual Election Period is from October 15 through December 7 each year. The AEP is also known as  the Open Enrollment Period for Medicare Advantage and Medicare prescription drug coverage and allows you to make changes to your Medicare coverage for the following year.

► You can also enroll during Special Enrollment Periods SEP, if you have a qualifying life event (e.g., moving out of your plan’s service area or if your plan changes its contract with Medicare, among others).  The rules are different for each SEP about when you can make changes and the type of changes you are allowed to make.

► You can switch to a 5-star Medicare Advantage Plan (or Medicare Cost Plan, or Medicare Prescription Drug Plan) once, between December 8 and November 30 as long as you meet the other requirements to enroll in that plan (e.g. living within the service area as well as requirements regarding end-stage renal disease.


We can help you compare Medicare Advantage Plans so you can pick the plan that will cover your Doctor(s), Hospital(s), medications, and offer the additional benefits that meets your medical needs. The tools available to us as Medicare Certified agents, we will prepare a detailed comparison of Medicare plans.


Contact us.





MEDICAID

Your State may help you with Medicare medical and prescription drug cost if you meet your State's low income and limited resources.

It is a joint program of the federal government and state governments. The federal government largely funds the program, but Medicaid is administered by state governments, and coverage may vary from State to State. Low Income individuals with Medicare can apply for Medicaid. If individuals qualify for Medicaid, the state will pay for the Medicare Part B monthly premium. Individuals will save $135.50 ($1,620 a year) per month since Medicaid will pay for it every month. In addition, Medicaid will pay the 20% not covered by Medicare for hospital, doctor, emergencies, ambulance, and other medical services covered by Medicare.


Individuals with Medicare and Medicaid will have to add Medicare Part D (Prescription Drugs) plan or a Medicare Advantage plan with Part D and additional benefits like Dental, Vision, Hearing, Transportation, Gym, and other services.


There are four kinds of Medicare Savings Program (MSP):

► Qualified Medicare Beneficiary (QMB) Program.

►Specified Low-Income Medicare Beneficiary (SLMB) Program.

► Qualifying Individual (QI) Program.

► Qualified Disabled and Working Individuals (QDWI) Program.


Generally, you must earn less than a certain amount per month and not own personal assets that exceed a particular amount to qualify. (Personal assets include cash, stocks and bonds. Not included in the personal asset calculation are one house, car, and personal belongings such as clothing and furniture).


Ask your state’s Medicaid office if you meet eligibility requirements.


How to get more information about Medicare

To get further information about Medicare, go to www.medicare.gov or call Medicare toll-free at 1-800-MEDICARE (1-800-633-4227) to speak to a live customer service representative 24 hours a day, 7 days a week.  If you are hard of hearing or deaf, call Medicare’s TTY number at 1-877-485-2048.



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