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Last Updated: September 20th, 2024

Our Top 3 Medicare Questions Answered! PPO vs. Medigap, Spouse Enrollment, and Employer Coverage at 65

Navigating Medicare can be overwhelming, especially when making the right decisions for your unique situation. During our Medicare 101 events, we frequently encounter three essential questions many people struggle with. Understanding the answers to these questions can help you make informed decisions and avoid potential pitfalls down the road. 

 
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In this blog, we’ll walk through three common Medicare questions that came up during our recent event, offering detailed answers to help you better understand your options. If you prefer to watch instead of read, feel free to check out the video embedded below.

Let’s dive into the three key topics:

  1. What is the difference between a Medicare Advantage PPO and a Medigap plan?
  2. My spouse is turning 65. Should they join the same plan?
  3. If I stay on my employer’s plan past 65, will I face a penalty?


Question 1: What is the Difference Between a Medicare Advantage PPO and a Medigap Plan?

This is one of the most common questions we get, and for good reason. Both Medicare Advantage PPO plans and Medigap plans are designed to fill gaps in traditional Medicare (Parts A and B), but they do so in very different ways. Understanding the differences between these two options is critical to making the right decision for your healthcare needs.

Medicare Advantage PPO Plans:

A Medicare Advantage PPO (Preferred Provider Organization) plan is offered by private insurance companies and serves as an alternative to Original Medicare. While it includes Part A (hospital insurance) and Part B (medical insurance), it also bundles additional services that Original Medicare doesn’t typically cover.

Here are the key characteristics of a Medicare Advantage PPO plan:

  • Network of Providers: PPO plans have a network of preferred doctors, hospitals, and healthcare providers. You can visit any doctor within this network for a lower copay or coinsurance. You also have the flexibility to go out of network, but it will generally cost more.
  • No Referral Needed for Specialists: Unlike HMO plans, which require referrals to see specialists, PPO plans allow you to see specialists without needing a referral from a primary care physician.
  • Additional Benefits: Most Medicare Advantage plans (including PPO plans) offer additional benefits like prescription drug coverage (Part D), dental, vision, hearing, and wellness programs.
  • Cost: Medicare Advantage plans often come with low or no monthly premiums, but you will need to pay copays or coinsurance when accessing services. They also have an annual maximum out-of-pocket limit, after which the plan covers 100% of eligible costs.

Medicare Supplement (Medigap) Plans:

Medigap plans, also offered by private insurers, supplement Original Medicare by covering certain costs that Medicare Parts A and B don’t, such as deductibles, copayments, and coinsurance.

Here’s how Medigap plans differ from Medicare Advantage PPO plans:

  • No Network Restrictions: With a Medigap plan, you can see any doctor or specialist that accepts Medicare, anywhere in the United States. There are no network limitations, which can be a significant benefit if you travel frequently or live in different states throughout the year.
  • No Referral Needed: Like PPO plans, Medigap plans do not require you to get a referral to see a specialist.
  • Minimal Out-of-Pocket Costs: Medigap plans typically cover most, if not all, of the out-of-pocket costs left by Original Medicare. While the premiums for Medigap plans are generally higher, you’ll have fewer unexpected costs throughout the year.
  • Does Not Include Additional Benefits: Unlike Medicare Advantage plans, Medigap plans do not bundle additional benefits like prescription drug coverage, dental, or vision. If you need prescription drug coverage, you’ll need to purchase a separate Part D plan.

Which One Is Right for You?

The right choice between a Medicare Advantage PPO and Medigap depends on your personal healthcare needs and financial situation. If you prefer flexibility in choosing healthcare providers, travel frequently, or want predictable out-of-pocket costs, a Medigap plan might be the best option. On the other hand, if you’re looking for lower premiums and additional benefits and don’t mind using a network of providers, a Medicare Advantage PPO plan could be the better fit.

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Question 2: My Spouse is Turning 65. Should They Join the Same Plan?

This is another common question we hear from couples navigating Medicare enrollment together. While it might seem like joining the same plan is the easiest option, the answer really depends on the type of Medicare plan you have and both of your healthcare needs.

Medicare Advantage PPO Plans:

If you have a Medicare Advantage PPO plan, deciding whether your spouse should join the same plan is not always straightforward. Here’s why:

  • Doctor and Prescription Network: Each Medicare Advantage plan has a specific network of doctors and hospitals. If your spouse’s preferred doctors or specialists are not in the network, it may not be the best choice for them. Similarly, if their prescription medications are not covered or are more expensive on the plan, that could be a red flag.
  • Individual Healthcare Needs: Even though you may be on the same plan, each person’s healthcare needs are different. A plan that works well for you might not work well for your spouse if they have different doctors or medical conditions that require different treatments or specialists.

Our Advice: When it comes to Medicare Advantage plans, it’s essential to evaluate the plan’s network and drug formulary for each person’s specific needs. If the plan meets both your needs and your spouse’s needs, then joining the same plan could make sense. However, it’s not a one-size-fits-all decision, and your spouse may need a different plan based on their doctors and prescriptions.

Medigap Plans:

If you have a Medigap plan, the answer is more straightforward. Medigap plans do not have provider networks, so your spouse will have the same flexibility to see any doctor that accepts Medicare, anywhere in the country.

  • Simplifying with the Same Plan: If you both have similar healthcare needs, it can simplify your lives to have the same Medigap plan. This way, you can both access any doctor or specialist that accepts Medicare, and you won’t have to worry about networks or referrals.
  • Household Discounts: Some insurance companies offer household or spousal discounts on Medigap plans. These discounts can help reduce the cost of premiums if both you and your spouse enroll in the same Medigap plan.

Our Advice: If you have a Medigap plan, enrolling your spouse in the same plan makes sense for simplicity and cost savings. Just be sure to explore any potential discounts that may apply.

Additional Considerations:

  • Medicare Advantage Plans: If you’re eligible for Medicare, consider Medicare Advantage plans. These plans often offer additional benefits, such as prescription drug coverage, dental, and vision care, but they may have limitations on your choice of providers.
  • Medicaid and Medicare Savings Plans (MSPs): If you have limited income and assets, you may be eligible for Medicaid or a Medicare Savings Plan (MSP). These programs can help reduce your out-of-pocket costs for Medicare.
  • Veterans Benefits: If you or your spouse served in the military, you may be eligible for veterans benefits, including healthcare coverage.
  • Employer Retirement Plans: Many employers offer retirement plans with health insurance options. If you’re still working, be sure to understand the options available to you.
  • State-Specific Programs: Some states offer programs that can help with healthcare costs for low-income individuals and families.
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Question 3: If I Stay on My Employer’s Plan Past 65, Will I Face a Penalty?

Another question that often comes up is whether staying on your employer’s health plan after turning 65 will result in a penalty. The answer to this question is it depends. There are a few factors to consider:

Medicare Part B Enrollment:

If you are still working past the age of 65 and covered by your employer’s health insurance, you may not need to enroll in Medicare Part B right away. However, there are specific rules that apply:

  • Employer Size Matters: If you work for a company with 20 or more employees, your employer’s health insurance is considered “primary,” and you can delay Part B without facing a late enrollment penalty. Once you stop working or lose your employer coverage, you’ll have a special enrollment period to sign up for Part B without a penalty.
  • If You Work for a Small Employer: If your employer has fewer than 20 employees, Medicare becomes your primary coverage when you turn 65. In this case, you need to sign up for Part B to avoid a penalty, as your employer plan is considered secondary to Medicare.


 Creditable Prescription Drug Coverage (Part D): 
 You also need to consider your prescription drug coverage. If your employer’s health plan includes creditable prescription drug coverage, meaning it is as good   as or better than Medicare’s Part D coverage, you can delay enrolling in a Part D plan without facing a penalty. However, if your employer coverage is not   creditable, you may face a late enrollment penalty if you don’t sign up for a Part D plan when you first become eligible.

 Our Advice: To avoid any penalties, check with your employer’s benefits administrator to ensure that your health coverage and prescription drug coverage are   creditable. If they are, you can delay Medicare enrollment without worry. If they’re not, it’s essential to sign up for Medicare Parts B and D to avoid late enrollment   penalties.

Conclusion: Making the Right Decision for Your Medicare Needs

Deciding between Medicare Advantage PPO and Medigap, figuring out whether your spouse should join the same plan, and navigating employer coverage past age 65 are common but complex questions. The answers to these questions depend on individual circumstances, and it’s important to assess your healthcare needs carefully.

If you still have questions, we encourage you to reach out to us or watch our Medicare 101 video presentation for more information.

Questions? Schedule Your Medicare Review Here

Last Updated: August 14th, 2024

Avoiding the Most Common Medicare Mistakes

  • A Comprehensive Guide for First-Time Beneficiaries

Choosing a Medicare plan for the first time can be a complex and confusing process. With so many options and variables to consider, making mistakes can easily have significant financial and health consequences. These include not checking if your doctors are in-network and not ensuring that your prescriptions are covered, along with understanding co-pays. We’ll provide tips to help you make informed decisions and avoid these errors.

Understanding Medicare: An Overview

Medicare is a federal health insurance program primarily for individuals aged 65 and older, though it also covers some younger people with disabilities. It consists of several parts:

  • Part A (Hospital Insurance): Covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
  • Part B (Medical Insurance): Covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
  • Part C (Medicare Advantage): An alternative to Original Medicare that offers all Part A and B benefits and often includes Part D (prescription drug coverage) and additional benefits like dental and vision care.
  • Part D (Prescription Drug Coverage): Provides coverage for prescription medications.

Each part of Medicare has its own rules and coverage options, and selecting the right plan requires careful consideration of your specific health needs and preferences.

Mistake #1: Not Confirming Doctors Are In-Network

One of the most common and impactful mistakes new Medicare beneficiaries make is failing to confirm that their doctors are in-network with their chosen plan. This includes your primary care physician and any specialists you see regularly. Medicare Advantage plans, in particular, often have specific networks of doctors and hospitals. Going out-of-network can result in significantly higher costs or even the denial of coverage for services.

Why Network Confirmation Is Crucial

Ensuring that your doctors are in-network is essential for several reasons:

  • Cost Savings: In-network providers have agreed to accept the insurance plan’s payment terms, which typically results in lower out-of-pocket costs for you.
  • Continuity of Care: Staying with your current doctors allows for uninterrupted care, which is particularly important for managing chronic conditions or ongoing treatments.
  • Access to Specialists: Confirming that your specialists are in-network ensures that you can continue receiving the specialized care you need without additional financial burdens.

Tips for Confirming Doctor Networks

To avoid this mistake, follow these steps:

  1. Make a List of Your Doctors: Start by listing all your current healthcare providers, including primary care physicians, specialists, and any other practitioners you see regularly.
  2. Check Carrier Websites: Most insurance carriers have online tools that allow you to search for in-network doctors by name, location, and specialty. Use these tools to verify that your doctors are included in the network of any plan you are considering.
  3. Call Your Doctors: Contact your doctors’ offices directly to confirm that they accept the insurance plan you are considering. This step can help avoid any discrepancies or outdated information on carrier websites.
  4. Seek Assistance from a Licensed Agent: At Policy Engineer, Our agents can provide personalized assistance in verifying doctor networks and can offer additional insights based on their expertise.

Real Client Example: Importance of Doctor Network

Consider the case of Tom, a client who had a long-standing relationship with his primary care physician and several specialists. When he first enrolled in Medicare, he selected a Medicare Advantage plan without verifying whether his doctors were in-network. As a result, he faced higher costs for out-of-network visits and had to switch doctors for some of his care. This disruption was both stressful and costly. By switching to a plan that included his preferred doctors, Tom was able to continue his care without interruption and avoid unnecessary expenses.

Mistake #2: Not Confirming Prescription Coverage and Understanding Co-Pays

Another common mistake is not ensuring that all your medications are covered by your chosen plan and not understanding the associated co-pays. Each Medicare Part D plan and Medicare Advantage plan with prescription drug coverage has a formulary, which is a list of covered drugs. The cost of medications can vary significantly between plans, and not all plans cover all medications.

Why Prescription Coverage Confirmation Is Crucial

Ensuring that your prescriptions are covered is vital for several reasons:

  • Cost Savings: Different plans have different formularies and co-pay structures. Confirming coverage and understanding co-pays can help you avoid high out-of-pocket costs.
  • Access to Necessary Medications: Ensuring your medications are covered prevents interruptions in treatment and ensures you have access to the drugs you need.
  • Preferred Pharmacies: Some plans offer lower co-pays at preferred pharmacies. Knowing which pharmacies are preferred can result in additional savings.

Tips for Confirming Prescription Coverage

To avoid this mistake, follow these steps:

  1. Prepare a Medication List: Start by making a comprehensive list of all the medications you take, including dosages and frequency.
  2. Use Our Medicare Plan Finder Tools: Policy Engineer has online tools that allow you to search for your medications and compare costs across different plans. Use these tools to ensure your medications are covered and to understand the co-pays.
  3. Review Plan Documents: Carefully review the plan’s formulary and drug tiers. Understanding which tier your medications fall into can give you a clearer picture of your potential costs.
  4. Check Preferred Pharmacies: Some plans have agreements with certain pharmacies to offer lower co-pays. Check if your preferred pharmacy is included in the plan’s network.
  5. Consult with a Licensed Agent: At Policy Engineer, our agents can provide personalized assistance in verifying medication coverage and can offer additional insights based on their expertise.

Real Client Example: Importance of Medication Coverage

Consider the case of Jane, a client who takes several medications for chronic conditions. When she first enrolled in Medicare, she chose a plan based on its low monthly premium without checking its formulary. She soon discovered that one of her essential medications was not covered, leading to out-of-pocket expenses that strained her budget. After consulting with us, Jane switched to a plan that covered all her medications, saving her hundreds of dollars annually.

medicare guide
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Additional Tips to Avoid Common Medicare Mistakes

In addition to confirming doctor networks and prescription coverage, there are other steps you can take to ensure you choose the right Medicare plan for your needs:

  1. Understand Your Health Needs: Assess your current health status and anticipate future needs. Consider how often you visit doctors, the types of specialists you see, and any upcoming medical procedures.
  2. Compare Multiple Plans: Don’t settle for the first plan you come across. Compare multiple plans to find one that offers the best balance of coverage and cost.
  3. Utilize Free Resources: Take advantage of free resources available online. Visit policyengineer.com/medicare for our comprehensive Medicare 101 handbook. This resource covers the basics of Medicare, including parts A, B, C, and D, plan options, and common changes in the Medicare system.
  4. Attend Educational Events: Join our weekly live events to get a comprehensive overview of Medicare and the latest updates. These sessions provide an opportunity to ask questions and get real-time answers from our Medicare experts.
  5. Stay Informed About Changes: Medicare policies and plan details can change annually. Stay informed about any changes that might affect your coverage and costs.
Make sure to avoid these two Medicare mistakes before enrolling

How to Enroll in Part B of Medicare

Enrolling in Medicare Part B is a crucial step for most beneficiaries, and doing it right can save you time and hassle. The easiest way to enroll is online via the Social Security website (SSA.gov). At Policy Engineer, we provide step-by-step guidance on our site to help you through this process. Whether you’re enrolling for the first time or switching plans, our resources are designed to make the process as smooth as possible.

Takeaways and Tips for Making Informed Decisions

Here are some key takeaways and tips to help you avoid common Medicare mistakes and make informed decisions:

  • Verify Doctor Networks: Always confirm that your primary care physician and specialists are in-network before enrolling in a plan. Use carrier websites, contact doctors directly, and seek help from Medicare advisors.
  • Check Prescription Coverage: Ensure that all your medications are covered by the plan’s formulary and understand the co-pays. Use online tools and consult with Medicare advisors to compare plans and costs.
  • Understand Plan Details: Carefully review plan documents and understand the coverage, costs, and network restrictions. Consider how the plan fits your current and future health needs.
  • Utilize Preferred Pharmacies: Check if your preferred pharmacy is included in the plan’s network to take advantage of lower co-pays.
  • Stay Informed and Seek Help: Medicare can be complex and confusing. Utilize free resources, attend educational events, and seek personalized assistance from Medicare advisors to stay informed and make confident decisions.

Conclusion

Navigating Medicare can be challenging, but with the right knowledge and resources, you can avoid common mistakes and choose a plan that best meets your needs. By confirming that your doctors are in-network and ensuring your prescriptions are covered with an understanding of the co-pays, you can save money and maintain continuity of care. Utilize the free resources from Policy Engineer to stay informed and make confident decisions about your Medicare coverage.

Remember, making the right choices about your Medicare plan can have a significant impact on your health and finances. Don’t hesitate to reach out for help and take advantage of the resources available to you. With careful planning and informed decisions, you can navigate Medicare with confidence and peace of mind.

Free Resources and How to Enroll in Medicare

Navigating Medicare can be complex, but there are resources available to help:

Free Resources

  • Medicare 101 Handbook: Visit policyengineer.com/medicare for our comprehensive Medicare 101 handbook, covering all parts of Medicare, plan options, and common changes in the system.
  • Weekly Live Events: Join our weekly live events to get a comprehensive overview of Medicare and the latest updates.
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Make sure to avoid these two Medicare mistakes before enrolling

Medicare Part A Guide

Make sure to avoid these two Medicare mistakes before enrolling

Last Updated: August 14th, 2024

Last Updated: August 13th, 2024

Medicare made simple 

  • Medicare: A Step-by-Step Guide

Navigating the complexities of Medicare can be overwhelming, but understanding your options is crucial for making informed decisions about your healthcare coverage. In this blog, we will break down the four parts of Medicare—Parts A, B, C, and D—and explain Medigap plans to help you better understand and navigate the system.

What is Medicare?

Medicare is health insurance for individuals aged 65 and older, as well as for those under 65 with disabilities and individuals of any age with End-Stage Renal Disease. It is important to note that while many individuals choose Original Medicare for their Parts A and B benefits, it may not provide sufficient coverage, leading to significant out-of-pocket costs.

1. Who is Eligible for Medicare?

  • 65 years old or older
  • Under 65 years old and have a disability.
  • Receiving Social Security Disability Insurance (SSDI) or Railroad Retirement Board (RRB) Disability Insurance (DI) benefits
  • Have End-Stage Renal Disease (ESRD)
  • US Citizen
If you have Social Security when you turn 65
You will be automatically enrolled in Medicare Part B and will receive your Medicare card three months before your birthday.
 
If you don’t receive Social Security income when you turn 65
You will need to take the step to sign up for Medicare



2. What Are The Parts Of Medicare?

 

Medicare Part A: Hospital Insurance

Medicare Part A is often referred to as hospital insurance. It covers:

  • Inpatient Hospital Stays: This includes semi-private rooms, meals, general nursing, and other hospital services and supplies.
  • Skilled Nursing Facility Care: After a hospital stay, Part A covers skilled nursing care in a facility for a limited time.
  • Hospice Care: For those with a terminal illness, Part A covers hospice care, including support services for the patient and their family.
  • Home Health Care: Part A also covers certain home health services if you meet specific criteria.

Key Points about Medicare Part A

  • Most people don’t pay a premium for Part A if they have paid Medicare taxes for a sufficient period while working.
  • There are deductibles and coinsurance costs associated with services covered by Part A.

Medicare Part B: Medical Insurance

Medicare Part B covers:

  • Doctors’ Services: This includes visits to your doctor and outpatient care.
  • Outpatient Care: Medical services or supplies needed to diagnose or treat a medical condition.
  • Medical Supplies: Items such as wheelchairs and walkers that are medically necessary.
  • Preventive Services: Screenings, vaccinations, and other preventive services to help prevent illness or detect it at an early stage.

Key Points about Medicare Part B

  • Part B has a monthly premium, which varies based on your income.
  • There is an annual deductible and coinsurance, which is typically 20% of the Medicare-approved amount for services.

Medicare Part C: Medicare Advantage

Medicare Part C, also known as Medicare Advantage, offers an alternative to Original Medicare (Parts A and B). These plans are offered by private insurance companies approved by Medicare and often include additional benefits such as:

  • Prescription Drug Coverage: Many Medicare Advantage plans include Part D coverage.
  • Extra Value Adds: Many plans offer areas of coverage not covered by Original Medicare, adding value with various extra features and services.
  • Wellness Programs: Access to fitness programs and wellness services.

Key Points about Medicare Part C

  • You must be enrolled in both Part A and Part B to join a Medicare Advantage plan.
  • Medicare Advantage plans often have networks of doctors and hospitals you must use to get the lowest costs.

Medicare Part D: Prescription Drug Coverage

Medicare Part D provides prescription drug coverage and is available through private insurance companies. This coverage helps lower the cost of medications and protects against higher costs in the future.

Key Points about Medicare Part D

  • Part D plans have a monthly premium, an annual deductible, and copayments or coinsurance.
  • Coverage and costs can vary widely between different Part D plans, so it’s important to compare options.

Medigap Plans: Supplemental Insurance

Medigap, or Medicare Supplement Insurance, helps cover some of the healthcare costs that Original Medicare doesn’t cover, such as copayments, coinsurance, and deductibles. Medigap plans are sold by private insurance companies and can offer different levels of coverage.

Key Points about Medigap Plans

  • You must have Medicare Part A and Part B to buy a Medigap policy.
  • Medigap policies are standardized, meaning that each plan of the same letter offers the same basic benefits, regardless of the insurance company.
  • Medigap policies do not cover prescription drugs (you need Part D for that).

Medicare Prescription Drugs (part D)

Medicare Part D is a prescription drug program offered by private insurance companies approved by Medicare. It helps cover the cost of prescription drugs that are not covered by Medicare Part A or Part B.

There are different costs associated with Medicare Part D, including premiums, deductibles, copayments, and coinsurance. Premiums are the amount you pay each month to have Part D coverage. Deductibles are the amount you pay out of pocket before your plan begins to cover your prescriptions. Copayments and coinsurance are the amounts you pay for each prescription or refill.

Part D coverage costs vary depending on the plan you choose and the medications you take. Each plan has a formulary, which is a list of covered medications and their costs. It’s important to review each plan’s formulary to make sure the medications you need are covered and to review costs.

medicare guide
Click here to review plans & self- enroll

3. Medicare enrollment periods

You can enroll in Medicare during the following times:

  • Initial Enrollment Period: Lasts for seven months; your sign-up window is from 3 months before your birth month when you turn 65 to 3 months later. It would be best if you enrolled in Medicare Part A and Part B during this sign-up window to avoid penalties. If you don’t register in time, you may have to pay the penalty for parts B and D.
  • Annual Enrollment Period: Anyone can use the Annual Election Period (AEP) to make changes to their Medicare coverage – October 15 to December 7
  • Open Enrollment Period: January 1 to March 31
    Lock-in Period: April 1 to December 31
  • Special Enrollment Period (SEP): Special circumstances within the year, You may qualify for a SEP if you have a qualifying life event, such as moving, losing your job, or getting married.
  • Medicare Birthday Rule: The Medicare birthday rule allows consumers to change to an equal or lesser benefit Medigap policy within a 60-day window without medical underwriting (not available in all states).
Watch Our Medicare 101 Series On Youtube
Medicare Guide to Parts A, B, C, D, and Medigap Plans

4. Ways to Sign up for Original Medicare:

Enrolling in Medicare is straightforward and can be done online via the Social Security website (SSA.gov). Here’s how:

  1. Online Enrollment: This is usually the easiest and fastest way to enroll. Visit the Social Security website and follow the instructions.
  2. In-Person or Phone Enrollment: You can also enroll by visiting your local Social Security office or calling the Social Security Administration.

For more detailed guidance on the enrollment process, visit our website, where we provide step-by-step instructions and tips.

How To Sign Up for an Additional Medicare Plan 

  1. With our Medicare plan finder tool, you can review the available plans in your zip code. You can do this yourself or with the help of a licensed agent. Determine the type of insurance you need by entering your doctors, prescriptions, etc…
  2. Check the star rating when selecting a Medicare plan. These ratings are updated every year and will help you review them.
  3. Complete an online application yourself or schedule a virtual meeting to enroll with a licensed insurance agent from Policy Engineer.

5. Medicare Penalties

Medicare Part B and Part D have late enrollment penalties if you don’t enroll when you’re first eligible.

Medicare Part B

If you don’t enroll in Medicare Part B when you’re first eligible, you may have to pay a late enrollment penalty. The penalty is 10% of the monthly premium for each 12-month period that you could have enrolled but didn’t. For example, if you don’t enroll in Part B until you’re 70, you’ll have to pay a 30% penalty on your monthly premium for the rest of your life.

Medicare Part D

If you don’t enroll in Medicare Part D when you’re first eligible, you may have to pay a late enrollment penalty. The penalty is 1% of the “national base beneficiary premium” for each full, uncovered month you didn’t have Part D or creditable prescription drug coverage. The national base beneficiary premium is $32.74 in 2023. The monthly penalty is rounded to the nearest $0.10 and added to your monthly Part D premium.

How to avoid the penalties

The best way to avoid the late enrollment penalties is to enroll in Medicare Part B and Part D when first eligible. You can enroll in Part B online or by phone, or by visiting your local Social Security office. You can enroll in Part D online, by telephone, or by visiting your local Medicare plan.

If you miss your initial enrollment period, you may still be able to enroll in Part B or Part D during a Special Enrollment Period (SEP). SEPs are available if you have a qualifying life event, such as moving, losing your job, or getting married.

Understanding Medicare is essential for making informed decisions about your healthcare coverage. By breaking down Parts A, B, C, and D, and explaining Medigap plans, we hope to make Medicare easier to navigate. Utilize the available resources, stay informed about your options, and choose the coverage that best fits your needs.

Remember, the right Medicare plan can provide peace of mind and ensure you have access to the healthcare services you need. Start planning today by exploring your options and seeking professional advice if needed.

Free Resources and How to Enroll in Medicare

Navigating Medicare can be complex, but there are resources available to help:

Free Resources

  • Medicare 101 Handbook: Visit policyengineer.com/medicare for our comprehensive Medicare 101 handbook, covering all parts of Medicare, plan options, and common changes in the system.
  • Weekly Live Events: Join our weekly live events to get a comprehensive overview of Medicare and the latest updates.
Request Handbook
Medicare Guide to Parts A, B, C, D, and Medigap Plans

Medicare Part A Guide

Medicare Guide to Parts A, B, C, D, and Medigap Plans

Last Updated: August 15th, 2024

Navigating the Choice Between Employer Insurance & Medicare

Making healthcare decisions can be daunting, especially as you approach eligibility for Medicare. One significant choice many individuals face is whether to stick with their employer’s health insurance or transition to a Medicare Plan. In this blog post, we’ll explore the key factors to consider when making this decision and offer guidance to help you navigate your options effectively.

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1. Understanding Your Options:


Employer Health Insurance:

Employer-sponsored health insurance plans vary widely in terms of coverage, cost, and provider networks. Typically, these plans offer a range of benefits, including coverage for medical services, prescriptions, and preventive care. Understanding the specifics of your employer’s plan, such as the type (HMO, PPO, etc.), network limitations, and out-of-pocket costs, is crucial for making an informed decision.

Medicare Plans:

Medicare is a federal health insurance program primarily for individuals aged 65 and older, as well as some younger individuals with disabilities. It consists of several parts, including Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage). Each part offers different levels of coverage and comes with its own costs and considerations.

2. Weighing the Factors:

Price Comparison:

Comparing the costs of employer insurance versus Medicare involves evaluating premiums, deductibles, copayments, and out-of-pocket maximums. While employer plans may offer subsidies, Medicare premiums vary based on income and can include additional costs for prescription drug coverage and supplemental insurance (Medigap).

Coverage Scope:

Consider the breadth of coverage and provider flexibility offered by both employer insurance and Medicare. Employer plans may have network restrictions, whereas Medicare allows for greater choice in healthcare providers but may come with certain limitations depending on the type of plan selected.

Creditable Coverage:

Understanding whether your employer insurance provides “creditable coverage” is crucial for avoiding penalties when enrolling in Medicare. Employers are required to disclose this information, which determines whether your current coverage meets Medicare’s standards.

Employer Requirements:

Some employers may require retirees to enroll in Medicare Part B to maintain coverage. It’s essential to review your employer’s policies and consult with HR to understand any requirements that may impact your decision.

Special Considerations:

State-specific variations: Medicare plans and coverage options can vary depending on your state. It’s recommended to research your specific state’s Medicare landscape for more detailed information.

Medigap: Medigap plans help supplement Medicare coverage by filling in gaps like deductibles and copayments.

Employer Size: The size of your employer plays a crucial role in determining your healthcare options and coverage continuation after leaving your job. Employers with 20 or more employees are mandated by federal law to offer COBRA coverage to eligible employees. COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act, allows you to continue your employer-based health insurance for a limited period, usually up to 18 months, after leaving your job or experiencing a qualifying event such as termination, reduction in hours, or other qualifying life events.

While COBRA provides a valuable safety net for maintaining health insurance coverage during transitional periods, it’s essential to be aware that COBRA can be expensive. As a COBRA participant, you are responsible for the entire premium, including the portion previously subsidized by your employer. This often results in significantly higher monthly premiums than what you were previously paying as an active employee. Therefore, individuals opting for COBRA coverage should carefully assess the financial implications and explore alternative coverage options, such as Medicare or individual health insurance plans, to ensure cost-effectiveness.

Medicare Coordination: For employees of large companies with 20 or more employees, another viable option is to coordinate Medicare with your employer’s coverage. Medicare, the federal health insurance program primarily for individuals aged 65 and older, typically serves as secondary insurance when combined with employer-sponsored health insurance. This means that your employer coverage remains primary, covering expenses first, while Medicare serves as secondary insurance, covering costs that your employer plan does not cover.

When considering Medicare coordination with employer coverage, it’s essential to evaluate the costs and benefits of Medicare Parts A and B compared to your employer coverage. Medicare Part A, which covers hospitalization, is often premium-free for individuals who have worked and paid Medicare taxes for a sufficient duration. However, Medicare Part B, which covers medical services and doctor visits, typically requires a monthly premium. By comparing the premiums, deductibles, copayments, and coverage limits of Medicare Parts A and B with your employer’s plan, you can determine the most cost-effective option that best meets your healthcare needs.

3. Making the Decision:

Assessing Your Healthcare Needs:

Take stock of your current healthcare needs and anticipate any future medical services or prescriptions you may require. Consider factors such as chronic conditions, prescription drug coverage, and preferred healthcare providers when evaluating your options.

Evaluating Financial Implications:

Evaluate the financial aspects of both employer insurance and Medicare, including premiums, out-of-pocket costs, and potential retirement savings. Factor in your budget, retirement income, and any available resources for covering healthcare expenses.

Consulting with HR or a Medicare Specialist:

Seek guidance from your HR department to understand the details of your employer’s insurance plan and any implications for Medicare enrollment. Additionally, consider consulting with a Medicare specialist who can provide personalized advice based on your individual circumstances.

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Frequently Asked Questions About Medicare

1. What factors should I consider when deciding between employer insurance and Medicare? When making this decision, it’s essential to consider factors such as your age, employer size, coverage scope, costs (including premiums, deductibles, and copayments), benefits, provider network, and any specific requirements or coordination rules set by your employer or Medicare.

2. How does COBRA coverage work, and is it a cost-effective option? COBRA coverage allows eligible individuals to continue their employer-based health insurance for a limited period after leaving their job or experiencing a qualifying life event. While COBRA provides continuity of coverage, it can be expensive as participants are responsible for the entire premium, including the portion previously subsidized by their employer. It’s essential to assess the financial implications and explore alternative coverage options, such as Medicare or individual health insurance plans, to ensure cost-effectiveness.

3. Can I coordinate Medicare with my employer’s coverage? Yes, individuals working for large companies with 20 or more employees can coordinate Medicare with their employer’s coverage. Medicare typically serves as secondary insurance, covering costs that your employer plan does not cover. It’s crucial to evaluate the costs and benefits of Medicare Parts A and B compared to your employer coverage to determine the most cost-effective option that best meets your healthcare needs.

4. What should I do if I’m approaching Medicare eligibility age and still employed? If you’re nearing Medicare eligibility age and still employed, it’s advisable to review your employer’s health insurance policies, consult with human resources or benefits administrators, and explore your Medicare options. Consider factors such as your healthcare needs, financial situation, and any specific requirements or coordination rules set by your employer or Medicare.

5. How can I make an informed decision about my healthcare coverage options? To make an informed decision, gather information about your employer’s health insurance plan, review Medicare options and eligibility criteria, compare costs and benefits, assess your healthcare needs and financial situation, consult with licensed insurance agents specializing in Medicare, and seek guidance from healthcare professionals.

6. What if my spouse covers me under their employer’s health insurance plan? If your spouse covers you under their employer’s health insurance plan, you may still have options regarding Medicare enrollment. The decision may depend on factors such as your spouse’s employer size, coverage scope, and coordination rules. It’s advisable to assess your healthcare needs, review your spouse’s employer coverage, and explore Medicare options to determine the most suitable healthcare coverage arrangement for your situation.

Last Updated: August 29th, 2024

Understanding the 2024 Medicare Changes: What You Need to Know

On October 12, 2023, the Centers for Medicare & Medicaid Services (CMS) released the 2024 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs and the 2024 Medicare Part D income-related monthly adjustment amounts. These changes will impact millions of Americans and their access to healthcare. In this blog, we will delve into the key changes in Medicare Parts A and B and Part D to help you better understand how these adjustments may affect your healthcare costs in 2024.

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Medicare Costs 2024

Medicare is an essential program that provides health coverage for millions of Americans. However, understanding the costs associated with Medicare can be complex. This guide will help you navigate the costs of Medicare in 2024, including premiums, deductibles, coinsurance, and copayments. We will also discuss the various coverage options available to you.

Coverage options:

Medicare offers different coverage options to cater to your specific needs. These options include Original Medicare (Part A and Part B), Medicare Advantage Plans (Part C), Part D (Prescription Drug Coverage), and Medicare Supplemental Insurance (Medigap). Each option comes with its own set of costs and benefits, so choosing the one that best suits your healthcare needs is essential.

  • In 2024, there will be notable changes in Medicare costs and premiums:

    1. Medicare Part B premiums are set to rise to $174.70, marking an increase from the 2023 rate of $164.90. This adjustment reflects the ongoing evolution of healthcare expenses and the need for sustainable funding.

    2. The deductible amount for Medicare Part A, which beneficiaries are required to pay when they are admitted to a hospital, will rise to $1,632 in 2024. This marks an increase of $32 from the previous year’s amount of $1,600. The rise in deductibles is due to the ever-changing healthcare costs and inflationary factors.

    3. For all Medicare Part B beneficiaries, the annual deductible will be $240 in 2024, up from $226 in 2023. 

1. Medicare Part A (Hospital Insurance) Costs

Medicare Part A covers hospital inpatient care; for most individuals, it comes with a $0 premium. This is because they or their spouse paid Medicare taxes for a minimum of 10 years while working, generally equivalent to at least 40 quarters. This is often referred to as “premium-free Part A.”

However, if you don’t qualify for premium-free Part A, you may be able to buy it at a cost. In 2023, this premium is either $278 or $506, depending on your work history and that of your spouse. These premiums will be $278 or $505 in 2024.

  • Deductible: The Part A deductible in 2023 is $1,600 ($1,632 in 2024) for each inpatient hospital benefit period before Original Medicare starts to pay. It’s important to note that there’s no limit to the number of benefit periods you can have in a year, which means you may pay the deductible more than once in a year.

  • Inpatient Stay:

    • Days 1-60: $0 after you pay your Part A deductible.
    • Days 61-90: $400 ($408 in 2024) *copayment each day.
    • Days 91-150: $800 ($816 in 2024) copayment each day while using your 60 lifetime reserve days.
    • After day 150: You pay all costs.

  • Skilled Nursing Facility Stay: For beneficiaries in skilled nursing facilities

    • Days 1-20: $0 copayment.
    • Days 21-100: $200 ($204 in 2024) copayment each day.
    • Days 101 and beyond: You pay all costs.

  • Home Health Care: $0 for covered home health care services.

  • Hospice Care: $0 for covered hospice care services. However, you may have to pay a copayment of up to $5 for each prescription drug and other similar products for pain relief and symptom control while you’re at home. You also pay 5% of the Medicare-approved amount for inpatient respite care.

*For enrollees age 65 and older who have fewer than 40 quarters of coverage or certain persons with disabilities, a monthly premium is required to voluntarily enroll in Medicare Part A. These premiums vary depending on quarters of coverage:

*Individuals with at least 30 quarters of coverage or who are married to someone with at least 30 quarters of coverage may buy into Part A at a reduced monthly premium rate of $278 in 2024.

*Certain uninsured aged individuals with less than 30 quarters of coverage and individuals with disabilities who have exhausted other entitlement will pay the full premium, which will be $505 a month in 2024, a $1 decrease from 2023.

2. Medicare Part B (Medical Insurance) Costs

Medicare Part B Premium and Deductible Medicare Part B covers essential medical services such as physician visits, outpatient hospital services, durable medical equipment, and various other health services not covered by Medicare Part A. In 2024, there will be significant changes to Part B premiums and deductibles:

  1. Premium Increase: The standard monthly premium for Medicare Part B enrollees will be $174.70 for 2024, a $9.80 increase from $164.90 in 2023. This increase is primarily due to projected increases in healthcare spending and a policy remedy regarding the 340B-acquired drug payment. This amount can be higher depending on your income. You’ll pay this premium each month, even if you don’t get any Part B-covered services.

  2. Deductible Increase: The annual deductible for all Medicare Part B beneficiaries will be $240 in 2024, up from $226 in 2023, an increase of $14. Which you pay before Original Medicare starts to cover your services. This deductible is paid once each year.

  • General Costs for Services (Coinsurance): You usually pay 20% of the cost for each Medicare-covered service or item after you’ve paid your deductible. This applies as long as your doctor or healthcare provider accepts the Medicare-approved amount as full payment.

Clinical Laboratory Services: $0 for covered clinical laboratory services.

  • 20% of the Medicare-approved amount for durable medical equipment (like wheelchairs, walkers, hospital beds, and other equipment).

Inpatient Hospital Care: 20% of the Medicare-approved amount for most doctor services while you’re a hospital inpatient.

Outpatient Mental Health Care:

  • $0 for your yearly depression screening.
  • 20% of the Medicare-approved amount for visits to your doctor or other healthcare provider to diagnose or treat your condition.
  • If you get your services in a hospital outpatient clinic or hospital outpatient department, you may have to pay an additional amount to the hospital.

Partial Hospitalization Mental Health Care: After you meet the Part B deductible, you pay:

  • 20% of the Medicare-approved amount for each service you get from a doctor or certain other qualified mental health professional.
  • Coinsurance for each day of partial hospitalization services you get in a hospital outpatient setting or community mental health center.

Outpatient Hospital Care: Usually 20% of the Medicare-approved amount for doctor and other healthcare providers’ services. You may also pay a copayment to the hospital for each service you get in a hospital outpatient setting.

The 2024 Part B total premiums for high-income beneficiaries with full Part B coverage are shown in the following table:
Medicare Part B Premiums for Full Part B Coverage based on Modified Adjusted Gross Income (MAGI):

Beneficiaries who file tax returns with modified adjusted gross income: (magi) Total Monthly Premium Amount (Individual) Total Monthly Premium Amount (Joint)
Less than or equal to $103,000 (Individual) $0.00 $174.70
Less than or equal to $206,000 (Joint) $0.00 $174.70
Greater than $103,000 and less than or equal to $129,000 (Individual) $69.90 $244.60
Greater than $206,000 and less than or equal to $258,000 (Joint) $69.90 $244.60
Greater than $129,000 and less than or equal to $161,000 (Individual) $174.70 $349.40
Greater than $258,000 and less than or equal to $322,000 (Joint) $174.70 $349.40
Greater than $161,000 and less than or equal to $193,000 (Individual) $279.50 $454.20
Greater than $322,000 and less than or equal to $386,000 (Joint) $279.50 $454.20
Greater than $193,000 and less than $500,000 (Individual) $384.30 $559.00
Greater than $386,000 and less than $750,000 (Joint) $384.30 $559.00
Greater than or equal to $500,000 (Individual) $419.30 $594.00
Greater than or equal to $750,000 (Joint) $419.30 $594.00

Income-Related Monthly Adjustment Amounts for Married Beneficiaries Who File Separate Tax Returns (Full Part B Coverage):

Modified Adjusted Gross Income (MAGI) Adjustment Amount Total Monthly Premium
Less than or equal to $103,000 $0.00 $174.70
Greater than $103,000 and less than $397,000 $384.30 $559.00
Greater than or equal to $397,000 $419.30 $594.00

3. Medicare Advantage Plan (Part C) Costs

Medicare Advantage Plans offer an alternative to Original Medicare. Costs can vary depending on the specific plan you choose. It’s important to have Part B and continue paying your Part B premium to stay in your Medicare Advantage Plan.

  • Premiums & Other Costs: Varies by plan, including deductibles, copayments, and coinsurance. These amounts can change each year.

  • Out-of-Pocket Limit: Varies by plan. Once you reach the plan’s limit, the plan pays 100% of your covered health services for the rest of the calendar year.

4. Medicare Part D (Drug Coverage) Costs

Medicare Part D provides coverage for prescription drugs. Costs can vary depending on the specific Part D plan you choose.

  • Premium: Varies by plan, and it may be higher based on your income. You can avoid paying a penalty by joining a Medicare drug plan when you first get Medicare Part A and/or Part B and ensuring you don’t go 63 days or more without creditable drug coverage.

  • Deductibles, Copayments, & Coinsurance: These costs vary by plan and pharmacy. You can find Medicare drug plans in your area and compare their costs and coverage.

Since 2011, a beneficiary’s Part D monthly premium has been based on their income. These income-related monthly adjustment amounts impact about 8% of people with Medicare Part D. These individuals will pay the income-related monthly adjustment amount in addition to their Part D premium. Here are the 2024 Part D income-related monthly adjustment amounts for high-income beneficiaries:

Income-Related Monthly Adjustment Amounts for Beneficiaries who file individual tax returns and joint tax returns with modified adjusted gross income:

Modified Adjusted Gross Income (MAGI) Adjustment Amount
Less than or equal to $103,000 (Individual) or $206,000 (Joint) $0.00
Greater than $103,000 and less than or equal to $129,000 (Individual) or Greater than $206,000 and less than or equal to $258,000 (Joint) $12.90
Greater than $129,000 and less than or equal to $161,000 (Individual) or Greater than $258,000 and less than or equal to $322,000 (Joint) $33.30
Greater than $161,000 and less than or equal to $193,000 (Individual) or Greater than $322,000 and less than or equal to $386,000 (Joint) $53.80
Greater than $193,000 and less than $500,000 (Individual) or Greater than $386,000 and less than $750,000 (Joint) $74.20
Greater than or equal to $500,000 (Individual) or Greater than or equal to $750,000 (Joint) $81.00

Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year but file a separate return:

Modified Adjusted Gross Income (MAGI) Adjustment Amount
Less than or equal to $103,000 (Separate Tax Return) $0.00
Greater than $103,000 and less than $397,000 (Separate Tax Return) $74.20
Greater than or equal to $397,000 (Separate Tax Return) $81.00

Part D Extra Help

Additional help paying for your prescriptions may be available. You may qualify for a Low-Income Subsidy (LIS) if your yearly income and resources are below certain limits. You may qualify for Extra Help if your assets are not worth more than $33,240 if you are married or $16,660 as a single individual. Your annual income is limited to $29,580 for a married couple living together or $21,870 for an individual.

 

Part D Late Enrollment Penalty

Did not sign up for Part D when first eligible and did not have creditable coverage for more than 63 days? you may have to pay a late enrollment penalty for as long you have part D. The monthly premium will have a penalty of: 1% of the national base premium ($34.70 in 2024) multiplied by the number of full, uncovered months you were eligible.


Part D Catastrophic coverage

In 2023, when your out-of-pocket spending reaches $7,400, You’ll automatically receive catastrophic coverage. This means you’ll pay only a small coinsurance percentage (up to 5%) or copayment for your covered Part D drugs for the remainder of the calendar year.

Starting from January 1, 2024, when your out-of-pocket spending reaches $8,000:

  • You’ll automatically be enrolled in “catastrophic coverage.”
  • This ensures you won’t have to make any copayments or pay coinsurance for covered Part D drugs for the rest of the calendar year.
  • This out-of-pocket spending amount includes certain payments made on your behalf by other individuals or entities, such as Medicare’s Extra Help program.

 

5. Medicare Supplemental Insurance (Medigap) Costs

Medigap policies are designed to cover the costs that Original Medicare (Part A and Part B) doesn’t. The costs for Medigap policies can vary based on the policy you choose, your location, and other factors.

  • Premium: Varies based on the Medigap policy you buy, where you live, and other factors. This amount can change each year. To keep your Medigap policy, you must have Part B and keep paying your Part B premium.

  • Other Costs: Medigap policies usually help pay your portion of the costs (like deductibles and coinsurance) for services that Part A and Part B cover in Original Medicare. The amount you pay for Part A and Part B services with a Medigap policy can vary depending on the policy you buy.

  • The 2024 out-of-pocket (OOP) limits for Medigap plans K & L are $7,060 and $3,530

Medicare Part B covers services such as physician visits and outpatient care. In 2023, the monthly premium for Part B is $164.90 ($174.70 in 2024), although this amount can be higher depending on your income. You’ll pay this premium each month, even if you don’t get any Part B-covered services.

  • Deductible: The Part B deductible is $226 ($240 in 2024), which you pay before Original Medicare starts to cover your services. This deductible is paid once each year.

  • General Costs for Services (Coinsurance): You usually pay 20% of the cost for each Medicare-covered service or item after you’ve paid your deductible. This applies as long as your doctor or healthcare provider accepts the Medicare-approved amount as full payment.

Clinical Laboratory Services: $0 for covered clinical laboratory services.

Home Health Care:

  • $0 for covered home health care services.
  • 20% of the Medicare-approved amount for durable medical equipment (like wheelchairs, walkers, hospital beds, and other equipment).

Inpatient Hospital Care: 20% of the Medicare-approved amount for most doctor services while you’re a hospital inpatient.

Outpatient Mental Health Care:

  • $0 for your yearly depression screening.
  • 20% of the Medicare-approved amount for visits to your doctor or other healthcare provider to diagnose or treat your condition.
  • If you get your services in a hospital outpatient clinic or hospital outpatient department, you may have to pay an additional amount to the hospital.

Partial Hospitalization Mental Health Care: After you meet the Part B deductible, you pay:

  • 20% of the Medicare-approved amount for each service you get from a doctor or certain other qualified mental health professional.
  • Coinsurance for each day of partial hospitalization services you get in a hospital outpatient setting or community mental health center.

Outpatient Hospital Care: Usually 20% of the Medicare-approved amount for doctor and other healthcare providers’ services. You may also pay a copayment to the hospital for each service you get in a hospital outpatient setting.

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Other Changes

Immunosuppressive Drug Coverage

Starting in 2023, individuals whose full Medicare coverage ended 36 months after a kidney transplant and who don’t have certain other types of insurance coverage can continue Part B coverage for immunosuppressive drugs by paying a premium. For 2024, the standard immunosuppressive drug premium will be $103.00.

Income-Related Monthly Adjustment Amounts for Beneficiaries Filing Individual Tax Returns (Part B Immunosuppressive Drug Coverage Only):

Medicare Part B Premiums for Immunosuppressive Drug Coverage Only based on Modified Adjusted Gross Income (MAGI):

MAGI Level Total Monthly Premium Amount (Individual) Total Monthly Premium Amount (Joint)
Less than or equal to $103,000 (Individual) $0.00 $103.00
Less than or equal to $206,000 (Joint) $0.00 $103.00
Greater than $103,000 and less than or equal to $129,000 (Individual) $68.70 $171.70
Greater than $206,000 and less than or equal to $258,000 (Joint) $68.70 $171.70
Greater than $129,000 and less than or equal to $161,000 (Individual) $171.70 $274.70
Greater than $258,000 and less than or equal to $322,000 (Joint) $171.70 $274.70
Greater than $161,000 and less than or equal to $193,000 (Individual) $274.70 $377.70
Greater than $322,000 and less than or equal to $386,000 (Joint) $274.70 $377.70
Greater than $193,000 and less than $500,000 (Individual) $377.70 $480.70
Greater than $386,000 and less than $750,000 (Joint) $377.70 $480.70
Greater than or equal to $500,000 (Individual) $412.10 $515.10
Greater than or equal to $750,000 (Joint) $412.10 $515.10

Income-Related Monthly Adjustment Amounts for Married Beneficiaries Who File Separate Tax Returns (Part B Immunosuppressive Drug Coverage Only):

Modified Adjusted Gross Income (MAGI) Adjustment Amount Total Monthly Premium
Less than or equal to $103,000 $0.00 $103.00
Greater than $103,000 and less than $397,000 $377.70 $480.70
Greater than or equal to $397,000 $412.10 $515.10
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Frequently Asked Questions About Medicare

Q1: What are Medicare premiums?

Medicare premiums are monthly fees that individuals pay to enroll in certain parts of the Medicare program. The primary parts of Medicare are Part A (Hospital Insurance), Part B (Medical Insurance), Part C (Medicare Advantage), and Part D (Prescription Drug Coverage).

Q2: Are there different types of Medicare premiums?

Yes, there are different types of Medicare premiums. Part A premiums are based on your work history and can be premium-free for most people. Part B and Part D premiums are based on income and may vary.

Q3: How are Medicare premiums determined for Part B and Part D?

Medicare Part B and Part D premiums are income-based. The higher your Modified Adjusted Gross Income (MAGI), the higher your premium may be. The adjustment amounts are added to the standard premium for individuals with higher incomes.

Q4: What is Modified Adjusted Gross Income (MAGI)?

MAGI is a measure of income used to determine Medicare premium adjustments. It includes your adjusted gross income plus any tax-exempt interest income.

Q5: Can I find out my specific premium and adjustment based on my income?

Yes, you can find out your exact premium and adjustment amounts by checking the Medicare website or contacting Medicare directly. They provide tables and calculators to help you determine your costs based on your income.

Q6: Do Medicare premiums change annually?

Yes, Medicare premiums are subject to change each year. They can increase or decrease based on various factors, including inflation and changes in healthcare costs.

Q7: What is a Medicare deductible?

A Medicare deductible is the amount you must pay out of pocket before Medicare starts covering certain healthcare services. Both Part A and Part B have deductibles.

Q8: Do the Medicare deductibles change from year to year?

Yes, Medicare deductibles can change annually. The specific amounts for deductibles are updated to account for changes in healthcare costs.

Q9: What is the purpose of Medicare premium adjustments?

Medicare premium adjustments are designed to ensure that individuals with higher incomes contribute more to the Medicare program. These adjustments help fund the program and provide financial support to those with lower incomes.

Q10: How can I get help with Medicare costs if I have a limited income?

If you have limited income and resources, you may be eligible for assistance to help cover Medicare premiums and other costs. Your state may offer programs to provide financial support.

Q11: Can I avoid penalties if I don’t sign up for Medicare Part A or Part B when first eligible?

In some cases, delaying enrollment in Part A or Part B can result in penalties. To avoid these penalties, it’s generally recommended to enroll during your initial enrollment period.

Q12: Can I switch between different Medicare parts or plans based on my changing needs?

Yes, you can change your Medicare coverage during certain enrollment periods. These periods include the Annual Enrollment Period and Special Enrollment Periods, depending on your circumstances.

Q13: Where can I find more information about Medicare premiums, deductibles, and adjustments?

For detailed information about Medicare premiums, deductibles, and adjustments, you can visit the official Medicare website, contact Medicare directly, or consult with a qualified healthcare professional.

Last Updated: August 15th, 2024

Social Security Benefits Will Rise 3.2% in 2024

On Thursday, October 12, 2023, the Social Security Administration announced that Social Security benefits will increase by 3.2% in 2024. This is a significant decrease from the 8.7% increase in 2023, which was the largest increase in four decades.

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3.2% in 2024

The 3.2% increase will average $59 more per month for Social Security beneficiaries. The average monthly check will be $1,907, up from $1,848 in 2023. The increase will take effect starting in January 2024. This is a significant decrease from the 8.7% increase in 2023, which was the largest increase in four decades.

  • The COLA increase will apply to Supplemental Security Income (SSI) benefits.
  • The maximum amount of earnings subject to Social Security tax (taxable maximum) will increase to $168,600 in 2024.
  • The COLA increase will not apply to Medicare Part B premiums, which are expected to increase by 5.9% in 2024.

Why the decrease in the increase?

The cost-of-living adjustment (COLA) for Social Security benefits is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W is a measure of inflation that tracks the prices of goods and services that are commonly purchased by urban wage earners and clerical workers.

The CPI-W increased by 8.7% in the year ending September 2022, which is the highest rate of inflation in the United States since 1981. However, the CPI-W is expected to moderate in 2023, which is why the COLA for 2024 is lower.

What does this mean for Social Security Beneficiaries?

The 3.2% increase in Social Security benefits will help to offset the rising costs of living, but it is important to note that it will not fully keep up with inflation. This means that Social Security beneficiaries may still see their purchasing power decline in 2024.

  • The COLA increase is lower than the current inflation rate, which means that Social Security beneficiaries will still be losing purchasing power.
  • The COLA increase is not enough to keep up with the rising cost of healthcare, which is a major expense for many Social Security beneficiaries.
  • Many Social Security beneficiaries rely on their benefits to meet their basic needs, such as food and housing. The COLA increase will help to ensure that they can continue to afford these necessities.

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What are the Income Limits for 2024?

The maximum amount subject to Social Security tax will increase to $168,600.

The Social Security Administration sets its income limits for people receiving Social Security benefits yearly. This is the amount you are allowed to earn without getting a reduction on your Social Security payments. If you make more than the limit ($22,320 in 2024), your benefits will be reduced (if you are younger than the retirement age). Luckily these reductions will be returned to you when you reach full retirement. The social security benefits are only withheld temporarily.

If you’re younger than full retirement age during all of 2024, they will deduct $1 from your benefits for each $2 you earn above $22,320. If you reach full retirement that year, the limit changes to $59,520 (2024). They will deduct $1 in benefits for every $3 you earn above the limit.

If you are older than full retirement and decide to work, you will receive your full benefits; there are no income limits.

For more examples, visit ssa.gov. 
*note: there are different rules if you work outside the country or are on disability.

You will automatically enroll in Original Medicare (Part A and Part B) when you turn 65. Check before signing up for Medicare Part B if you or your spouse are still covered under an employer-provided group health plan.

 

What can Social Security Beneficiaries do?

There are a few things that Social Security Beneficiaries can do to prepare get the most out of their benefits:

  • Review your budget. Take some time to review your budget and see how the increase in your benefits will impact your spending. 
  • Plan for retirement. If you are retired, the increase in your benefits can help you to maintain your retirement lifestyle. However, it is important to continue to plan for retirement and to make sure that you have enough savings to last throughout your retirement years.
  • Consider annuity guaranteed income. Annuities are a financial product that can provide a regular stream of income, which can complement your Social Security benefits. Exploring annuity options may help you secure additional financial stability during retirement. Work with a licensed financial services professional to determine if this strategy fits your needs
  • Check if it could be more beneficial to wait to collect benefits. Waiting to collect Social Security benefits can be better because it can result in higher monthly payments. If you wait until your full retirement age or later, you’ll receive larger monthly payments, which can help you cover your expenses in retirement. Additionally, if you delay your benefits until age 70, your monthly payments will increase even more. This can be especially beneficial if you expect to live a long time in retirement and need a reliable source of income. However, the decision to wait ultimately depends on your individual circumstances and financial goals.

The 3.2% increase in Social Security benefits will be a welcome relief for many beneficiaries. However, it is important to remember that inflation is still high and that the increase in benefits will not fully keep up with the rising cost of living. Social Security recipients should review their budget and plan for retirement accordingly.

Check out our other blog to learn when is the best time to collect Social Security Benefits.
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Frequently Asked Questions About Social Security Benefits

  1. When can I start receiving Social Security benefits?

    • You can start receiving Social Security benefits as early as age 62, but your full retirement age (FRA) depends on your birth year. It typically ranges from 65 to 67. You can choose to delay benefits beyond your FRA, which may result in higher monthly payments.

  2. How is my Social Security benefit amount calculated?

    • Your benefit amount is calculated based on your highest-earning 35 years of work, adjusted for inflation. The Social Security Administration uses a formula to determine your average indexed monthly earnings (AIME), which is then used to calculate your primary insurance amount (PIA), the base for your monthly benefit.

  3. Can I work and still receive Social Security benefits?

    • Yes, you can work while receiving Social Security benefits, but if you are under your full retirement age, there is an earnings limit. If you earn more than this limit, a portion of your benefits may be withheld. After reaching your FRA, you can work and earn without any benefit reduction.

  4. What is the maximum Social Security benefit I can receive?

    • The maximum benefit varies depending on the year you retire, but in 2021, the maximum monthly benefit at full retirement age was $3,895. This amount can change with inflation and higher-earning individuals may receive a higher maximum benefit.

  5. Is it better to start collecting benefits early or wait until full retirement age?

    • The decision to collect benefits early or wait depends on your individual circumstances. Starting early means smaller monthly payments but more of them, while waiting until FRA or later results in larger monthly payments but fewer of them over your lifetime. The optimal choice varies for each person.

  6. How are Social Security benefits taxed?

    • Social Security benefits can be subject to federal income tax if your combined income (including half of your Social Security benefits, plus other income) exceeds a certain threshold. The percentage of benefits subject to tax depends on your income level.

  7. What happens to my benefits if I’m divorced or widowed?

    • If you are divorced, you may be eligible to receive benefits based on your ex-spouse’s record if you were married for at least ten years and meet certain conditions. If you are widowed, you may be eligible for survivor benefits, which can be based on your deceased spouse’s or ex-spouse’s earnings.

  8. Can I receive Social Security benefits from a spouse’s or ex-spouse’s work record?

    • Yes, if you meet certain criteria, you can receive benefits based on your spouse’s or ex-spouse’s earnings, including a spousal benefit or a divorced spousal benefit.

  9. What is the cost of living adjustment (COLA), and how does it affect my benefits?

    • COLA is an annual adjustment to Social Security benefits to account for inflation. It helps ensure that your benefits retain their purchasing power, and it typically results in a modest increase in your monthly payments.

  10. How do I apply for Social Security benefits, and what documentation do I need?

    • You can apply for Social Security benefits online, by phone, or in person at a Social Security office. You will need documents such as your Social Security card, birth certificate, and information on your work history, earnings, and banking information for direct deposit.

Last Updated: August 15th, 2024

How to Lower Your Medicare Costs During Annual Enrollment for 2024

Medicare annual enrollment for 2024 is just around the corner, and there are some potential changes to be aware of. Whether you’re already on Medicare or about to enroll for the first time, it’s crucial to understand how these changes could impact your healthcare costs and coverage. In this blog post, we’ll break down three big Medicare changes you may see in 2024 and provide practical tips on how to lower your Medicare costs during open enrollment.

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Annual Enrollment Period (AEP):

  1. Dates: The Annual Enrollment Period, often called the Medicare Annual Election Period, occurs annually from October 15th to December 7th. This is the time when most Medicare beneficiaries can make changes to their Medicare coverage for the upcoming year.

  2. Changes Allowed: During AEP, you can make a range of changes to your Medicare coverage, including:

    • Switch from Original Medicare (Part A and Part B) to a Medicare Advantage plan (Part C).
    • Switch from a Medicare Advantage plan back to Original Medicare.
    • Change from one Medicare Advantage plan to another.
    • Enroll in or switch Medicare Part D prescription drug plans.

Coverage Effective Date: Changes made during AEP take effect on January 1st of the following year. It is crucial to make decisions and submit any necessary paperwork during this period to ensure your coverage is in place when the new year begins.

Three Big Medicare Changes for 2024

 1. The End to Some Out-of-Pocket Costs for Catastrophic Prescription Costs

One of the most significant changes expected in 2024 is the reduction of out-of-pocket costs for catastrophic prescription expenses. If your Part D out-of-pocket spending for prescriptions exceeds $8,000, you won’t have to pay copayments or co-insurance. This is a significant improvement from the 5% co-insurance you had to pay after reaching $7,400 in 2023.

Tip: If you have high prescription drug costs in 2023, consider comparing Part D plans for your medications in 2024 to take advantage of this change.

2. Bigger Savings for Low- and Moderate-Income Individuals

Expected in 2024, individuals who qualify for Medicare’s Extra Help subsidies will pay $0 for Part D premiums and deductibles. This change also includes reduced costs for generic and brand-name drugs. To be eligible for Extra Help, your 2023 income must be below $21,870 (or $29,580 for couples), with limited resources not exceeding $16,660 (or $33,240 for married couples), excluding your primary residence, vehicles, and personal possessions.

Tip: If you meet these income and resource thresholds, be sure to sign up for Extra Help when enrolling in a Part D plan.

 3.Improved Mental Health Care Coverage: 

Medicare will now cover mental health services provided by marriage and family therapists, as well as mental health counselors. However, it’s essential to ensure that these professionals accept Medicare for you to benefit from this coverage.

Tip: Consider Medicare Advantage plans with networks that include your mental health professionals you need for your care.

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Medicare Tips

  • Review the Annual Notice of Change: Medicare Part D and Medicare Advantage plans will announce their rules and costs for 2024.  You’ll receive an Annual Notice of Change and Evidence of Benefits in late September if you’re already enrolled in one of these plans.
  • Pay attention to changes in premiums, co-insurance, copayments, and prescription coverage.
  • If you’re enrolling in a Part D or Medicare Advantage plan for the first time in 2024 or considering switching plans, comparison shopping is crucial.
  • You can compare plans online through Medicare’s Plan Finder tool, call Medicare at 800-MEDICARE, Consider meeting with a Medicare agent or broker, but make sure they represent all available plans in your area.

As a Medicare beneficiary, it’s a good idea to review your plan annually to stay current on any changes and ensure that you have the most suitable coverage for your healthcare needs. By doing so, you can avoid paying for services you don’t need and take advantage of any new benefits. Reviewing your plan and making any necessary adjustments is crucial to guaranteeing the best possible coverage for you. 

  1. Changing Healthcare Needs: Your health can change from year to year. New medical conditions may arise, and your existing conditions may require different treatments or medications. By reviewing your coverage annually, you can ensure that your plan still meets your healthcare needs.

  2. Coverage Changes: Medicare Advantage and Part D prescription drug plans can change their benefits, premiums, copayments, and formularies (the list of covered drugs) each year. What was covered one year may not be covered the next, or the cost-sharing for your medications may change. Reviewing your plan helps you stay informed about these changes.

  3. Network Changes: Medicare Advantage plans often have provider networks. Doctors and hospitals can join or leave these networks, which can affect your access to healthcare providers. It’s crucial to check if your preferred healthcare providers are still in-network.

  4. Financial Considerations: Your financial situation may change from year to year. You might have different income levels, which can affect your eligibility for programs like Extra Help or Medicare Savings Programs. Additionally, you may find more cost-effective plans that better suit your budget.

  5. Plan Performance: Medicare releases annual star ratings for Medicare Advantage and Part D plans, which evaluate plan quality based on various factors. Reviewing these ratings can help you choose a plan with a good track record of providing quality care and services.

  6. New Plan Options: Medicare plans evolve, and new plans become available. By reviewing your coverage, you can explore new plan options that may offer better coverage, lower costs, or additional benefits that align with your needs.

  7. Avoiding Penalties: If you miss certain enrollment periods or don’t sign up for specific types of coverage when you’re first eligible, you may face penalties or delayed coverage. Regularly reviewing your Medicare coverage helps you stay aware of these deadlines.

  8. Preventing Surprise Expenses: Without reviewing your coverage, you may inadvertently discover that a medical service or medication you need is no longer covered or is subject to high out-of-pocket costs. This can lead to unexpected medical expenses.

  9. Maximizing Benefits: Medicare offers various preventive services and wellness benefits. By reviewing your coverage, you can take advantage of these services, such as annual wellness visits, vaccinations, and screenings, to maintain your health proactively.

Last Updated: August 15th, 2024

AEP vs. OEP: Understanding the Differences for Medicare

Medicare is a federal health insurance program for people aged 65 or older and some younger individuals with specific disabilities. Two important enrollment periods are the Annual Enrollment Period (AEP) and the Open Enrollment Period (OEP). In this blog, we’ll explore their key differences to help you make informed decisions about your coverage.

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Annual Enrollment Period (AEP):

  1. Dates: The Annual Enrollment Period, often called the Medicare Annual Election Period, occurs annually from October 15th to December 7th. This is the time when most Medicare beneficiaries can make changes to their Medicare coverage for the upcoming year.

  2. Changes Allowed: During AEP, you can make a range of changes to your Medicare coverage, including:

    • Switch from Original Medicare (Part A and Part B) to a Medicare Advantage plan (Part C).
    • Switch from a Medicare Advantage plan back to Original Medicare.
    • Change from one Medicare Advantage plan to another.
    • Enroll in or switch Medicare Part D prescription drug plans.

  3. Coverage Effective Date: Changes made during AEP take effect on January 1st of the following year. It is crucial to make decisions and submit any necessary paperwork during this period to ensure your coverage is in place when the new year begins.

  4. In 2024, individuals can contribute to an HSA if they have not yet enrolled in Medicare and have an HSA-eligible health insurance policy with a deductible of at least $1,600 for individual coverage or $3,200 for family coverage. This eligibility remains the same regardless of whether they obtain their insurance through an employer or independently.   

    For 2024, the maximum contribution limits are set at $4,150 for individual coverage and $8,300 for family coverage. Additionally, those aged 55 or older can make an extra catch-up contribution of up to $1,000 to boost their HSA savings.  

Open Enrollment Period (OEP):

  1. Dates: The Medicare Open Enrollment Period occurs annually from January 1st to March 31st. It allows beneficiaries who are already enrolled in a Medicare Advantage plan to make certain changes to their coverage.

  2. Changes Allowed: During OEP, beneficiaries can:
    • Switch from one Medicare Advantage plan to another.
    • Return to Original Medicare and add a standalone Medicare Part D prescription drug plan.
  3. Coverage Effective Date: Changes made during OEP generally take effect on the first day of the month following the month you make the change. For example, if you make a change in February, your new coverage will typically start on March 1st.

Key Differences:

Now that we’ve outlined the basics of both AEP and OEP let’s delve into the primary differences between these two Medicare enrollment periods:

    1. Scope of Changes: AEP offers more flexibility, allowing beneficiaries to make a broader range of changes, including switching between Original Medicare and Medicare Advantage. OEP is more focused, primarily enabling changes within the Medicare Advantage landscape.

    2. Timing: AEP occurs in the fall, while OEP occurs in the early months of the year. This timing is crucial for planning as changes made during AEP become effective on January 1st, whereas OEP changes typically take effect later.

    3. Eligibility: All Medicare beneficiaries can participate in AEP, whereas OEP is specifically for individuals already enrolled in a Medicare Advantage plan. If you have Original Medicare with a standalone Part D plan, AEP is more relevant to you.

    4. Frequency: AEP happens yearly like clockwork, providing an annual opportunity to reevaluate your Medicare coverage. OEP is less known and utilized, as it only applies to a subset of beneficiaries. 

Considering making any changes to your coverage?

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AEP vs. OEP: Understanding the Differences for Medicare

Watch the video to learn about Medicare’s enrollment periods.

Watch the video to learn about Medicare’s enrollment periods.

Review your Medicare Plan at least once a year.

As a Medicare beneficiary, it’s a good idea to review your plan annually to stay current on any changes and ensure that you have the most suitable coverage for your healthcare needs. By doing so, you can avoid paying for services you don’t need and take advantage of any new benefits. Reviewing your plan and making any necessary adjustments is crucial to guaranteeing the best possible coverage for you.
 

  1. Changing Healthcare Needs: Your health can change from year to year. New medical conditions may arise, and your existing conditions may require different treatments or medications. By reviewing your coverage annually, you can ensure that your plan still meets your healthcare needs.

  2. Coverage Changes: Medicare Advantage and Part D prescription drug plans can change their benefits, premiums, copayments, and formularies (the list of covered drugs) each year. What was covered one year may not be covered the next, or the cost-sharing for your medications may change. Reviewing your plan helps you stay informed about these changes.

  3. Network Changes: Medicare Advantage plans often have provider networks. Doctors and hospitals can join or leave these networks, which can affect your access to healthcare providers. It’s crucial to check if your preferred healthcare providers are still in-network.

  4. Financial Considerations: Your financial situation may change from year to year. You might have different income levels, which can affect your eligibility for programs like Extra Help or Medicare Savings Programs. Additionally, you may find more cost-effective plans that better suit your budget.

  5. Plan Performance: Medicare releases annual star ratings for Medicare Advantage and Part D plans, which evaluate plan quality based on various factors. Reviewing these ratings can help you choose a plan with a good track record of providing quality care and services.

  6. New Plan Options: Medicare plans evolve, and new plans become available. By reviewing your coverage, you can explore new plan options that may offer better coverage, lower costs, or additional benefits that align with your needs.

  7. Avoiding Penalties: If you miss certain enrollment periods or don’t sign up for specific types of coverage when you’re first eligible, you may face penalties or delayed coverage. Regularly reviewing your Medicare coverage helps you stay aware of these deadlines.

  8. Preventing Surprise Expenses: Without reviewing your coverage, you may inadvertently discover that a medical service or medication you need is no longer covered or is subject to high out-of-pocket costs. This can lead to unexpected medical expenses.

  9. Maximizing Benefits: Medicare offers various preventive services and wellness benefits. By reviewing your coverage, you can take advantage of these services, such as annual wellness visits, vaccinations, and screenings, to maintain your health proactively.

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Frequently Asked Questions About AEP & OEP


Annual Enrollment Period (AEP) 

  1. What is the Annual Enrollment Period (AEP)?

    • AEP is the annual period from October 15th to December 7th, when Medicare beneficiaries can make changes to their Medicare coverage for the following year.

  2. What changes can I make during AEP?

    • During AEP, you can switch from Original Medicare to Medicare Advantage, change from one Medicare Advantage plan to another, return to Original Medicare, or enroll in or switch Medicare Part D prescription drug plans.

  3. When do changes made during AEP take effect?

    • Changes made during AEP become effective on January 1st of the following year.

  4. Can I enroll in Medicare for the first time during AEP?

    • AEP is primarily for beneficiaries who are already enrolled in Medicare. If you’re new to Medicare, you generally have an Initial Enrollment Period (IEP) based on your 65th birthday.

Open Enrollment Period (OEP) 

  1. What is the Open Enrollment Period (OEP)?

    • OEP takes place annually from January 1st to March 31st and allows Medicare beneficiaries already enrolled in a Medicare Advantage plan to make certain changes to their coverage.

  2. What changes can I make during OEP?

    • During OEP, you can switch from one Medicare Advantage plan to another or return to Original Medicare and add a standalone Medicare Part D prescription drug plan.

  3. When do changes made during OEP take effect?

    • Changes made during OEP generally take effect on the first day of the month following the month you make the change. For example, changes made in February typically take effect on March 1st.

  4. Can I switch from Original Medicare to a Medicare Advantage plan during OEP?

    • No, you generally cannot switch from Original Medicare to a Medicare Advantage plan during OEP. AEP is the appropriate period for such changes.

General 

  1. Can I make changes to my Medicare coverage outside of AEP and OEP?

    • Yes, Special Enrollment Periods (SEPs) allow for changes in certain circumstances, such as moving to a new area, losing other coverage, or qualifying for Medicaid.

  2. What happens if I miss the AEP or OEP deadlines?

    • Missing these enrollment periods may limit your options for changing your Medicare coverage. You might have to wait until the next AEP or OEP, or you may qualify for a Special Enrollment Period (SEP).

  3. Should I review my Medicare coverage every year, even if I’m satisfied with it?

    • Yes, it’s a good practice to review your coverage annually. Your healthcare needs may change, and insurance plans can also change their benefits and costs yearly.

  4. Where can I get help or information about Medicare enrollment periods?

    • You can contact Medicare directly, work with a licensed insurance agent specializing in Medicare, or visit the official Medicare website (medicare.gov) for information and resources.

Potential Changes to Medicare Part B and D for 2024:

As we enter a new year, it’s essential to stay informed about changes that might affect your healthcare coverage. In 2024, there are some notable updates to Medicare Part B and D that you should be aware of. These changes could impact your costs, coverage, and overall healthcare experience. Let’s delve into the key modifications for Medicare Part B and D in 2024.

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 Let’s take a closer look at the potential Medicare Part B and D changes in the coming year.

Medicare Part B Expectations

  1. Standard Premium Adjustment: The standard monthly premium for Medicare Part B may experience a slight adjustment in 2024. The exact premium amount will be announced by the Centers for Medicare & Medicaid Services (CMS) in the months leading up to the new year. It’s crucial to keep an eye on these updates to plan your budget accordingly.

  2. Expected Premium Increase: The standard monthly Part B premium for most Medicare beneficiaries is expected to increase by $10 to $174.80 in 2024. This is based on the latest estimates from CMS. It’s important to note this change and its potential impact on your monthly expenses.

  3. Income-Related Monthly Adjustment Amount (IRMAA): Individuals with higher incomes may experience an IRMAA surcharge on their Part B premiums. The income thresholds determining these surcharges can change each year, affecting the amount you pay. Be sure to review the new income brackets to understand any potential changes in your premium costs.

  4. Deductibles and Coinsurance: The Part B deductible, which covers your out-of-pocket expenses before Medicare coverage kicks in, could experience adjustments. Similarly, the coinsurance you’re responsible for after reaching the deductible might also change. Familiarize yourself with these amounts to anticipate your healthcare costs accurately. The Part B deductible is expected to increase to $233 in 2024. 

Medicare Part D Expectations

  1. Standard Benefit Design Changes: Medicare Part D prescription drug plans have a standard benefit design that outlines how costs are shared between you and the plan. In 2024, there might be modifications to this design, such as changes in copayments, coinsurance percentages, and coverage gaps. Review your plan’s upcoming 2024 Summary of Benefits to understand how your drug costs might be affected.

  2. Average Monthly Premium Decrease: The average monthly premium for Medicare Part D prescription drug coverage is expected to fall slightly in 2024, to $55.50, a 99-cent drop from the 2023 average of $56.49. This decrease is due to factors including the premium stabilization provision from the American Rescue Plan Act of 2021.

  3. Cap on Out-of-Pocket Drug Spending: In 2025, the out-of-pocket cost for brand-name drugs will be capped at $2,000. This is excellent news for beneficiaries, as it means you won’t have to pay more than this amount for your brand-name prescription drugs in a year.

  4. Spreading Out the Cost of Prescription Drugs: Starting in 2025, Medicare beneficiaries will be able to spread out the cost of their prescription drugs over the year. This change is beneficial, as it prevents the need to pay the full cost upfront. If you only take brand-name drugs, the cap on your annual spending is set at $2,000.

  5. Formulary Changes: Part D plans often update their formularies, the list of covered prescription drugs. Review these changes to ensure your necessary medications are still covered and explore alternatives if needed.

  6. Premiums and Deductibles: Part D plans have varying premiums and deductibles that can change annually. These changes can impact your overall prescription drug costs. Compare different Part D plans during the Open Enrollment period to find the one that aligns with your medication needs and budget.

  7. Catastrophic Phase Changes: In the catastrophic phase, Part D plans will pay 20% of total drug costs instead of 15%. The 5% coinsurance requirement for Part D enrollees will also be eliminated. This means that Medicare beneficiaries will pay less in the catastrophic phase.

Other Potential Medicare Changes

  1. Low-Income Subsidy (LIS) Expansion: The eligibility for the full low-income subsidy (LIS) will be expanded to individuals with incomes up to 150% of the federal poverty level. This means that more people will be eligible for financial assistance to help pay for their Part D premiums and out-of-pocket costs.

  2. Insulin Cost: The out-of-pocket cost of insulin products will remain capped at $35 per month in all Part D plans.

  3. Vaccine Coverage: Adult vaccines covered under Part D, such as the shingles vaccine, will continue to be covered with no cost sharing.

Staying informed about changes to Medicare Part B and D in 2024 is crucial for effectively managing your healthcare costs and coverage. As part of our commitment to providing ongoing professional service, Policy Engineer, is dedicated to helping you navigate these changes. Our licensed Policy Engineers are available to assist you in understanding how these updates might affect your insurance needs. Remember that even with these changes, our focus remains on giving you access to the best insurance rates and providing you with the support you need to make informed healthcare decisions.

 

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Medicare Advantage Plan Changes

  1. Projected Changes: The number of Medicare Advantage plans available is projected to decrease in 2024. Premiums for Medicare Advantage plans are projected to increase, while benefits are expected to remain largely the same. Some plans may offer new or enhanced benefits to attract enrollees.

  2. Growth of MA Program: The Medicare Advantage program will continue to grow, offering private health insurance plans that provide Medicare benefits. Enrollment in MA plans is expected to increase in 2024.

  3. Specialized MA Plans: Medicare Advantage Special Needs Plans provide specialized care and support for people with certain chronic conditions, such as diabetes or heart disease.

  4. Cost-Sharing Reduction Plans: Cost-sharing reduction plans are available to people with incomes below a certain level, offering lower out-of-pocket costs for prescription drugs and other services.

  5. Medicare Advantage Direct Contracting Plans: These new plans will allow Medicare beneficiaries to receive their care from a team of doctors and other healthcare providers who are contracted with the plan. The plans will be paid a fixed amount per enrollee, and they will be responsible for providing all of the enrollee’s care, including prescription drugs.

  6. Medicare Advantage Special Needs Plans: These plans are designed for people with certain chronic conditions, such as diabetes or heart disease. The plans offer specialized care and support to help these beneficiaries manage their conditions.

Last Updated: August 15th, 2024

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Last Updated: August 15th, 2024

Veterans, Learn how Medicare, VA Benefits, and TRICARE for Life work together. 

Our goal is to assist Veterans in understanding Medicare, VA benefits, and TRICARE for Life. These systems can be complex to navigate, particularly when obtaining complete coverage and cost savings. We have created this guide to provide you with peace of mind and assist you in making informed healthcare decisions. We are here to support you throughout the process.

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VETERAN Benefits

As Veterans and military retirees approach age 65, they often face questions about how their VA benefits and TRICARE coverage align with Medicare. This guide sheds light on the key considerations and options available to Veterans during this crucial phase of their healthcare journey.

Scroll down to take a look at the frequently asked questions! Visit VA.gov for more detailed information on VA Benefits and to stay updated with any changes to the VA benefits. 

Who is eligible for Medicare, VA benefits, and TRICARE for Life?

The eligibility requirements for Medicare, VA benefits, and TRICARE for Life vary. Here is a general overview of the eligibility requirements for each program:

  • Medicare: To be eligible for Medicare, you must be 65 years old or older or have a certain number of work credits.
    • You can also be eligible for Medicare if you have a disability that qualifies you for Social Security Disability Insurance (SSDI).
  • VA Benefits: To be eligible for VA benefits, you must have served in the military during a period of war or have a service-connected disability.
  • TRICARE for Life: To be eligible for TRICARE for Life, you must be eligible for Medicare and also be enrolled in TRICARE.

What are the different options available to Veterans?

There are a variety of options available to Veterans when it comes to healthcare benefits. The best choice for you will depend on your individual needs and circumstances. Here are some of the most common options:

  • Dual Eligible: This is a term used to describe Veterans who are eligible for both Medicare and VA benefits. Dual-eligible Veterans can access a wide range of healthcare services, including doctor visits, hospital stays, and prescription drugs.
  • TRICARE for Life: This program provides supplemental coverage to Medicare beneficiaries who are also eligible for TRICARE. It covers costs that Medicare doesn’t, such as copays, deductibles, and non-covered services.
  • VA Choice: This program allows Veterans to see non-VA doctors and hospitals for certain services. The VA will pay for the services up to a certain amount.
  • VA Community Care Program: Provides health care for Veterans from providers in your local community outside of VA. Veterans may be eligible to receive care from a community provider when the VA cannot provide the care needed. This care is provided on behalf of and paid for by VA.

How do these programs work together?

Medicare, VA benefits, and TRICARE for Life can work together to provide comprehensive healthcare coverage for Veterans. For example, a Veteran who is dual eligible could use Medicare for doctor visits and hospital stays, VA benefits for prescription drugs, and TRICARE for Life for copays and deductibles.

How can I choose the right combination of benefits for me?

The best way to choose the right combination of benefits for you is to speak with a healthcare advisor who specializes in Veterans’ benefits. They can help you understand your options and choose the plan that best meets your needs.

Here are some factors to consider when choosing a combination of benefits:

  • Your health needs: What types of care do you need most?
  • Your budget: How much can you afford to pay for healthcare each month?
  • Your preferences: Do you prefer to see VA doctors or non-VA doctors?

VA Benefits, Medicare & TRICARE

Understanding  Medicare, VA benefits, and TRICARE for Life can be complex. Still, it is important for Veterans to understand their options so they can choose the right combination of coverage for their needs. By speaking with a healthcare advisor who specializes in Veterans’ benefits, Veterans can get the help they need to make informed decisions about their healthcare.

  • The importance of choosing the right combination of benefits: there are a variety of benefits available to Veterans, and the best combination for you will depend on your individual needs and circumstances. It’s important to speak with a healthcare advisor who specializes in Veterans’ benefits to help you understand your options and choose the plan that best meets your needs.
  • The cost of healthcare: Healthcare costs can be a significant financial burden for Veterans, especially those with chronic health conditions. It’s important to factor in the cost of healthcare when choosing a combination of benefits. Some plans may have lower premiums, but they may also have higher out-of-pocket costs. Finding a plan that fits your budget and healthcare needs is important.
  • The availability of care: It’s also important to consider the availability of care when choosing a combination of benefits. Some plans may have a wider network of providers than others. If you live in a rural area, you may want to choose a plan with a wider network to have more care options.
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Frequently Asked Questions

1. Do Veterans need to enroll in Medicare if they have VA benefits? Enrolling in Medicare at age 65 is not mandatory for Veterans with VA benefits. However, opting out may result in a lack of coverage for services received outside the VA health system. If a Veteran chooses not to enroll in Medicare, they may be responsible for paying the full cost of any healthcare services they receive outside of the VA health system. This could be a significant financial burden, especially for Veterans with chronic health conditions.

2. Can Veterans have both VA benefits and Medicare? Veterans with VA health benefits can be enrolled in both VA benefits and Medicare. This dual enrollment offers more care options and financial security.

3. How does the coordination between VA benefits and Medicare work? VA benefits and Medicare are separate systems. VA care is received from VA doctors or facilities, while Medicare care is provided by Medicare-authorized facilities.

4. What happens if a Veteran doesn’t enroll in Medicare during their Initial Enrollment Period? Suppose a Veteran delays Medicare enrollment and lacks employer-sponsored coverage. In that case, they may have to wait until the General Enrollment Period (January 1 to March 31 each year) to enroll, potentially facing financial penalties.

5. Can Veterans access prescription drugs with both VA benefits and Medicare? VA benefits include prescription drug coverage. However, Veterans with Medicare Part D can access prescriptions from non-VA doctors and local pharmacies. It may not be as comprehensive as Medicare Part D coverage. Veterans with Medicare Part D may access a wider range of prescription drugs and pay lower copays.

6. How does TRICARE for Life work with Medicare? TRICARE for Life acts as supplemental coverage to Medicare. It reduces out-of-pocket costs and covers services not included in Medicare, such as healthcare outside the U.S.

7. What happens to TRICARE coverage when Veterans become eligible for Medicare? Traditional TRICARE coverage ends, and Veterans transition to TRICARE for Life upon Medicare eligibility. When Veterans become eligible for Medicare, they must either enroll in traditional TRICARE or TRICARE for Life. Traditional TRICARE is more expensive than TRICARE for Life, so most Veterans choose to transition to TRICARE for Life.

8. Is enrollment in Medicare Part B necessary for TRICARE for Life?Yes, maintaining TRICARE for Life coverage requires enrollment in Medicare Part B. This applies even if Veterans are still working.  This is because TRICARE for Life is a supplemental program that only covers costs not covered by Medicare Part A and Part B.

9. Do Veterans have to pay for Medicare Part A? Medicare Part A is cost-free for most beneficiaries who have paid Social Security taxes for at least 10 years. Veterans who have not paid enough quarters may have to pay a monthly premium. However, Part B comes with a monthly premium.

10. Can TRICARE for Life beneficiaries skip enrolling in Medicare Part D?  Yes, TRICARE for Life beneficiaries can skip enrolling in Medicare Part D, as they are covered under the TRICARE Pharmacy Program. However, some Veterans may choose to enroll in Medicare Part D for additional coverage or to have access to a wider range of prescription drugs.

11. Is a Medicare supplement necessary with TRICARE for Life? No, TRICARE for Life serves as a Medicare supplement, eliminating the need for a separate Medigap policy. Medigap policies are private insurance plans that can help cover the Medicare coverage gaps. 

12. How do VA benefits, TRICARE for Life, and Medicare interact when seeking medical care? VA benefits and Medicare operate independently. Care received must adhere to the specific system’s guidelines, with the potential for overlap in certain cases. VA benefits, TRICARE for Life, and Medicare operate independently. This means that veterans must be aware of the specific rules and regulations for each program when seeking medical care. For example, Veterans may need to get prior authorization from the VA before they can see a non-VA doctor or hospital under the TRICARE for Life program.

13. Why might Veterans consider enrolling in both VA benefits and Medicare? Enrolling in both offers comprehensive coverage, broader care choices, and financial stability, especially in uncertain future funding scenarios. Veterans may consider enrolling in both VA benefits and Medicare for a variety of reasons, including:

  • To have comprehensive coverage for both in- and out-of-VA care
  • To have broader care choices, including the ability to see non-VA doctors and hospitals
  • To have financial stability, as Medicare can help to offset the cost of out-of-pocket expenses

14. Can Veterans access non-VA healthcare facilities with TRICARE for Life? TRICARE for Life beneficiaries can access participating and non-participating Medicare providers, expanding their care options. This gives Veterans more flexibility when choosing a healthcare provider.

15. How do Veterans avoid coverage gaps when transitioning to TRICARE for Life? Enrolling in Medicare Parts A and B before turning 65 is essential to ensure a seamless transition to TRICARE for Life coverage. Veterans can avoid coverage gaps when transitioning to TRICARE for Life by enrolling in Medicare Parts A and B before turning 65. This will ensure that they have continuous coverage when they become eligible for TRICARE for Life.

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