Medicare 101

Posted: September 21, 2015

What is Medicare?

Medicare is health insurance. It is made up of several parts.

Part A – Hospital Insurance

Part B – Medical Insurance

Part C – Private Medicare Insurance

Part D – Prescription drug coverage


Who is eligible for Medicare?

Individuals turning age 65 and those on Social Security disability after 24 months.


Should I get my Medicare at age 65 or after I have been on Social Security disability for 24 months?

Everyone’s situation is unique and the decision needs to be thought out thoroughly.  If you are covered under an employer group contract, you need to consider how much of your premium is employer paid and if financial it makes sense to leave employer group health and go on Medicare.  Another consideration is the out-of-pocket costs. Have I met my deductible or out-of-pocket maximum for the year?  Does the savings in premium out way my out-of-pocket expenses?  If I go on Medicare and leave my employer group coverage what happens to my dependents?  Is my employer group health creditable coverage? The answers to these questions will help you make the decision as whether to go on Medicare or not.


How do I apply for Medicare Parts A and B?

There are 3 enrollment periods, Initial Enrollment Period, Special Enrollment Period, and General Enrollment Period.

If you are collecting a Social Security payment, you will automatically be enrolled in Medicare Parts A and B at age 65, or after 24 months on Social Security disability. You may elect not to be enrolled in Part B by returning your Medicare card back to the Social Security Administration. Very rare circumstances would apply; for someone to not elect their Part B, when they are collecting their Social Security payment.


If you are not collecting Social Security, you need to apply for your Medicare when you are 1st eligible.  If you plan take your Medicare at age 65, you may begin the process up to 3 months prior to your birthday month. There is a 7 month period at age 65 in which you have to enroll, if you enroll after this period, you may incur a penalty on your Part B premium; unless you are eligible for a Special Enrollment Period.


If you are still working and covered under an employer group health plan, you may make application for your Medicare Part B any time after age 65, without incurring a penalty; however, once you are no longer covered under your employer group health plan (not including COBRA) you must make application for your Medicare Part B during your Special Enrollment Period, or you will incur the penalty, and have to wait until the next General Enrollment Period to enroll.


The General Enrollment Period happens annually, January through March for a July 1 effective date. Usually taking advantage of General Enrollment Period means there is a penalty involved.


How do I apply for Medicare Part D?

There are 2 enrollment periods, Initial Enrollment Period, and Annual Enrollment Period.

Application for Medicare Part D (prescription drug coverage) is done through private insurance and not through Medicare.  1st eligible; if you take your Parts A and B at age 65 or at a later date, you will want to enroll into a Part D prescription drug plan at such time to avoid the penalty. Part D has an Annual Enrollment Period, which runs from October 15 through December 7 for a January 1st, effective date.


What are the costs for Medicare A, B and D?

Part A: Is free if you have 40 or more quarters of Social Security credit

Part B: for 2015 is $104.90, if your Modified Adjusted gross income in 2013 was more than $85,000/single or $170,000/couple, you will pay higher premiums.

Part D: is what the private plan charges; however just like Part B if your Modified Adjusted gross income in 2013 was more than $85,000/single or $170,000/couple, you will have an Income-related monthly adjustment amount billed through Medicare in addition to your plans premium.


Medicare Part C and other Supplemental Insurances

A coverage in addition to your Medicare and cover such things as deductibles and coinsurance, in addition to other services not covered by Medicare.


There are several types of Supplemental plans available:

Medigap Plans:  work with Medicare and have three types of coverage, Basic Medicare Supplement, Riders, and Extended Basic. Medigap plan members continue to have use of their Medicare and claims paid by both Medicare and Medigap plan, no networks or Part D.

Select Plans: are a type of Medicare Supplement, provide Basic Medicare with riders, have networks, no Part D.

Medicare Part C: contract with Medicare, provide all Medicare benefits through the plan, Medicare does not pay claims, has networks and Part D.

Cost Plans:  contract with Medicare and provide all Medicare benefits through plan using networks also provide coverage for non-network; however, claims paid by Medicare only, includesPart D.


Linda Presler

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