Getting Started With Medicare
Getting started with Medicare is not a complicated process. Anyone turning 65 or enrolling in Medicare for the first time for any reason can use our guide to understand the process. You will also find guidance on the choices you have to make. We will cover the process from start to finish. Learn if you need to enroll in Medicare Part B or not. Should you enroll in a Medicare Advantage plan (MAPD), Medicare Supplement or a Part D prescription drug plan (PDP). Read below to find out. While we feel our getting started with Medicare guide is much easier to understand, Medicare also has information on how to get started. You can review that by clicking here if you would like a different opinion.
Getting Started With Medicare “quick guide” for those that do not want to read everything below –Click here for Medicare Quick Start Guide
Getting started with Medicare: Outline of the process and steps to take:
- When you are eligible for Original Medicare and costs
- Should you enroll in Part B of Original Medicare?
- Medicare Part A Benefits
- Medicare part B Benefits
- Explaining Medicare parts C and D
- Understanding a Medicare Supplement and Part D drug/Rx plan (Medicare part D)
- Understanding a Medicare Advantage plan (Called Medicare part C)
- Comparing Advantage plans vs. Medicare Supplements and stand alone Medicare part D drug plans
- The process to enroll in a plan and when it can be done
- Working with an independent broker/agent
- When can you change plans?
- Medicare Part D coverage gap
- Medicare Part B and D penalties
- Coverage when you have VA benefits
- Getting started with Medicare other resources and Medicare Supplement benefit description
When you are eligible for Original Medicare and costs
The first step to getting started with medicare is to learn about Medicare A and B. You are eligible for Medicare the first of the month you turn 65. If someone has a birthday on June 20th, they will be eligible for Medicare A and B on June 1st. Some people may be eligible for Medicare prior to turning age 65 due to disability. Keep in mind Medicare benefits and Social Security payments are two different things. You do not need to take Social Security payments in order to enroll in Medicare benefits. If you are drawing Social Security payments at the time you turn 65, you will automatically be enrolled in Medicare A and B. If you are not taking Social Security payments at the time you turn 65 you will be enrolled in Medicare Part A only. You will need to elect part B to be enrolled. Enrolling in Part B can be done at your local social security office or online through the Medicare.Gov website. The online enrollment is very easy to use. CLICK HERE FOR SITE TO ENROLL IN MEDICARE PART B Note: This is the Social Security site but you can enroll in Medicare only on this site.
Most people will pay nothing for Medicare Part A. (There is no cost for part A as long as someone worked at least 10 years on the books paying FICA tax. You can also qualify through a working spouse that put in at least 10 years) Just about everyone will pay for Medicare part B however. The standard Medicare part B premium for 2018 is $134 a month per person. If you are receiving Social Security payments, your part B premium will be taken out of your check every month automatically. If you are not taking Social Security payments, you will be billed for Part B quarterly. Some people pay more for part B if they make over certain amounts of income. We will review that later in this post. Some may not pay part B at all if they receive “Extra help” or are enrolled in a Medicare Saving Program. Again, more on that later.
Should you enroll in Part B of Original Medicare?
The quick answer to this question is it depends. Anyone that wants to enroll in a Medicare Advantage plan or a Medicare Supplement must also be enrolled in Medicare part B. (You don’t need to have B to enroll in a stand alone part D drug plan only.) There are times when you may not want to take Medicare part B however. This usually comes up when someone is 65 or older but they get coverage through their employer or through the employer of a spouse. If you are getting coverage from an employer, you may keep that coverage and may not be required to purchase part B (saving you $134 a month) If at any time down the road you lose access to that employer plan, you can then sign up for Medicare part B through a special election to do so. You have 3 months to enroll in part B once you lose coverage. (the month you are notified and two months after that) Be careful, if you don’t sign up when eligible for a special election you will need to wait and sign up during the general Medicare Part B enrollment period. You many need to pay a penalty for the rest of your life. The part B general enrollment period runs from Jan 1 through March 31 for a July 1 start date.
One other special rule to consider when getting started with Medicare. If you have coverage through your work or your spouses work, one of you must be actively working. Part B is not needed if actively working but if the spouse getting the coverage through work retires, you must sign up for Part B within two months, even if your employer is still offering coverage. Failure to do so can lead to a life long penalty. CLICK HERE TO LEARN MORE ABOUT THIS TOPIC
Medicare Part A benefits
Medicare Part A provides Inpatient hospital benefits, Skilled nursing and home health care benefits. Medicare part A has an inpatient deductible fo $1340 per benefit period for 2018. Means you pay the first $1,340 out of your pocket. You are then covered in full for the next 60 days and have a cost share per day after that. Most people do not pay a premium for Medicare part A. If you do pay a premium is will be $422 a month. A benefit period is 60 days and ends when you have not had a skilled nursing or inpatient hospital services for 60 days.
Medicare Part B benefits
Medicare part B costs most people $134 a month for 2018. Medicare part B covers outpatient services and part B drugs. Outpatient services are things like doctors visits, lab work, scans, testing, specialist visits and outpatient surgeries. There is an annual deducible of $183 for 2018 which means you pay the first $183 of cost and then you are covered at 80%. Keep in mind, it is 80% of what Medicare allows and not what the doctor charges. This means the 20% you pay will be a lot less than 20% of what is initially charges. Our getting started with Medicare guide is not going to cover all the details on Medicare A and B. A link has been provided below with more detail.
Explaining Medicare parts C and D
Ok…it is easier to start with Medicare part D. Medicare part D is the drug coverage portion of Medicare. Medicare A and B do not provide drug coverage. If you want to have drug coverage, you must buy a stand alone part D drug plan from a private insurance company or you can get it built-in with a Medicare Advantage plan. Medicare does not provide you with a plan. They must be obtained through a private insurance company. You are able to have Medicare A and B for your Medical and then buy a stand alone part D drug plan.
Medicare Part C is a Medicare Advantage plan. They are private plans offered by insurance companies and they usually have drug coverage included. This means they include the Medicare Part D benefit. If you enroll in a Medicare Advantage plan (MAPD) you are using that plan instead of your Medicare A and B. Medicare Advantage is an alternative to using Medicare A and B as your medical benefits. The Advantage plan becomes your primary and secondary Medical and drug coverage. (assuming you get an MAPD that includes Medicare part D coverage) When you are enrolled in an MAPD plan, your Medicare A and B benefits are not used. The MAPD and its benefits are your coverage. You cannot buy a stand alone Medicare part D drug plan and also have the advantage plan. More on this later.
Understanding a Medicare Supplement and Part D drug/Rx plan (Medicare part D)
So Orginal Medicare A and B provides medical coverage. It does not cover all costs however. Medicare Part A has a deductible and cost shares and Medicare part B covers at 80% leaving you paying at 20%. There is no out-of-pocket cap on your costs with Medicare A and B. One of the ways to cover what Medicare does not is to buy a Medicare supplement plan. They are also called Medigap plans. Same plans but different names. A Medicare supplement covers after Original Medicare pays. When you go to any medical provider, they will bill Original Medicare. Medicare will pay their portion and the remainder would be sent to your Medicare supplement plan. The supplement you choose will determine how much of the remainder will be covered. Some plans such as plan F cover all approved Medicare costs. You will need to pay a monthly premium for the Medicare supplement plan. Medicare supplements are secondary to Original Medicare so you are able to see any medical provider that accepts Original Medicare. Medicare supplement plans are standardized in most states. What is a standardized Medicare supplement?
Medicare Supplements do not cover prescription drugs so you could choose to buy a stand alone part D drug plan (PDP) from a private company. The stand alone plan will also have a monthly premium. You will use the PDP id card at the pharmacy for your drug coverage. Please note that stand alone PDP plans are not all the same. Time should be taken to find the one that covers your specific medications the best.
This set up will have you using 3 cards, Original Medicare A and B card and Medicare supplement card for Medical services and a stand alone Part D card for drug coverage. You will also pay 3 monthly premiums. Your part B premium, Medicare supplement plan premium and the stand alone part D (PDP) plan premium.
Understanding a Medicare Advantage plan (Called Medicare part C)
Medicare Advantage plans are completely different from Original Medicare A and B and a supplement. A MAPD plan looks and works similar to an employer group plan. The plan has copays for services such as primary and specialist visits, lab work, scans and other services. There are larger copays for major services such as inpatient hospital stays. Drug coverage is included in most advantage plans so you do not buy a stand alone drug plan.
When you use an MAPD plan, the plan is your primary and secondary insurance. Medicare A and B is removed as your primary insurance. As a result, medical providers will bill your MAPD plan. An MAPD plan can be very low-cost with plans as low as $0 per month. The trade-off is you have copays, medical management and networks you must stay in with MAPD plans. You cannot have an MAPD plan and a Medicare supplement at the same time and you cannot have an MAPD plan and purchase a stand alone PDP plan. This is the case even if you buy an Medicare Advantage plan without prescription drug coverage. Our getting started with Medicare guide is a brief description of MAPD plans. Use the links below to learn more.
Comparing Advantage plans vs. Medicare Supplements and stand alone Medicare part D drug plans
Click here to watch a recorded webinar on the difference between a Medicare Advantage plan and a Medicare supplement plan and drug plan.
The process to enroll in a plan and when it can be done
- You will automatically be enrolled in Medicare part A when you turn 65. If you are already taking Social Security payments, you will automatically be enroll in part B as well. Regardless of which day of the month you turn 65, you’re Medicare A and B start date will be the first of that month. If you are not taking Social Security payments, you will need to enroll in Part B through the local Social Security office or online at https://www.ssa.gov/benefits/medicare/
- Keep in mind that most people pay $134 a month for Medicare Part B. If you draw Social Security (SS payments) it will be taken out of your check every month. If you do not take SS payments, you will be billed quarterly.
- Some people pay more for Medicare part B based on their income from 2 years previous to the current year. A chart has been provided for your reference https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html
- Once you have Medicare A and B, you can determine which type of plan you want to provide drug coverage and how you want to cover the Medical portion not covered by Original Medicare.
- You could enroll in a Medicare Advantage plan up to 3 months prior to the month you’re Medicare A and B starts. If you do not want to go with a Medicare Advantage plan, you can enroll in a Medicare Supplement and PDP plan. Watch this webinar on the differences between Medicare Advantage and a Supplement and drug plan https://attendee.gotowebinar.com/recording/3186855675807336449
- Once you determine the plan type you want, you should speak with an independent agent to find the best price or fit for your specific situation. Any application that goes in the first 3 months before you turn 65 will start on the first of the month you turn 65 to coincide with your Medicare A and B start dates. If you put in an application during the month you turn 65 it will start the first of the next month. You have 3 months after you turn 65 to put an application in. Medicare enrollment when turning 65 is guaranteed issue. They cannot block you due to health conditions.
- There is an opportunity to change the plan you are in every year during the Medicare Open Enrollment Period. This runs from October 15th through December 7th every year. Any change you make will take effect on January 1st
Working with an Independent agent or broker
An Independent Medicare Insurance Broker does not work for any insurance company. They often run their own insurance agency and many are contracted with all the major insurance companies or at least those with the most competitively priced products in your area. Because the independent Medicare insurance agent or broker can work with any of the companies available, they can show you all the plans that are available to you, the prices from multiple companies and the prices from each of these companies. A good independent agent will work in your best interest, finding the right plan and best price for your situation. It doesn’t matter which plan you choose, or company because the independent Medicare insurance broker can help you with any option you choose and get paid to do so. Note that some agents may only work with one or two companies. Make sure you ask your independent agent for a list of the insurance companies they are contracted to represent. You want to be sure they can offer a good selection.
You will not need to pay the independent Medicare insurance agent or broker. They are paid a commission by whichever company you choose to get your Medicare supplement through as long as the broker helps you with the application process.
Rates do not change when you worth with an independent agent or broker. You pay the same price whether you go directly to an insurance company, use one of their internal agents or have an independent broker help you. The independent Medicare insurance broker is paid to introduce your business to the insurance company.
When can you change plans?
Each year, you have a chance to make changes to your Medicare Advantage or Medicare prescription drug coverage for the following year. There are 2 separate enrollment periods each year you can utilize to make a plan change.
Medicare Open Enrollment Period runs from October 15th to December 7th every year. Any change you make will take place for a January 1st start date.
- Change from Original Medicare to a Medicare Advantage Plan.
- Change from a Medicare Advantage Plan back to Original Medicare. You can also apply for a Medicare Supplement and/or Part D Rx plan at this time.
- Switch from one Medicare Advantage Plan to another Medicare Advantage Plan.
- Switch from a Medicare Advantage Plan that doesn’t offer drug coverage to a Medicare Advantage Plan that offers drug coverage.
- Switch from a Medicare Advantage Plan that offers drug coverage to a Medicare Advantage Plan that doesn’t offer drug coverage.
- Join a Medicare Prescription Drug Plan.
- Switch from one Medicare drug plan to another Medicare drug plan.
- Drop your Medicare prescription drug coverage completely.
Medicare Advantage Disenrollment Period (MADP) runs from January 1 through February 14th. During this time you can….
- If you’re in a Medicare Advantage Plan, you can leave your plan and switch to Original Medicare.
- If you switch to Original Medicare during this period, you’ll have until February 14 to also join a Medicare Prescription Drug Plan to add drug coverage. You can also apply for a medicare supplement at this time. Your coverage will begin the first day of the month after the plan gets your enrollment application.
Here is what you can’t do during the MADP
- Switch from Original Medicare to a Medicare Advantage Plan.
- Switch from one Medicare Advantage Plan to another.
- Switch from one Medicare Prescription Drug Plan to another.
- Join, switch, or drop a Medicare Medical Savings Account (MSA) Plan.
Special Election Periods
Special Election Periods (SEP’s) are times you can make plan changes during the year outside of the OEP and MADP time frames. There are numerous SEP’s but the more common ones are.
- Moving out of the current plans service area
- Losing drug help or Medicare Savings Program in your state
- Losing group coverage or retiring from work and losing coverage
- Medicare Advantage Trial Right CLICK FOR TRIAL RIGHT INFO (Topic number 6 starting on page 8)
Note: The getting started with Medicare guide hit on some of the SEP’s but there are others. Please use the link above to view all available special election periods.
Medicare Part D coverage Gap
When you get PDP coverage from a stand alone Medicare Rx plan or from the drug coverage in a Medicare Advantage plan, you will need to be aware of the Rx coverage gap. This is also called the Part D donut hole. The coverage gap runs from January to January and reset every year. It is based on the amount of money you and the insurance company pay for prescriptions. Once you and the insurance company spend a combined $3,750 on Rx costs, you will go in the coverage gap. In the gap you will pay 35% of the brand drug costs and 44% of generic drug costs. Once the out-of-pocket threshold of $5,000 is met you will go to the catastrophic level and will pay $3.35 for generic drugs, $8.35 for brand drugs or 5% whichever is greater.
Medicare part B and D penalties
Medicare part B has a late enrollment penalty for those that did not enroll in Medicare part B when eligible to do so. If they have a valid waiver for part B they would not pay a penalty. The penalty is 10% of the annual premium and is paid for as long as the person is enrolled in Medicare part B. If you or a spouse are working and getting coverage through work, you may not need to sign up for part B. Once the spouse that is primary with the coverage retires, both the spouse and dependent must sigh up for Part B even if the group is still offering coverage.
If someone did not sign up for Medicare Part D Rx coverage when they first became eligible, they will have penalty when they do decide to sign up for a plan. The penalty is 1% of the monthly benchmark premium. Benchmark premium varies by state and ranges from $25 to $50 a month. 1% of $50 is $.50 so a person that went 10 months without coverage will pay a penalty of $2.50 in additional to their drug plan premium every month for as long as they have a plan. CLICK FOR BENCHMARK PREMIUM BY STATE
Coverage when you have VA coverage
VA coverage is completely separate from Medicare. Usually members can use VA benefits for Medical services and Rx coverage. It may make sense to enroll in a $0 premium Medicare Advantage plan for situations when you want to get coverage outside of the VA. The Medicare Advantage plan will cost nothing and will have no interaction or negative effect on the VA coverage. VA docs are not part of the Medicare program so they do not need to be in the network of the advantage plan. Please note that VA benefits will not coordinate with Orginal Medicare A and B, Medicare Supplements or Medicare Advantage plans.
Getting started with Medicare: Next Steps are to call your independent sales agent
Hopefully our getting started with Medicare guide has been helpful. At this point you should contact your Independent Medicare agent to talk about the specific plans and companies that can provide the best plan for you.
Other resources for getting started with Medicare and Medicare supplement benefit description
Getting started with Medicare: Medicare supplement benefits flow chart: Click for Medicare supplement benefits by plan chart
The National Council on Aging also has good resources and information for those getting started with Medicare. Click for the site
The CMS website has info on the basics of starting Medicare A and B which is helpful for those getting started with Medicare. Click for Site
Getting started with Medicare: HSA plan contributions. Be sure not to contribute to an HSA if you have Medicare A and/or B Click to read more