Frequently Asked Questions About Medicare

Content derived from DocTalk with Paul Gunther, Medicare Insurance Consultant

0:48 | How does someone get Medicare?
There are three ways someone can get Medicare:

1. The most common occurs when someone turns 65. You are eligible on the first day of the month you turn 65.
   
2. If you’ve been collecting Social Security disability for 24 months, even if you’re under the age of 65.
   
3. If you have certain health conditions. Common ones include ALS and end-stage renal disease.
   

1:27 | How does someone sign up for Medicare?
The quickest way to sign up is online, using the Social Security website SSA.gov. I usually recommend that people create a ‘My Social Security’ account prior to that, because you will be asked to provide a username and password for it when signing up for Medicare online.

2:04 | When can someone sign up for Medicare?

Option 1 | The Initial Enrollment Period

• The 7-month enrollment window that occurs when you turn 65
• The window begins 3 months prior to your birthday and ends 3 months after your birthday

Option 2 | Annual Election Period (AEP)

• The enrollment window that occurs when you’re already enrolled in Medicare
• The window begins on October 15th and continues through December 7th
• This is when you can make changes to your annual plan for the upcoming year

Option 3 | Late Enrollment Period

• The enrollment window that occurs for those enrolled in Medicare Advantage Plans
• The window begins on January 1st and continues through March 31st
• This is when someone on a Medicare Advantage Plan can change to another Advantage Plan, add a Part D drug plan, and/or go back to original Medicare if they wish.
  

3:35 | What does Medicare cost?
For 2022, the starting rate for Medicare (Part B) is $170.10 per month. If you’re taking Social Security, the money will be taken out of your Social Security check. If you’re not on Social Security, you will be sent a quarterly bill in the mail for about $510.

4:04 | What is the difference between Medicare Part A and Part B, and why someone would choose Part B and elect to pay for it?

Original Medicare comes in two parts, Part A and Part B.

Medicare | Part A

• Part A mainly covers being admitted to the hospital, but also includes things like a skilled nursing facility, hospice care and home healthcare.
• When someone pays Social Security or Medicare taxes through their working paychecks, they are paying in advance for Medicare Part A. As long as you or your spouse have worked and paid into Medicare taxes for 10 years or more, there is no monthly cost for Medicare Part A.
• Most people still opt into Part A even if they plan to continue working past the age of 65, because it is a free benefit.

Medicare | Part B

• Part B covers all other medical services not covered by Part A. Some examples include seeing your primary care provider, having outpatient procedures done, a trip to the emergency room, cancer treatments, and durable medical equipment. If you do not opt into Medicare Part B, you will not have coverage for any of the services listed.
• Unless you qualify for state Medicaid, there is a monthly cost for Medicare Part B. On average, people commonly pay about $170.10 per month for 2022.
• If someone wishes to sign up for a Medicare Advantage or Supplement plan, they must have both Medicare Part A and Part B. Because of this, Part B is valuable to have if you want really good medical coverage.
  

6:08 | What does IRMAA stand for and why is it important?
IRMAA stands for Income Related Medicare Adjustment Amount and is connected to both Medicare Part B and Part D, which is your drug coverage. Most people pay $170.10 per month for Medicare, but if the government estimates that you earn more money than the average person, you will get charged more per month for Part B and Part D.

To determine this, they look at your taxes for the last two years, focusing on your Modified Adjusted Gross Income. This number is commonly found on the first page of your tax return. Right now, the government is looking at tax returns from 2022. Starting in January of 2023, they’ll begin looking at tax returns from 2021.

7:42 | Should someone still sign up for Medicare when they turn 65 if they’re still on an employer health plan?
I recommend signing up for Medicare Part A, even if you’re still working. Not only because there is no monthly fee, but also because it provides you with a Medicare number and gets you double coverage if you’re admitted to the hospital. Additionally, once you’ve decided to retire, it makes it much easier to get and sign up for Medicare Part B.

8:42 | What is the prescription late enrollment penalty?
The late enrollment penalty relates to your drug plan through Medicare Part D. There is a Late Enrollment Period (LEP) that occurs if you choose not to sign up for Part D when you turn 65 and become eligible, but you wish to sign up for it at a later date. When you do decide to sign up, the government fines you for every month you didn’t have a drug plan since you turned 65.

Currently, the national average cost for a drug plan is about $32 – $33 per month. The late enrollment penalty charges you 1% of that national average, every month, for the rest of your life. This means that anyone that signs up late will be paying an additional $3 – $4 into their drug plan, per month, in addition to the monthly cost of their drug plan.

If you never sign up for Medicare Part D, you will never have to pay this fee. Because of this, I often recommend people sign up for Part D right away so avoid paying this penalty, even though it is an optional plan. You are not required to have a drug plan.

10:33 | What is the difference between a Medicare Advantage Plan and a Medicare Supplement Plan?

Medicare Supplement Plan (aka: Medigap Plan)

• Secondary Medicare coverage – this is used after your primary insurance has been billed (Medicare Part A and Part B), to help cover any remaining costs not covered by primary insurance.
  • Example: If Medicare (your primary insurance) covers 80% of your bill, a Medicare Supplement Plan will help to cover the remaining 20%.
    
• Supplemental Plans are lettered A through N. Plan G is the most common and is considered the gold standard for coverage.
  
  
• Supplement Plans are the more expensive of the two options, but they provide the best coverage. Currently, depending on the plan, a supplemental plan can range anywhere from $150 – $200 per month.

Medicare Advantage Plan

• An Advantage Plan is similar to a privatization of Medicare and is not secondary coverage. In this instance, the government pays an insurance company to take over your coverage and administer your benefits.
  
  
• With a Medicare Advantage plan, you will still have a Medicare Part A and B card, and you still pay monthly for your Medicare Part B. The difference is, when you see your doctor or go to a hospital, you will give them your insurance company’s card instead of your Medicare card.
  
  
• Insurance companies make enough money through this process that most Advantage Plans are at no additional monthly cost to you, outside of what you are already paying for Medicare. Because of this, Advantage Plans are the lower priced of the two options.
  
  
• All Advantage Plans have a co-pay for medical services, whether you’re seeing a specialist, having surgery or going to the hospital. Each type of service will have a different co-pay and the cost of your final bill will vary.
  
  
• Another important note about Advantage Plans is that they operate within networks. This means it is important to make sure the doctor(s) you want to see are within your network before signing up for an Advantage Plan.
  
  • HMO Advantage Plans – You must stay within your network
  • PPO Advantage Plans – You are allowed to go outside of your network

To learn more, visit www.medicare.gov/