expertise & RESOURCES when you need it the most
Three months prior to your Medicare eligibility date is the time you want to consider what insurance plan is best for your situation in addition to prescription drug coverage. If you are age 65, your Medicare begins the 1st day your birth month regardless of the day your birthday falls (or the 25th month from your disability). This page will give you information on Medicare basics, but we recommend you talk to an agent in your service area. Please contact us for a name of an agent in your service area. There is no cost to you to work with an agent.
There are several parts to Medicare.
Part A is the hospital plan that also pays for limited home health visits and hospice care. Part B is the partial payment of doctors' care, tests, and other services. The Social Security Administration withholds a monthly fee for Part B which automatically comes out of your social security check. Depending on when you first applied for Part B and your current income, the fee for this part varies. If you are not collecting social security, but you are eligible for Part B, then you will be billed quarterly for Part B. Low income individuals may be eligible for a subsidy that pays the cost of the Part B Premium. Please contact us to determine if you are eligible and learn how to apply.
If you do not enroll in Part B when you are first eligible, you will be assessed a 10% penalty for every year that you did not enroll in Part B. This is a permanent penalty, which can be costly. There is an exception to this rule. If you are enrolled in an employer-sponsored health insurance plan either through your employer or your spouse's employer which is considered credible coverage. Once you retire or your spouse retires, you will then have a Special Election Period in which to enroll in Part B without penalty. You always want to check with your employer's benefits department if your existing coverage will remain the same, or if you are required to enroll in Part B. This is very important to insure that you are not penalized later for a late enrollment. If you a Veteran, please read our page on Veterans and Medicare to see how Part B applies to you.
Medicare Part A and Part B have deductibles and co-pays that can be expensive (see the Part A & B Deductibles below) . Enrolling in either a supplemental insurance plan or Advantage Plan is typically a good idea to help fill in the financial gaps. Medicare Supplements (Medi-Gap) works with original Medicare and typically pays the remaining 20% of Part B and 100% of the Part A deductibles. These plans are often referred to a Medigap Plans or Medicare Supplements. The advantage is you typically don't have any co-pays and typically don't have to be concerned about networks. Co-insurance and deductibles vary, depending your State and available plans. In 2020, newly eligible beneficiaries will be limited which plans they can choose to enroll in and the plans will no longer be able to offer payment of the annual Part B deductible.
Medi-Gap policy disadvantages are higher premiums and full underwriting unless you enrolled during your initial open enrollment period (when you first became eligible for Medicare). This often makes it difficult for seniors to switch insurance carriers if they have had any health issues making them un-insurable. Medicare Advantage Plans were designed to help with this situation.
Medicare Advantage Plans (also referred to as Part C or MA plans) only have one health question to qualify. If you have end-stage renal disease (kidney failure requiring dialysis) then you cannot enroll in the plan. If you develop ESRD while on the plan, you are covered and sometimes can move to different types of plans but must stay with the same insurance carrier. Medicare Advantage Plans are subsidized by Medicare which typically means your monthly premiums are lower but you may have a co-pay or co-insurance. This is also called "cost sharing".
Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs (which original Medicare does not) . Most plans offer a drug plan with the health coverage but there are plans that offer only the health coverage without drug coverage. This is a great option for Veterans who utilize the VA Medical Center for their primary services. Our page Veterans and Medicare explains this. Advantage plans come in a variety of plans like HMO, PPO, PFFS. It can be confusing of which plan is right for you. Please contact us to request a free consultation to help determine which plan is right for you. With MA plans, you do not retain Original Medicare, the insurance company becomes the primary payor, not Medicare, like traditional supplemental plans.
There are also "Cost Plans" which are a "hybrid" plan. You retain Medicare and you have choice of higher co-pays and lower premiums or a higher premium without co-pays. Cost Plans also offer extra coverage, such as vision, hearing, and wellness programs that make it a great alternative for many. The Affordable Care Act put an end to these plans as of January 1, 2019 unless you reside in an area in which there are limited options of Medicare insurance plans.
The main thing to remember is that plans and rules can change each year. It is especially important to be sure that your doctor accepts the plan and/or is in the "network". We recommend speaking to a licensed agent that can help you sort through the plans and help you decide what is best for you. Contact us to request a free, no-obligation consultation and/or quote.
Part D (Prescription Drug Plans)
Part D is the prescription drug plan which can either be a stand-alone drug plan (if enrolled in a Medicare Supplement, a Cost Plan, or PFFS plan), or integrated with your health plan. Medicare Advantage Plans (referred to as Part C), the drug coverage is part of your health plan. When you are first eligible for Medicare, you must enroll in a Part D plan or you will be penalized 1% for each month in which you were eligible for one, but did not enroll. This is a permanent penalty and could be very costly. The one exception to this rule, is if you are a Veteran utilizing the VA Medical Center...this is considered "credible coverage" and you do not need to enroll in a prescription drug plan. Veterans, we have a special Medicare page which may be helpful to read. Again, if you are enrolled in an employer's plan, this rule would not apply if the coverage is credible or comparable.
People who have low-incomes ($1561.25 per month for individuals or $2,113.75 for a married couple) are encouraged to apply for Extra Help. You can do this by calling Social Security at 1-800-772-1213 or follow this link: https://secure.ssa.gov/i1020/start
The Annual Election Period to select a different health and prescription drug plan is between October 15th and December 7th of each year. Your new plan then begins Jan 1st of the next year.
Are there other time periods to enroll?
Yes. You may be eligible to enroll during a Special Enrollment Period due to special circumstances. Circumstances like moving outside of your current service area, employment, a plan being dropped,losing Medical Assistance or a low-income drug subsidy, etc.
In addition, each year from January 1 to March 31, beneficiaries enrolled in Medicare Advantage Plans with prescription drug coverage (MA-PD plans) can switch to a different MAPD plan. Also during this time, you can disenroll from your MAPD plan and return to Original Medicare.
Eligibility Before Age 65
If you have received either Social Security Disability Income or Supplemental Security Income for the past two years, you will first be eligible for Medicare Part B on the 25th month of collecting disability benefits. You then choose either a Medicare Advantage Plan or a Medicare Supplement insurance plan. Some states only allow you to enroll in a Medicare Advantage plan. States that allows you to apply for Medicare and purchase a supplemental (Medigap) policy include:
California*, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Vermont*, Wisconsin
*In California, and Vermont, a Medigap policy is not available to those under the age of 65 with End-State Renal Disease (ESRD).
Also, if you qualify to collect disability income from the Railroad Retirement Board you qualify for Medicare early.
#1 Question we receive from people on disability is "Can I keep my Affordable Care Act plan that I'm currently enrolled in and not accept Medicare?"
Answer: No, you cannot. When you are eligible for Medicare, you must accept Medicare (A, B, and enroll in a drug plan). The only exception is if you are on a spouse's employer-sponsored plan and can remain on that plan. Always check with your spouse's benefit department as rules are different if it's a small business employer or an over 100 employee-company. Read more about penalties on Part B and Part D on this web page, or contact us for assistance with your specific situation.
Premiums and Deductibles for Part A & B for 2020:
If you are new to Medicare in 2020 most people will pay a rate of $144.60 per month ($135.50 in 2019). If you became eligible for Medicare Part B before 2020, your rate may not have changed.
Note: The income-related Part B premiums vary depending on the extent to which an individual beneficiary’s income exceeds $87,000 (or a married couple’s income exceeds $174,000). Listed below are the Part B premiums for higher income earners:
Part B Monthly Premium; Individual Filers Yearly Income:
Individuals greater than $87,000 and less than or equal to $109,000; Part B premium is $202.40
Individuals greater than $109,000 and less than or equal to $136,000; Part B premium is $289.20
Individuals greater than $136,000 and less than or equal to $163,000; Part B premium is $376.00
Individuals greater than $163,000 and less than or equal to $500,000; Part B premium is $462.70
Individuals greater than or equal to $500,000; Part B premium is $491.60 per month
Part B Monthly Premium; Yearly Income for Married and Filing Jointly:
Couples greater than $174,000 and less than or equal to $218,000; Part B premium is $202.40
Couples greater than $218,000 and less than $272,000; Part B premium is $289.20
Couples greater than $272,000 and less than $326,000; Part B premium is $376.00
Couples greater than $326,000 and less than $750,000; Part B premium is $462.70
Couples greater than $750,000 income; Part B premium is $491.60 per month
Part B Premium; Married and Live with Spouse at any time during year but file Separate Tax Returns:
Greater than $87,000 and less than $413,000; Part B premium is $462.70
Greater than or equal to $413,000; Part B premium is $491.60
2020 Part A & B Deductibles & Co-Pays:
Part A Inpatient Hospital Deductible:
Hospital Coinsurance (per stay in a 60 day benefit period): $1408
61-90 days: $352 per day
91-150 days: $704 per day
Skilled Nursing Facility Care Coinsurance (days 1-20) $0; Days 21-100 $176.00 per day
Part B Physician’s Deductible (per year) $198
NOTE: MedicareSupplements and Medicare Advantage plans may pay a portion or all of these deductibles. Please see your Summary of Benefits or Evidence of Coverage for plan specific details.
2020 Part D Premium Increases:
Medicare uses the income from the past 2 years to determine if you pay more for your prescription drug coverage.
If your filing status and yearly income in 2018 was...
Individual Filer $87,000 or less - you pay only your drug premium per month
above $87,000 up to $109,000 - you pay $12.20 + your plan premium per month
above $109,000 up to $136,000 you pay $31.50 + your plan premium per month
above $136,000 up to $163,000 you pay $50.70 + your plan premium per month
above $163,000 and less than $500,000 you pay $70.00 + your plan premium per month
$500,000 or above you pay $76.40 + your plan premium per month
Married Filer $174,000 or less - you pay only your drug premium per month
above $174,000 up to $218,000 - you pay $12.20 + your plan premium per month
above $218,000 up to $272,000 you pay $31.50 + your plan premium per month
above $272,000 up to $326,000 you pay $50.70 + your plan premium per month
above $326,000 and less than $750,000 you pay $70.00 + your plan premium per month
$750,000 or above you pay $76.40 + your plan premium per month
QUESTIONS OR NEED ADVICE?
Please contact usto speak to a licensed agent in your region. There is no cost or obligation.
Now is the time to speak to a licensed agent to determine if your plan will change in 2020 or if there are better options. October 15th to December 7th is the Annual Election Period. Contact us for assistance.
Medicare (not to be confused with Medicaid) is the health-insurance plan that is available to people 65 years of age and older and for people with a long-term disability. Medicaid is the medical assistance program available for low-income individuals. Health-care reform may push Medicare eligibility age to 67 in the near future and may also require a means-test to determine eligibility.
Medicare Supplements (Medi-Gap) will no longer be able to offer the Part B deductible rider as of 1/1/2020. If your Medigap plan currently pays the deductible, you will not be affected by this change.
The Annual Part B deductible will increase from $185 to $198.
Part B Premium for 2020 will be $144.60/mo