Medicare
Please start with the video below, entitled “Medicare 101”
How Do I Choose ?
Medicare Part A/B
Medicare Advantage Plan
Now that we have covered the different ways you can handle Medicare, how do YOU decide which one is right for you? That’s right I emphasized YOU because it is your choice which path you choose. Don’t let anyone else decide for you. There is no one size fits all, what works for your spouse, neighbor, co-worker may not fit your health needs, risk tolerance, or budget. When you are turning 65 you have the right to choose any plan you want without answering health questions. After you are 65 ½ you will need to answer health questions in order to qualify for a Medicare Supplement/Medigap plan in most instances.
Let’s review the two pathways you can choose from.
1) Take traditional Medicare Part A and Part B and have a Medicare Supplement/Medigap plan that pays what Medicare does not pay. Also enroll in a Medicare Part D prescription drug plan to help with the costs of your prescriptions. This is for folks that want peace of mind, that don’t mind paying a little more premium per month in exchange for knowing that they are covered no matter what happens to them health wise. It is like your coverage for your home, you pay the premium and hope you never have a claim, yet if you do have a claim, you are covered other than a small deductible. You will be able to see any doctor, any hospital, anytime, anywhere provided they accept Medicare.
2) Take a Medicare Advantage plan and pay little or no premium and only pay the co-pay/coinsurance when you use the plan. Your Part D coverage will likely be included in the plan. You will be able to enjoy the additional benefits such as gym membership, dental, vision, and hearing coverage, over the counter allowance, and grocery allowance. You would need to make sure your providers are in network prior to enrolling in the plan. Remember these plans are Managed Healthcare Plans that will offer incentives and encourage you to maintain your health in order to lower your overall healthcare costs.
Contact us and we can answer your questions and assist you in choosing the plan that is right for you. There are never any charges for our services, we are paid a fee/commission by the carrier that you choose. Click here to ask for an appointment where we can answer your questions.
Penalties=Fear. Some agents/companies don’t have anything of substance to talk about with their product, so they resort to fear. They try to scare you into a decision instead of educating you and encouraging you to take your time and make an informed decision.
There are penalties involved if you do not make a timely decision, yet any agent should be able to explain the penalties AND still help you avoid them. So relax and read as we cover the penalties that can happen and how to avoid them.
The most common penalty is the Late Enrollment Penalty for Part D. This occurs if after your Initial Enrollment Period ends, you have a period of 63 consecutive days or longer without Medicare or creditable Prescription drug coverage. This penalty is calculated by multiplying the number of months you went without coverage by 1% of the national base beneficiary premium ($33.37 in 2022) and rounding it to the nearest $.10. That number is then added to your monthly premium, and you will be responsible for paying that penalty for the rest of your life with one exception. You will not be responsible for the Late Enrollment Penalty if you qualify for Extra Help. The national base beneficiary premium is subject to change every year so your penalty amount may change as well. Example: You go for two years (24 months) without creditable drug coverage before enrolling in a plan with a monthly premium of $15.00. 24% (1% per month) times $33.37=$8.01. $8.01 rounded to the nearest $.10 would be $8.00. You would pay a Late Enrollment Penalty of $8.00 per month in addition to the premium of the drug plan you choose. $15.00 plus $8.00=$23.00 would be your adjusted premium.
The next penalty we will discuss is the Part B Late Enrollment Penalty, this penalty occurs when you are eligible for Medicare Part B but don’t sign up. You will pay a 10% penalty for each year you could have signed up but didn’t. There is no cap on this penalty at the present time. Example: You waited 3 full years after turning 65, before enrolling in Part B. When you do enroll in Part B you will pay a 30% Late Enrollment Penalty in addition to the Medicare Part B premium ($170.10 in 2022). 170.10 X 30%=$51.03 penalty per month. 170.10 + $51.03 = $221.13 rounded to nearest $.10 will be $221.10 deducted from your Social Security check each month. You can avoid this penalty. You will not be responsible for this penalty if the state pays your Part B premium.
The next penalty is the Part A Late Enrollment Penalty, this penalty only applies to people who have to pay a premium for Part A (people who have not worked 40 quarters). If you are required to pay a premium for Part A and you don’t sign up when first eligible you will have to pay a 10% penalty. You will pay this penalty for twice the number of years you delayed in signing up for Part A. Example: You did not sign up for Part A for 3 years, you will pay the 10% penalty for 6 years once you sign up for Part A.
The last penalty we will cover really isn’t a penalty per se, it is the Income Related Medicare Adjusted Amount (IRMAA). Based on the chart below you will be assessed an additional Part B or Part D premium adjustment determined by your, and/or your spouses, income from two years prior. This is based on your Annual Adjusted Gross Income (AGI) plus other forms of tax-exempt income.
| Your annual income | Your monthly premium in 2022 | |
| Individuals | Couples | |
| Equal to or below $91,000 | Equal to or below $182,000 | $170.10 |
| $91,001 -$114,000 | $182,001 – $228,000 | $238.10 |
| $114,001 – $142,000 | $228,001 – $284,000 | $340.20 |
| $142,001 – $170,000 | $284,001 – $340,000 | $442.30 |
| $170,001 – $499,999 | $340,001 – $749,999 | $544.30 |
| $500,000 and above | $750,000 and above | $578.30 |
Why do I say RELAX? Because you are one of the people that have taken time to visit this website and learn about your rights concerning Medicare. You are going to contact us and set an appointment for an obligation free, pressure free meeting to discuss your options and let us answer ALL your questions and concerns. Then you are going to take the time to thoroughly review your options and make an informed decision. You will be one of the few people on Medicare that understand why YOU chose the plan in which you enrolled. You won’t have to answer all those spam calls from fear mon+gering agents that robocall your phone 10-12 times per day. To contact us for an obligation free, pressure free appointment click here.
What About Penalties?
RELAX!
The Gaps in Medicare
In the video Medicare 101, we illustrated the fact that Medicare does not cover 100% of your health care costs. In fact, there are several huge gaps in traditional Medicare that you will be responsible for paying. These include but are not limited to the Medicare Part A deductible of $1556 per hospital stay, the daily coinsurance of $194.50 if you should be in a Skilled Nursing Facility longer than 20 days, the $233.00 annual Medicare Part B deductible, and the 20% Medicare Part B coinsurance.
Let’s break those down in more detail, first the Medicare Part A deductible of $1556 per hospital stay/benefit period. A benefit period is a 60 day period that begins on the first day you are admitted/ confined to a hospital facility. When you are admitted/confined to a hospital facility that starts a benefit period that continues uninterrupted until you have gone 60 days without admittance/confinement. Should you be discharged from the facility and return within 60 days you will not be assessed another deductible charge of $1556. On the other hand, if you go longer than 60 days without being admitted/confined you will be responsible for a new Medicare Part A deductible of $1556 upon your next admittance/confinement. There is no limit to the number of benefits periods you can have.
Now we will discuss the $194.50 daily coinsurance in a Skilled Nursing Facility. Medicare will only pay for Skilled Nursing Care after at least a 3 day(not including the day of discharge) admittance/confinement in a hospital AND you must go directly to the Skilled Nursing Facility from the hospital or within 30 days of the hospital discharge. If you meet these qualifications, then Medicare will pay for Skilled Nursing Care for the first 20 days at $0 coinsurance. Starting on day 21 and continuing through day 100 you will be responsible for $194.50 per day coinsurance. After day 100, Medicare will not pay for Skilled Nursing Care. Your physician and/or the Skilled Nursing Facility must verify that you are making improvement in your rehab for Medicare to continue paying their portion through day 100.
Medicare Part B has an annual deductible of $233.00, this deductible must be met before Medicare Part B will begin paying 80% of any Part B charges. As an example, you go to the ER in January and the bill is $500.00. The ER will bill Medicare the full amount of $500.00, Medicare will adjust the charges to their approved amount i.e. $375.00. Medicare will then instruct the ER to bill you $233.00 and mark your Medicare Part B deductible as satisfied for the year. Medicare will then pay 80% of the remaining $142.00 ($113.60) and instruct the ER to bill you for 20% (28.40). Medicare will continue to pay 80% of any approved charges for the remainder of the year. Your 20% coinsurance has no ceiling/cap, meaning if the approved amount is $100.00 you owe $20.00, $1000.00 you owe $200.00, $10000.00 you owe $2000.00, etc.
Medigap Insurance aka Medicare Supplement Insurance
Because most folks don’t have $1556.00 in reserve when going to the hospital, and most folks can not afford to face an unlimited amount of 20% coinsurance. Most folks purchase a Medigap/Medicare Supplement policy that covers the $1556 (no matter how many benefit periods you face), the $194.50 daily coinsurance in a Skilled Nursing Facility, and the 20% coinsurance (no matter how high it goes). The only “gap” that would not be covered would be the $233.00 Medicare Part B deductible.
There are 40+/- companies that sell Medicare Supplements and each company has hundreds if not thousands of agents/brokers that market their plans. Medicare regulates what each plan covers, this means that all 40 companies that offer Plan G have the exact same coverage. Medicare can not regulate what each company charges therefore you could call all 40 companies and receive 40 different premium quotes.
Due to premium levels most people will usually purchase a Plan G or Plan N to meet their coverage needs and or budget.
This chart will help you understand what each different Medicare Supplement Plan covers.
Medigap plan premiums go up every year, sometimes twice per year. As a person ages their Medicare premiums go up faster than their income increases. This creates a pinch in their budget leaving less spending money each month. In 2006 this pinch became so severe that Congress decided to take action. Every night when you came home and turned on the evening news you saw grandma and grandpa testifying to Congress that they had to decide between going to the doctor or going to the grocery. They also were faced with paying for their prescriptions or paying for utilities. Congress, Medicare (CMS), and the insurance industry worked together and created Medicare Part C and Part D.
Medicare Part C is simply another way of paying for healthcare under Medicare, Medicare Part C IS NOT a Medicare Supplement/Medigap plan. When you select Medicare Advantage/Part C for your coverage you are telling Medicare Part A and Part B to step aside and let you and a private insurance company handle your healthcare. You MUST remain on both Part A and Part B and pay the Part B premium, in order to enroll in Part C. Your healthcare provider(doctor/hospital/SNF) will no longer bill Medicare Part A and Part B for your visits/procedures, they will bill your private insurance company.
The private insurance company has a contract with Medicare that allows them to enroll you in their plan and provide healthcare to you through a network of providers. The private insurance company receives re-imbursement from Medicare for providing your healthcare as well as the Part B premium each month. They in turn have a contract with each provider that pays the provider a fee for each visit/procedure that is performed. You will have access to most preventive care for $0 co-pays and will have a co-pay/coinsurance for all other procedures. The co-pays/coinsurance will be published and available for your review prior to enrolling in a Part C plan.
The private insurance companies develop Part C plans each year for various market areas on a local/regional/statewide basis. These plans are announced each year on October 1, you then have from October 15 – December 7 to compare and decide which plan serves your healthcare needs. This is referred to as Medicare Annual Enrollment Period (AEP). You may also qualify for additional enrollment periods during the year called Special Enrollment Periods (SEP). These SEP’s usually are generated by a qualifying life event (change in marital status, change in employment status, change in address, etc.).
Part C plans are required to cover everything that traditional Medicare covers as well as additional benefits that traditional Medicare does not cover. Some of these additional benefits include dental/vision/hearing benefits, over the counter benefits, grocery card benefits, etc. Hence the name Medicare Advantage plans, all that Medicare covers plus additional benefits.
The very first additional benefit that Medicare Advantage plans provided was Part D/Prescription Drug Plans. To learn more about Part D plans click the Part D tab on our home page.