A Guide to Starting Medicare – What to Do? {infographic}

We hear it all the time, one day you are turning 16 and finally getting your driver’s license, and you turn around to find a red, white, and blue Medicare card in your mailbox. How did your 65th birthday sneak up on you so quickly?! As the number 65 is glowing on the top of your birthday cake and you are celebrating, you also have some critical decisions to make about your healthcare!

Facebook
Twitter
LinkedIn

New to Medicare?

Before the big 6-5 is upon you, you’ve got to do some homework on your Medicare options. And I get it, the government websites for Medicare services are murky at best! There’s a slew of information tucked away in these resources, but it’s all messy, hard to navigate, written in tiny print (do they know that there are fonts bigger than 10pt.?), and just plain confusing. There are different coverage options to choose from, late enrollment penalties to avoid – it seems like enrolling in Medicare is a full-time job in itself!

But it doesn’t have to be.

Consider this your guide to starting Medicare, giving you all the basics, and none of the messy jargon. This guide will help you navigate the start of your Medicare journey so you can kick back, relax, and enjoy 65 to the fullest – the way it’s meant to be!

When Do I Need to Enroll in Medicare?

For most people it when you are turning 65. However, if you continue to work and have group coverage you will likely come into Medicare when (if…lol) you retire.

Do I Need to Do Anything?

You need to notify Social Security when you are ready to sign up. It is best to do this 3 months before you want to enroll.

How Much Does Medicare Cost?

Medicare Part A is generally at no cost. Medicare Part B does have a monthly premium that is income adjusted. The base premium in 2021 is $148.50 / month.

Pieces and Parts

Okay, let’s dive right in! Medicare is comprised of four “parts” or coverage plans, Parts A-D. Each part offers various benefits, has different costs, and has specific requirements for enrollment. To understand your next steps, you need to understand all four parts to some degree. Don’t worry – you won’t need your dictionary or a pen and paper for notes! We’re just getting to know the four parts of Medicare at the surface level. Up first is Medicare Part A!

What is Medicare Part A?

Part A covers all inpatient services. This includes inpatient hospital stays, care in skilled nursing facilities, hospice care services, and limited amounts of home health care.Medicare Part A If you have worked for a minimum of 10 years in the U.S., your Part A coverage was funded by your paid taxes while you were employed.

With Medicare Part A, You have to meet a deductible before your coverage takes over your medical expenses ($1,408 is the deductible in 2020), and you may have to foot the bill for some coinsurance costs. Your coinsurance expenses are determined by the length of your stay in a hospital or skilled nursing facility during each benefit period. For example, you won’t have to pay coinsurance costs for hospital stays that are less than 60 days in total. However, if you stay in the hospital for a total of 61-90 days, your coinsurance costs jump to $352 per day!

Even with the potential coinsurance costs, Medicare Part A will save you and your family a good bit of money on inpatient stays.

What is Medicare Part B?

Part B provides coverage for outpatient services, medical supplies, and several preventative services as well. Part B encompasses a slice of “Original Medicare” since it covers essential medical services.Medicare Part B “Preventative services” include routine doctor’s visits and tests or scans that can detect illness or deter it. Part B also covers “medically required services” in the same vein of monitoring your body for diseases and catching them early on.

Part B is a valuable asset because it will pay 80% of costs related to preventative and medically required services, so long as you are enrolled in a Medicare insurance plan. If you’re not enrolled, you’ll have to pay a monthly premium, a deductible, and 20% of any services you receive through Part B. As of 2020, Medicare Part B has a deductible of $198 and a premium of $144.60, but keep in mind that these numbers can increase every year!

If you’re worried about these costs, check into Medicare Supplements. They can help cover most – if not all – of these additional costs.

Don’t forget to sign up for Part B when you are ready to start Medicare. In order to sign up you need to contact Social Security (weird right?). You can either give them a call 800-772-1213 or you can sign up online by clicking here.

What is Medicare Part C?

Medicare Part C refers to  a Medicare Advantage plan. When it comes to Medicare Part C, you choose to opt out of original Medicare and use the services of a private insurance carrier. Plans are generally network based meaning you need you use certain doctors and hospitals that are witin the network.

Medicare Supplement plans, or Medigap plans, are the other choice when you come into Medicare. With a supplement plan you stay with original Medicare and do not have to stay within a network of doctors and hospitals. These plans are used to cover the costs left over by Medicare Part A and Medicare Part B. Coverage typically includes things like the Part A deductible and copayments, Part B coinsurance/copayments, and Part B excess charges. Medicare Supplement plans can also include things such as foreign travel emergency benefits for when you leave the country. This coverage is extremely beneficial if you plan to travel during your retirement!

An extremely important aspect of Original Medicare with a Medigap plan, is that you are not restricted to a network of doctors or hospitals! With these plans, you are able to see any provider who accepts Medicare as a form of insurance across the entire country. There are no restrictive networks tied to your zip code with Medicare Supplement plans. Medigap plans also do not require pre-authorization or referrals for services. If Medicare covers a service or procedure, your Medicare Supplement plan does as well. This leaves you in control of your healthcare!

There are 11 different options for Medicare Supplement plans (9 if you turned 65 after 01/01/2020). Each plan is differentiated by a letter- A through N- and coverage varies based on the plan. Within each plan, however, coverage is standardized across all insurance carriers. This means that a Plan G with insurance carrier A has the exact same coverage as Plan G with insurance carrier B.

Medicare Supplement plans do carry a monthly premium that you pay in addition to your Part B premium. Although this premium is higher than the premium of a Medicare Advantage plan, it limits your out-of-pocket on the back end of your Medicare coverage.

Medicare is essentially a pay now or pay later system. With a Medigap plan, you pay upfront in the form of a monthly premium, but don’t necessarily have to worry about large bills coming through after you have a doctor’s visit or hospital stay!

The other half of Medicare Part C is a Medicare Advantage plan. Medicare Advantage plans are made up of private health plans contracted with Medicare to give you coverage for things that both Part A and Part B would cover, plus some added “bonus” services. They usually limit you to a select network of hospitals and service providers based on your location.

Since it encompasses the same services as Part A and Part B plans, Part C provides coverage for inpatient hospital stays, care from a skilled nursing facility, home health, and hospice care. They will cover 80% of the cost of preventative services and services used to treat or diagnose medical conditions. Part C plans can also provide coverage for services like hearing aids, eye exams, dental exams, even prescription drugs in some cases.

Now, let’s talk about expenses. While premiums are typically low for Medicare Advantage plans, you may have higher costs when you use the services. With these plans you often have copayments, coinsurances, and deductibles to pay when you use the plan. The maximum out-of-pocket a Medicare Advantage plan can have in 2021 is $7,500. With most Medicare Advantage plans you are also still required to pay your Part B monthly premium. These plans are essentially pay later/ pay as you go plans, but the costs can add up quickly, especially if you have a year with large medical expenses!

"I don't generally recommend Medicare Advantage plans due to the higher out of pocket cost and not being able to see any doctor I choose."
Keith Armbrecht
Medicare on Video

What is Medicare Part D?

Unlike Part C that encompasses a wide range of services, Medicare Part D is focused on one thing: prescription drug coverage. You have the option to enroll in this plan on its own or make it part of your Medicare Advantage Plan.

Medicare Part D coverage has some nuances to be aware of when it comes to coverage.Medicare Part D The coverage offered by Part D plans is determined by a formulary list with at least two drugs per category. This means that the prescription drugs you’re currently taking may not be on that list! Not to worry, there is most likely a similar drug that you can switch to in this case, or you can request an exception. To do this, your doctor will provide a statement to address the medical reason and support the exception request.

As for costs, it varies by location and the plan you choose. It’s possible to find coverage plans without a deductible, but if you select a plan with one, you must pay the full deductible amount before your plan kicks in. As of 2020, the highest limit for deductibles on any plan is $435, to give you an idea of the maximum cost.

Even though Medicare Part D is considered optional, it’s essential to those who need help covering expenses for several medications. And beware of penalty charges! If you don’t enroll in Part D when you turn 65 (or otherwise become eligible for the first time), but decide to enroll later, you will have a permanent penalty charge added to your account! As long as you have prescription drug coverage through Medicare, the permanent penalty will be added to your monthly premium costs.

You will likely have to pay coinsurance or copayment as well. Part D plans have copay tiers to categorize drugs at different levels and charge you accordingly. Tier 1 prescriptions are generic, low-cost drugs, Tier 2 drugs are preferred, Tier 3 drugs are non-preferred, and Tier 4, the most expensive, are specialty prescriptions.