You are turning 65 in a few months. Suddenly, you are getting more Medicare advertisements in the mail than you know what to do with. What makes it worse is that they all seem to say something different. You think to yourself, “why is this so complicated?”
Look no further, WEA Trust is here to help!
Medicare is the federal health insurance program for:
· People who are 65 or older
· Certain younger people with disabilities
· People with End-Stage Renal Disease
Important Medicare coverage information:
· Part A & Part B together are referred to as “Original Medicare”
· There is no annual out-of-pocket maximum
· There is no coverage outside of the United States
· You can defer enrollment if you have equivalent coverage through your employer or spouse
Parts of Medicare
· Part A: hospital insurance provided by the Federal Government that helps to pay for inpatient stays, skilled nursing facilities, hospice care, etc. Most people pay $0 if you or your spouse paid Medicare taxes for 40 calendar quarters (10 years). The Part A deductible for 2020 is $1,408 per benefit period. A benefit period starts when you enter a hospital or skilled nursing facility for an overnight stay (not observation) and ends when you have been out for 60 days in a row. The Part A deductible applies to each benefit period, so it is possible to have to pay multiple deductibles per year. There is no cap on the total costs you can accrue each year.
· Part B: medical insurance provided by the Federal Government that helps to pay for doctor’s visits, ambulance rides, lab test, medical equipment, etc. Most new Medicare members in 2020 will pay $144.60/month in premium, however the cost per month is dependent on income. The Part B deductible for 2020 is $198 per year. After the Part B deductible, Medicare pays 80% of the Medicare-approved amount for a specific medical procedure. There is no cap on the total costs you can accrue each year.
· Part C: also known as Medicare Advantage plans. These types of plans are offered by private insurance companies that are contracted with the Federal Government. In order to qualify for a Part C plan, you must be enrolled in Medicare Parts A & B and pay your Part B premium. The insurance company becomes your primary insurer and all plans must cover at least what Medicare Parts A & B cover. Most plans include prescription drug coverage, and some may offer additional benefits such as hearing aid or eyeglass coverage.
· Part D: prescription drug coverage offered by private insurance companies that are contracted with the Federal Government. In order to qualify for a Part D plan, you must be enrolled in Medicare Parts A & B. Each insurance company defines a list of covered drugs and the pharmacies where you can get them. Coverage is broken into stages and out-of-pocket costs are determined by the stage you are in.
· “Medigap” plans: help to cover the out-of-pocket costs of Medicare, such as: deductibles, copays and coinsurance that Original Medicare doesn’t pay for. In order to qualify for a Medigap plan, you must be enrolled in Medicare Parts A & B. Original Medicare continues to be your primary insurer and the Medigap plan helps fill in the “gaps” by acting as the secondary payor. Medigap plans are standardized by the Federal Government and do not include prescription drug coverage.
Who is automatically enrolled in Medicare?
· If you are already getting benefits from Social Security
· If you are under 65 and a person with certain special needs
· If you have ALS
When should I manually enroll?
· If you are not automatically enrolled in Medicare, you will need to contact Social Security during an Enrollment Period to sign up:
o Initial Enrollment Period (IEP) – a seven (7) month sign-up window around your 65th birthday. The sign-up period is 3 months before your birthday month, your 65th birthday month and the 3 months after your birthday month. If you are still working, you can defer signing up for Medicare during your IEP, but you must have insurance coverage equivalent to Parts A & B through either you or your spouse’s employer.
o Special Enrollment Periods (SEP) – times outside of IEP when you can sign up for Medicare under special circumstances. The most common SEP scenario is if you continued to work past age 65 and deferred Part B and/or Part A and are now getting ready to retire. In this scenario, you can either enroll in Medicare Part B and/or Part A any time while you’re covered under an employer plan OR wait and enroll in Medicare Part A and/or Part B any time during an 8-month period that begins the month the employer coverage ends (or the month your employment ends), whichever comes first.
o General Enrollment Period (GEP) – If you did not sign up for Medicare during your IEP and do not qualify for, or missed, your SEP, you must wait until the GEP to sign up. The GEP runs annually from 1/1 – 3/31, with coverage beginning on 7/1.
That wasn’t so bad, right? Now that you have the basics down, feel free to give us a call to discuss your Medicare options with WEA Trust!