Medicare: Who? What? When? How?

Medicare can be complicated. Senior Benefits of Georgia’s local agents are here to assist.  As independent brokers representing dozens of carriers, we work to educate you about the choices within the two basic approaches to completing your coverage.  We help you enroll in the plans that fit your health, lifestyle, and budget – and review as your needs and coverage options change over the years.

Medicare is health insurance for those age 65 and older, for people under 65 who have received Social Security Disability Income (SSDI) at least two years, and for anyone with End Stage Renal Disease (ESRD).  Federal funds are involved in the four “parts” of Medicare.

Original Medicare consists of Part A and Part B, which are administered by the federal government and help with the costs of medical care.  There is no yearly out-of-pocket limit on Medicare cost-sharing (deductibles, copays, and coinsurance).  Original Medicare alone does not provide coverage for outpatient prescription drugs; routine dental, vision and hearing; or long term care.

The Centers for Medicare and Medicaid Services (CMS) contracts with private insurance companies to administer Part C (Medicare Advantage) and Part D (standalone Prescription Drug) plans which are listed on www.Medicare.gov and in the Medicare & You publication in time for the Annual Enrollment Period (AEP) each October 15 – December 7.

Private insurance companies also offer Medicare Supplement plans, Dental-Vision-Hearing plans, Cancer/Critical Illness policies, Short Term and Long Term Care insurance, and Final Expense plans to fill gaps in Medicare coverage.

 

Medicare Coverage Options Overview

Beneficiaries receiving coverage through Original Medicare can see any Medicare participating provider and may purchase a Medicare Supplement (a.k.a Medigap) plan to cover certain Medicare cost-sharing categories and a standalone Part D Prescription Drug Plan (PDP).  Additional plans are available for other benefits.

Beneficiaries receiving coverage through a Part C Medicare Advantage plan have low copays and a yearly limit on out of pocket costs with network providers for low or $0 premium.  Most cover prescription drugs and additional built-in benefits may include dental, vision, hearing, gym membership, nurse hotline, and non-prescription wellness products.

 

ORIGINAL MEDICARE PREMIUMS AND COST-SHARING

Part A covers inpatient visits, rehabilitation in a skilled nursing facility, and hospice care.  Hospital admissions incur the Part A deductible ($1,556 in 2022).  Nursing facility stays beyond 20 days and hospital stays beyond 60 days incur daily copays of $194 and $389 respectively.  Home health care prescribed by a medical professional may be covered under Part A or Part B.

Most beneficiaries qualify for Part A with no premium if they or their spouse paid payroll taxes during at least ten years (40 quarters) of employment.  No additional tax-deductible contributions can be made to a Health Savings Account (HSA) once enrolled in Part A.

Part B covers outpatient visits, emergency services, durable medical equipment, diagnostic testing, and drugs (like some chemotherapy) administered in a doctor’s office.  Once the annual Part B deductible ($233 in 2022) has been met Medicare pays 80% of allowed costs, but there is no medical out-of-pocket limit on the beneficiary’s 20% coinsurance.

Most beneficiaries pay the standard monthly Part B premium ($170.10 in 2022) as a deduction from Social Security benefits or a checking account.  Quarterly invoices require three months Part B premium for paper checks.

MEDICARE HEALTH PLAN ENROLLMENT DETAILS

Medicare Supplement: Any Medicare Supplement plan is available regardless of health history or pre-existing conditions during the one-time Medicare Supplement Open Enrollment period lasting through the first six months that Part B is effective. The CMS Publication Choosing a Medigap Policy outlines the standardized Medicare Supplement plans available in other limited Guarantee Issue situations.  Otherwise underwriting questions will determine eligibility.

Beneficiaries born before 1995 will continue to have access to the Medicare Supplement Plan F which covers all medical cost-sharing. People who became eligible for Medicare after January 2020 cannot purchase coverage for the Part B deductible, so the most comprehensive option will be Medicare Supplement Plan G, which also includes a Foreign Travel Emergency benefit.

 

Medicare Advantage:

Members must live in a county included in the plan’s service area and will receive a Special Enrollment Period (SEP) upon moving to an area with new choices.  You continue to pay Part B premiums in addition to any plan premiums.

Enhanced extra dental, vision, and wellness products benefits on “MA-Only” plans can appeal to veterans who have access to prescription drugs through the VHA.  Other beneficiaries enjoy built-in convenience with a Medicare Advantage Prescription Drug (MAPD) plan.

AEP provides the primary opportunity to review and switch plans for the following calendar year.  Members of MA/MAPD plans have an additional opportunity to change plans once during the Medicare Advantage Open Enrollment Period from January through March.

Our free consultation services begin with a formulary search to narrow down plan choices based on your prescriptions and then where appropriate further refine options based on the HMO or PPO networks that contract with your preferred providers.  Once you select your base health plans ancillary products can round out your personalized coverage package.

 

Medicare Prescription Drug Coverage 

Eligible beneficiaries without creditable prescription drug coverage through an employer plan or VHA benefits should sign up for either a Medicare Advantage Prescription Drug (MAPD) plan or standalone PDP to avoid a future Part D Late Enrollment Penalty (LEP).

While the formulary (list of covered drugs) and tier assignments vary, all plans offering Medicare Prescription Drug coverage meet common standards including a maximum deductible  ($480 in 2022).  After $4,430 in total drug costs, Initial Coverage copays and coinsurance convert to Coverage Gap (a.k.a. “Donut Hole”) cost-sharing.  Once applicable drug costs reach $7,050 for the year, members pay the greater of $9.85 or 5% during Catastrophic Coverage.

Low Income Subsidy (LIS) Prescription Drug “Extra Help” can lower the cost of premiums, deductible, and copays for beneficiaries with income below 150% Federal Poverty Level (FPL). We can assist with the https://www.ssa.gov/prescriptionhelp/ application.

 

Getting Started with Medicare

The Initial Enrollment Period (IEP) begins 3 months before the month of turning 65 and continues 3 months after.  If activating Part B at age 65, this 7-month window also applies to selecting a Part C or Part D plan.   A personal account on www.SocialSecurity.gov  provides an online tool to sign up for Original Medicare and access your ID.  The physical card may take up to six weeks to arrive by mail.  If you signed up for early Social Security retirement income your Medicare card will arrive automatically.

With an early start on your planning, we can have all your membership cards in hand prior to your effective date, which will be on the first day of the month (i.e. prior to actual birthdate).

 

What if I’m still Working?

Active employees (and spouses) covered under a health plan for a group with at least 20 employees when turning 65 can delay Part B enrollment without penalty.  Our agents can help you compare the risk exposure and premium costs for group plan choices with Medicare options to find the optimal time to make the switch – at age 65, when spouse turns 65, at the group plan’s next open enrollment, dropping to part-time hours, or upon full retirement.  The Special Enrollment Period (SEP) requires an employer attestation of continuous group health plan coverage in order to waive the Part B Late Enrollment Penalty.

Households with income over $91,000 per person may pay an Income Related Monthly Adjustment Amount (IRMAA).   Income on 2020 tax returns determines 2022 IRMAA.

 

The Bottom Line

Medicare is complex.  Your Senior Benefits of Georgia agent will take the mystery and guesswork out of obtaining benefits and make the process an enjoyable and stress-free experience for you.  Call us today for a free consultation.