You get to start Medicare benefits on the first day of the month that you turn 65, unless your birthday is on the 1st, then you get to go back one whole month just for being born. For example, if you were born on February 1st, your Medicare start date is actually January 1st. If you are already drawing a retirement benefit from social security or social security disability or railroad retirement, you will automatically be enrolled. They will even mail your card directly to you and you should have it 3 months before your benefit even begins.
If you are not retired, you don’t have to retire to begin Medicare. You have the right to begin Medicare on the first day of the month that you turn 65 even if you are still working and planning to continue working. You don’t have to draw your social security benefit for your Medicare to begin, but if you’re not drawing yet, you will have to apply.
You can apply at ssa.gov or at your local social security office. Technically, legally, without penalty, 3 months before, the month of, or up to 3 months after your birthday. If you want to make your benefit begin when you are first eligible which is when it will likely be the least expensive for you in your lifetime, make sure to complete your application before your actual start date to make sure there is no delay. Your application date will impact your start date.
Once you’ve enrolled, or at least once you’ve researched your rights, you do have to make a decision. You have to choose if you want Original Medicare or Medicare Advantage also called part C.
On page 5 of the Medicare and you guide, and on page 7 of the guide to health insurance for people with Medicare, you will see a little illustration with a line down the middle of the page that shows your 2 distinct options. Remember this is an either or choice. You have to choose either Original Medicare or Medicare Advantage. You can’t have both.
If you choose Original Medicare you will get to reap much of what you have been paying into your whole working life. Medicare, like any other insurance has premiums and deductibles. Original Medicare begins with combining Part A and part B.
Part A is referred to as Hospital insurance, but it also helps cover hospice, skilled nursing, and home health. Part A is sometimes called, “the free one” even though it does have a standard premium of $499 per month. Don’t panic! As long as you or your spouse has worked for 10 years in America and paid your taxes, your premium when your benefit begins is actually zero dollars. That’s not because it’s free, it's just because you have already paid it. Your whole working life, when you see taxes coming out for FICA or Medicare, this is what you were buying. You were pre-purchasing a portion of your retirement health insurance and now you get to reap the benefits of what you’ve been sowing into your whole working life. Isn’t that great?
I don’t know about you, but I would much rather pay little pieces while I’m still working, than have to come up with an extra $500 per month after I retire. Part A does have a deductible that either the patient or their medigap also called supplement could have to pay multiple times a year. The 60 benefit period deductible for 2022 is $1556 that either you or your medigap could have to pay multiple times a year. The way a 60 benefit period deductible works is: When a patient is admitted either the patient or their supplement pays the deductible. The patient is treated, gets better and is released, and then any time that same patient is out for 60 consecutive days and gets re-admitted, either the patient or their medigap has to pay it again. It sounds complicated, just remember that you could have coverage that pays for all of it if you want.
Once that deductible is met by the patient or their medigap, Medicare part A pays 100% of fees that they approve. Isn’t that amazing? They pay 100% in a skilled nursing facility until day 20. Day 21 either the patient or their medicare supplement pays 194.50 per day. With Original Medicare part A also pays 100% after the deductible is met in the hospital until day 60, day 61 the patient or their medigap pays $389 per day, day 90 that doubles to $778. Remember you can buy a medigap also called medicare supplement to pay all of that if you want to.
If someone has Original Medicare, Part A works with Part B to cover a little over 50% of all medical cost combined. That’s pretty good considering we spend an average of over $16000 per year on medical cost between age 65 and Heaven.
Part B does have a premium as well. It is a standard monthly premium that will either be deducted from your benefit or billed directly to you, of $170.10/month. In some cases, you may be asked to pay more and you may be able to pay less depending on extra help available in your state. That 170.10 buys some amazing benefit, y’all. Part B helps cover doctors visits, specialist visit, outpatient physical therapy, occupational therapy, speech therapy if anyone has a stroke or anything like that. It helps pay for durable medical equipment, like walkers, rolaters, cpap machines, y’all part b will even pay for insulin, if someone is insulin dependent and using a pump… if you self-administer, that’s part D, but if you have a pump, this can be life-changing. Part B also pays for ambulatory services and ER visits. Part b covers major outpatient surgeries, treatment, like chemotherapy, radiation, dialysis, transfusions. Phew! That’s a lot of coverage.
Part B does have an annual deductible of only $233 for the whole year. After that deductible is met, Original Medicare pays 80% of fees they approve and either you or your medicare supplement aka medigap pays the rest. Some doctors may not accept Medicare assignment. Don’t let that scare you, all that means is that they can charge up to 15% more than what Medicare approves, in which case either you or your medigap just pays a little more.
Services covered by Medicare are public information and universal. That means everyone who has it, gets the same care at the same cost and it is public information. It is even public information if someone does not accept Medicare or Medicare assignment.
So, with Original Medicare you have A for hospital, B for doctors, then we come to D.
D stands for Drugs, that’s how I remember it. I say D stands for drugs and it also stands for “date” - You should date your drug plan, don’t marry them. What in the world do I mean by that? When you’re eligible for Medicare, for the first time in your life, if you have original Medicare, you are eligible to choose your own prescription drug coverage based on what you actually take, where you prefer to go to the pharmacy and where you live. You have never had this right before. Imagine asking suzy in HR for some money back because you only take one statin. No- it’s never been up to you. Someone else has always made this decision for you. Every state has several options that range in premium from below $10 per month to over $100 per month depending on the plan that you choose. These plans are the same in the way they are structured, but vary in formulary which means, they can charge different premiums, copays, deductibles. They can have different tiers for different medicine, and they can be preferred at different pharmacies, standard at others, and not accepted at all at the rest.
You can get amazing coverage by plugging your medicine in on the government database. It will give you a list of possible plans in order of least expensive to most expensive based on where you live, what you take and the pharmacy that you use. Isn’t that great? Remember you can “date your drug plan” which is how I remember you can choose different coverage every year. Every year between October 15 and December 7 you can make a change for the following year, by choosing new drug coverage.
So we have A for hospital, b for doctors, date your drug plan, and now….
If you’re following on page 5 of the Medicare and You book, or page 7 of the guide to health insurance for people with medicare, you can take your pen and draw a heart. That’s right a heart around the box that says medicare supplement or medigap. You can draw a heart because you can “marry your supplement.” For the first time in your life you have the right to buy coverage that is guaranteed renewable. That means once you have it, you own a policy. You have a contractual guarantee and being guaranteed renewable means that they can never drop you or change your coverage. You’ve never had that right before. Imagine suzy in Hr. ‘Can I have the plan from 07 when y’all pay for everything and I don’t?” No way. That’s not happening because it has never been your right. When you become eligible for Medicare with Original Medicare, you can not only pick what is covered, but you can choose coverage that can never leave you or change coverage period.
You can buy a medigap in most states for anywhere between $50-$250 depending on the coverage that you choose and the plans you go with. Some states have over 100 options the first year. Medigap plans have standardized coverage, which means on page 11 of the guide to health insurance you can look at minimum standards that these different plans have to cove. That does not mean they are all the same. That also does not mean that you should “get the cheapest one.” The cheapest one, according to the guide to health insurance will likely become the most expensive to own.
Please note that Original Medicare operates on under 2% administrative cost. This is amazing because that means that over 98% of every dollar paid in premiums or taxes goes directly to cover someone’s care. They are not going to use their 1 % and change to publish a brand new guide to health insurance every year if “they were all the same and you should get the cheapest one.” If it was that simple, we could be done. They are not all the same, but there is a guide to choose one.
Page 26 and 27 recommends 3 ways to choose a medigap if you want one. 1. Go to the library. 2. Check the state department of insurance. 3. Weiss ratings. B + or higher.
If you choose to have Original Medicare, you will enjoy A for hospital, B for doctors, date your drug plan, marry your supplement or….
On the other side of the page we find Part C also known as Medicare Advantage. Please note even though it is called Part C and Medicare Advantage, it is not actually a part of original Medicare. It is actually an alternative to original Medicare. Medicare advantage is private health insurance contracted with the government to manage your care instead of original Medicare, not in addition to. Part C is not only state specific it is county specific in what coverage is available to you. You can buy a medicare advantage plan for zero dollars per month all the way up to $400 per month depending on where you live and what is available to you. Most of the time Medicare advantage combines hospital, doctors, and prescription drugs in one HMO or modified regional PPO. The minimum standard that part c has is to cover what A and B would but they can do so within the limited means of their own managed care coverage. This means that they could require prior authorizations, referrals and specific locations to receive care.
While you have a medicare advantage plan you surrender your right to original medicare paying any of your claims. You also surrender your right to your premiums, because your dollars will go to private health insurance companies to help subsidize the cost of your managed care coverage. Some plans have extra benefits that sound attractive like gym memberships and eye exams, but if you buy a medicare advantage plan, you surrender your right to buy a medigap. Medicare supplements guaranteed renewable coverage that you can marry are not available to medicare advantage plan owners because they no longer have original medicare. Since you cannot buy a medigap if you have part c, you will have some out of pocket exposure that will come out of your pocket.
0-45 for doctors, 18-65 for specialist, 195-595 per night in the hospital. 250-850 per ambulance ride, 20% of DME, and 20% of treatments like chemo/radiation.
There are special enrollment and disenrollment periods when you can come off one side of the page back on the other. However, if you change sides after your guaranteed insurable window around your 65th birthday, you could be subject to health questions or medical underwriting to obtain coverage.
Happy early birthday, y’all! You have 3 months before, the month of and up to 3 months after to choose any coverage you want without being denied because of health past, present or potential future. If you want original Medicare your window is a little longer depending on the state where you reside.
Now, you can choose, Original Medicare, A for hospital, B for doctors, date your drug plan, marry your supplement (guaranteed renewable coverage that can never drop you or change), OR surrender your right to original Medicare paying claims while you have Medicare advantage, private health insurance contracted with the government to manage your care instead of original medicare.
If you still have questions, don’t feel bad. Remember there is no one size fits all. Feel free to call me, Ellie Saul, CEO and Mama Bear of Mamabear Resources LLC. 341-226 MAMA that’s 341-226-6262. You worked your whole life for this. Protect your retirement.