Most beneficiaries have many Medicare questions when they’re newly eligible for the federal healthcare program. After all, you’ve paid into it your entire working career so far, now it’s time to use it. If you’re about to take the next step in enrolling in Medicare and/or a Medigap plan, here are the answers to the most frequently asked Medicare questions.
How Does Medicare Work
Medicare works by providing seniors 65 years or older, as well as those with certain disabilities & illnesses, federal healthcare coverage. Some qualifying disabilities include Lou Gehrig’s disease and end stage renal disease.
Medicare has four parts:
- Part A: known as hospital coverage, Part A covers hospitals, home health services and nursing facilities.
- Part B: known as medical coverage, Part B covers preventative services including doctor visits, medical equipment and diagnostic tests.
- Part C: also known as Medicare Advantage, Part C replaces Part A & Part B.
- Part D: also known as stand alone prescription drug plans or PDP plans.
What Does Medicare Cover
Your Medicare Part A benefits will cover any hospital expenses that are crucial to your inpatient care. Covered expenses include semi-private room, nursing services, meals and any medications that your doctor prescribes during your stay in the hospital.
Medicare will only cover 80% of Part B services. This includes preventive care, durable medical equipment, mental health services, etc. You’re responsible for the remaining 20%, as well as co-pays and deductibles.
Medicare Part C provides all your Part A & B benefits. It may also cover additional benefits such as routine dental care, vision services and prescription drugs. While Part C may have a zero dollar premium, it also comes with many network restrictions, limitations on medical services and higher out of pocket costs.
Stand alone Medicare Part D covers prescription drugs.
How Much Does Medicare Cost
Sometimes, new beneficiaries are told that Medicare is free, unfortunately that’s not entirely true. Original Medicare does come with certain cost.
If you’ve worked at least 10 years, or 40 quarters, you do not have to pay a premium for Medicare Part A. If you paid into Medicare taxes for less than 30 quarters, you’ll pay the standard premium of $422 per month in 2018. If you paid into Medicare taxes for 30-39 quarters, you’ll pay a premium of $242 per month. If you don’t enroll in Part A when you first become eligible, you may have a late enrollment penalty when you do enroll.
For Medicare Part B, C & D, you’ll have to pay a premium. Most beneficiaries Part B premium is $134 per month in 2018, with an annual deductible of $183. If you’re a higher-income beneficiary (IRMAA), your premiums will be more.
All Medicare Part C plan premiums come at their own cost. Some have zero dollar premiums and some do not. However, your maximum out-of-pocket spending limit will not exceed $6,700. Keep in mind, there are many limitations with Medicare Advantage plans including network restrictions.
Your Medicare Part D Prescription Drug Plan premium is determined heavily by your income, as well as the plan you choose. In 2018, the average Part D premium ranges from $20-$85.
When Does Medicare Start
Medicare starts when you turn 65. Most Medicare beneficiaries are automatically enrolled in Part A when they turn 65 years old. It’s not uncommon for beneficiaries to also be automatically enrolled in Part B. You’ll automatically be enrolled in Part A and B if you’re already receiving Social Security or Railroad Retirement benefits.
The start date of your Medicare coverage will depend on your birthday. If you sign up during the first 3 months of your Initial Enrollment Period, or are automatically enrolled, coverage will start the first day of the month you turn 65.
The only exception is if your birthday is on the 1st day of the month. In this case, your coverage will begin the first day of the month before you turn 65.
If you’re under the age of 65 and on disability, you’ll be automatically enrolled in Part A and B if you’ve been receiving Social Security or Railroad Retirement benefits for 24 months. However, if you have ALS, you’ll start receiving Part A and B coverage the month your disability benefits begin.
When Do I Sign Up for Medicare
In the case you’re not automatically enrolled, you should sign up for Medicare during your Initial Enrollment Period. It begins 3 months before your 65th birthday, includes the month of your birthday and continues 3 months after your birthday.
Please note, unless you qualify for a Special Enrollment Period, you’ll have to pay a late enrollment penalty for Part B if you don’t sign up or are not automatically enrolled when you’re first eligible. Your monthly premium will increase by 10% for every 12 month period you were eligible.
If you didn’t sign up when you were first eligible, and are not eligible for a Special Enrollment Period, you can sign up during the General Enrollment Period. The GEP is between January 1st and March 31st each year.
How to Sign Up for Medicare
To sign up for Medicare, you can apply online in less than 10 minutes on Social Securities website, SSA.gov. There’s usually no documentation to provide and no forms to sign. The Social Security office will process your application and contact you if they need anymore information.
If you’re enrolled in Part A, but not Part B, you can sign up for Part B by completing the CMS 40B form on CMS.gov.
How Can I Get Help with My Medicare Costs?
Most Medicare beneficiaries also enroll in Medigap, also known as Medicare Supplement insurance, to get help with Medicare costs. Medigap plans help cover the out of pocket costs that Original Medicare leaves up to you to pay. Costs you’re responsible for include coinsurance, copayments and deductibles. Medigap plans work with your Original Medicare, giving you piece of mind.
Just like Original Medicare, you have an Initial Enrollment Period for Medicare Supplements. Your IEP for Medicare Supplemental insurance begins the first day of the month you turn 65 years old and are enrolled in Medicare Part B. This period lasts 6 months, compared to Medicare IEP which lasts 7 months.
During your Medigap IEP, you’re granted guaranteed issue rights. This means you cannot be turned down or charged higher premiums due to pre existing conditions. You won’t have to go through medical underwriting.
Please note, you can sign up for a Medigap plan at anytime. You just won’t be granted guaranteed issue if you sign up outside your IEP. So, once you enroll in Medicare Part B, you’ll also want to enroll in a Medigap Plan.
How Do I Sign Up for Medigap?
When you sign up for Medigap, you’ll want to compare the different letter plans and rates with the top carriers. There’s 10 plans available, lettered A-N. Each letter plan has a different level of benefits. The cost is dependent on many factors such as your age, gender, location, letter plan you choose and carrier you go with. Plan premiums range anywhere between $40-$300.
Ideally, to get the most comprehensive Medicare coverage, you’ll want to enroll in:
- Original Medicare Part A & B
- Medicare Part D Prescription Drug Coverage
Many newly enrolled Medicare beneficiaries are caught off guard when they receive an unexpected bill from their doctor or hospital stay. They assume Original Medicare is going to cover 100% of their healthcare costs. Don’t wait until a medical emergency to sign up for Medicare Supplement insurance.
To get a quote specific to you and your healthcare needs, simply use our online quote tool here. We’re here as a free resource for you, we’ll help you each step of the way and answer all your Medicare questions. Our goal is to make sure you get the full Medicare coverage you’ve worked all these years for.