“Medicare is available to seniors who reach age 65 and younger taxpayers who may be disabled.
How Medicare Works
If you are receiving Social Security and are at least 64 years and 9 months you will be automatically enrolled into Medicare Part A and Part B. Part A is covered by the taxes you have previously paid. Part B premiums will be automatically deducted from your Social Security check before it is deposited into your bank account.
If you have not begun receiving Social Security you will need to apply for Part A and B. You may apply up to 3 months before your birth month but no later than 3 months past your birth month. If you fail to apply for Part B premiums by that date you will be assessed a 1% penalty for each month you fail to apply. This penalty will never go away and will be added to any future increases in your Part B premiums.
If you are still working and covered by a health insurance plan through your employment (or spouses employment) you do not need to apply for Part B coverage until you are no longer employed or no longer covered by that policy. You will not be penalized by Medicare but will still need to apply for Part B coverage within 3 months of your coverage ending date.
In order to be fully covered under medicare you will also need to apply for Medicare Part D (Prescription Drug Coverage). This coverage is offered by private insurance companies and may or may not cover all of the prescriptions you are on. You will need to shop on your state Medicare site to find a companies policy that will work for you. There is also a penalty for failing to apply for Part D coverage. (Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($34.10 in 2016) times the number of full, uncovered months you didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.)
Original Medicare is comprised of Part A, Part B and Part D, however there is another choice you can make when you are ready to begin Medicare, It is known as Part C or Medicare Advantage.
If you choose to be covered by a Medicare Advantage plan you will still need to be enrolled in Part A and Part B of Medicare. Medicare takes your Part B premium and contracts with private insurers to offer this coverage as an HMO, PPO or POS (Point of Service) plan. Not all plans work the same way so before consumers enroll, discuss the plan’s rules, what the costs will be, and whether the plan will meet the consumer’s needs.
Health Maintenance Organization (HMO)
A Medicare Advantage Plan in which members select a primary care physician (PCP) to help coordinate their care and must go to providers in the Plan’s contract network, except for emergency, urgent care and renal dialysis services. Members will need referrals from their PCP to see specialists in some plans. Out-of-network providers are not required to accept the plan’s terms and conditions of payment; therefore, the member may be responsible for the full cost of services.
Preferred Provider Organization (PPO)
A MA Plan in which the member can use either network providers or non-network providers to receive services (going outside the provider network generally costs more). The plan does not require members to have a referral for specialist care. Out-of-network providers are not required to accept the plan’s terms and conditions of payment; therefore, the member may be responsible for the full cost of services.
An HMO Plan that also gives members the option to use providers outside the plan’s contracted network for certain benefits, generally at a higher cost. The benefits that are covered out-of-network vary by plan; some plans may have coverage limits for certain benefits, Out-of-network providers are not required to accept the plan’s terms and conditions of payment; therefore, the member may be responsible for the full cost of services. Members will need referrals from their PCP to see specialists in some plans.
If you have regular Medicare and are not covered by a company retirement plan to pay for what Medicare doesn’t pay for, you should consider a Medicare Supplement Plan to cover the things Medicare does not cover.
Possible Excess Medicare Expenses
Part A Deductible for 2016 is $1,288
Skilled Nursing Coinsurance (days 21-100) is $161/day
Part B Deductible for 2016 is $166
• Part A Hospital
›› 61-90 days – $322/day
›› 91-150 days – $644/day (lifetime reserve days)
›› Beyond 150 days – 100% for 365 days
• Parts A and B Blood Deductibles (1st three pints)
• Part B Coinsurance – 20% of Medicare approved charges
• Part A Hospice Care Coinsurance or Co-payment
These costs can add up very quickly which could deplete your retirement assets needed to provide income for you and your family.
Medicare Supplement Plans are required to be standardized, so every insurance company must offer the same benefits under each of the possible 11 plans available (A, B, C, D, F, F*, G, K, L, M, N). Every company must offer plan A but not all plans may be offered by every company in your area. Costs and availability can vary by County and depend on the experience rating of the County and Company.
Before you buy a Medicare Supplement Policy or sign up for Medicare Advantage you should do your due diligence to explore the plans in your area and speak to someone who understands the companies and plans in your area. If you would like learn more please request a complimentary review and consultation from us.
If you are currently on Medicare and your Supplement Costs have gone up
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