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Medigap vs. Medicare Advantage: What to Know in 2026

When you become eligible for Medicare, an important step is deciding how you want to manage out-of-pocket costs that are not fully covered by Original Medicare (Parts A & B). In 2026, the two main pathways people evaluate are:

  • Medigap (Medicare Supplement Insurance) – works with Original Medicare.
  • Medicare Advantage (Part C) – an alternative way to receive Medicare benefits through a private plan.

Both options function differently, and both come with unique structures and considerations. This guide explains the differences in a neutral, educational format.

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A 2026 Educational Overview Provided by Policy Engineer Insurance Solutions
For informational and educational purposes only. This material is not intended to influence your enrollment decisions. Individuals should review all options available in their area through Medicare.gov or consult a licensed insurance professional for personalized guidance.

Understanding Your Choices in 2026

When you become eligible for Medicare, an important step is deciding how you want to manage out-of-pocket costs that are not fully covered by Original Medicare (Parts A & B). In 2026, the two main pathways people evaluate are:

  • Medigap (Medicare Supplement Insurance) – works with Original Medicare.
  • Medicare Advantage (Part C) – an alternative way to receive Medicare benefits through a private plan.

Both options function differently, and both come with unique structures and considerations. This guide explains the differences in a neutral, educational format.

Review Your Medicare Plan

What Are Medigap and Medicare Advantage?

Medigap (Medicare Supplement Insurance)

  • Medigap policies are offered by private insurance companies and help pay certain out-of-pocket costs under Original Medicare, such as coinsurance, copayments, and deductibles.
  • In most states, Medigap plans are standardized by letter (A, B, C … N). A plan with the same letter offers the same core benefits regardless of the insurer.
  • Medigap does not include prescription drug coverage, so individuals generally need a separate Part D plan if they want drug coverage.

Medicare Advantage (Part C)

  • Medicare Advantage plans are offered by Medicare-approved private companies. These plans provide Medicare Part A and Part B benefits through a bundled plan.
  • Many plans also include Part D prescription drug coverage and may offer additional benefits such as dental, vision, or hearing services.
  • Medicare Advantage plans include an annual maximum out-of-pocket limit (MOOP) for Medicare-covered services.
  • These plans typically use provider networks, which may affect access to certain doctors and hospitals depending on the plan type.
  •  

  • Key Differences Between Medigap and Medicare Advantage in 2026

    1. Cost Structure

    Medigap

    • Requires a monthly premium.
    • Offers more predictable out-of-pocket costs when receiving Medicare-covered care.
    • Depending on the selected plan, Medigap may cover certain Medicare deductibles, coinsurance, or copayments.

    Medicare Advantage

    • Monthly premiums vary by plan.
    • Individuals generally pay copayments or coinsurance when receiving services.
    • Plans include an annual out-of-pocket maximum for Medicare-covered services under Part A and Part B.

    2. Provider Access

    Medigap

    • Allows access to any doctor or specialist in the United States who accepts Medicare.
    • No networks or referrals are required.

    Medicare Advantage

    • Most plans have networks such as HMOs or PPOs.
    • Out-of-network coverage depends on the plan and may result in different costs or limitations.

    3. Predictability vs. Variability of Costs

    Medigap

    • Provides stable, predictable cost-sharing, which may be helpful for individuals who expect frequent medical use.

    Medicare Advantage

    • Costs can vary depending on how often services are used.
    • Once the plan’s out-of-pocket maximum is reached, Medicare-covered services are generally covered by the plan for the remainder of the year.

    4. Prescription Drug Coverage

    Medigap

    • Does not include prescription drug coverage.
    • A separate Part D plan is typically needed for medications.

    Medicare Advantage

    • Many plans include Part D prescription drug coverage within the plan.

    5. Stability and Yearly Changes

    Medigap

    • Benefits are standardized and typically do not change from year to year.
    • Premiums may adjust over time.

    Medicare Advantage

    • Plan benefits, drug formularies, network structures, and cost-sharing may change annually.
    • Members receive an Annual Notice of Change (ANOC) each fall that outlines upcoming changes.

    6. Enrollment and Underwriting Rules

    Medigap

    • When you enroll in Medicare Part B for the first time, you receive a six-month Medigap Open Enrollment Period where you have guaranteed-issue rights.
    • During this period, you cannot be denied a Medigap plan based on health status.
    • Outside of this window, applying for certain Medigap plans may require medical underwriting in many states.

    Switching From Medicare Advantage to Medigap

    • Switching may require underwriting unless you qualify for a specific guaranteed-issue situation, such as certain trial rights or special circumstances.

Questions to Consider When Comparing Options

To help understand which structure may align with your preferences, consider:

  • How often do I visit doctors or specialists?
  • Do I prefer unrestricted provider access, or am I comfortable with a network?
  • How important is predictable monthly spending?
  • Do I want prescription drug coverage included in the same plan?
  • What is my budget for monthly premiums?
  • Could my healthcare needs change in the future?
Questions?

Tips for Reviewing Options in 2026

  • Review your Medicare Advantage plan’s Annual Notice of Change (ANOC) each fall if you are already enrolled.
  • Compare Medigap, Medicare Advantage, and Part D plans using the Medicare Plan Finder at Medicare.gov.
  • Reach out to your State Health Insurance Assistance Program (SHIP) for free and unbiased Medicare guidance.
  • If considering Medigap outside the guaranteed-issue window, review underwriting rules in your state.
  • If selecting Medigap, review Part D drug plan options separately.
  • Estimate your potential annual costs under both structures—consider typical use and potential high-use years.
Review Your Strategy

Educational Disclaimer

This article is intended for education only and should not be used to determine enrollment, plan selection, or plan comparison.
Medicare Advantage and Part D plans vary by county and service area. Individuals should verify plan details through Medicare.gov, the plan’s official documents, and licensed professionals when making Medicare decisions.

 
 
 
 

Understanding Medicare PPO Plans in 2026: A Comprehensive Guide

Navigating Medicare can feel overwhelming — especially when you’re faced with multiple plan types and ever-changing policies. One option that continues to resonate with many beneficiaries is the Medicare Advantage PPO (Preferred Provider Organization) plan. In 2026, there are significant trends, changes, and trade-offs worth understanding. This guide breaks it all down.

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A Purely Educational Overview of Key 2026 Changes Published by Policy Engineer Insurance Solutions — For Informational Purposes Only  At Policy Engineer Insurance Solutions, our goal is to help you understand these changes from an educational standpoint so you can plan with clarity.

1. What Is a Medicare PPO Plan?

  • Medicare Advantage (Part C): PPO plans are a type of Medicare Advantage plan. These are private insurer-run plans that bundle Medicare Part A (hospital) and Part B (medical), and often Part D (prescription drugs).

  • Flexibility: Unlike HMO (Health Maintenance Organization) plans, PPOs typically allow you to see both in-network and out-of-network providers. You don’t always need referrals to see a specialist. This gives more freedom, but it may come at a higher cost when using out-of-network providers.

  • Cost Structure: Costs may include monthly premiums, co-pays, or coinsurance for services, and in some cases, out-of-pocket maximums. The exact terms vary by plan.

Review Your Medicare Plan

2. What’s Changing for Medicare PPOs in 2026?

There are several key shifts in the Medicare Advantage (MA) market relevant to PPO plans in 2026. These influence cost, availability, and program design.

a) Overall Stability with Some Premium Declines
CMS projects that average Medicare Advantage premiums will decrease slightly in 2026.

  • The projected average monthly premium for MA across all types (including PPOs) is estimated to drop from $16.40 in 2025 to $14.00 in 2026.

  • This suggests that, for many beneficiaries, Medicare Advantage remains a cost-competitive alternative.

b) Policy & Technical Updates
New rulemaking and policy adjustments are being implemented for 2026:

  • CMS’s 2026 final rule for Medicare Advantage includes updates related to Part D, Star Ratings, and how supplemental benefits are structured.

  • These changes may affect coverage, network design, and out-of-pocket responsibilities.

c) PPO Plan Reductions
The Medicare Advantage landscape is evolving:

  • According to industry analysis, PPO offerings are shrinking, with more PPO plans being phased out compared to HMOs. 

  • Specifically, many of the discontinued PPOs are “$0-premium” PPO MA-PD plans, reducing options for beneficiaries seeking low-premium PPOs.

  • Insurers may be cutting these PPOs due to cost risk: Wide provider networks make it harder to control expenses compared to tighter HMO networks. 

d) Quality Ratings Still Matter

  • CMS assigns Star Ratings to Medicare Advantage plans based on quality measures (e.g., access to care, patient satisfaction, management of chronic conditions). (CMS)

  • These ratings affect both beneficiary decision-making and how much insurers are paid. In 2026, these quality ratings continue to play a significant role.

e) Cost-Sharing Adjustments for Dual-Eligible PPOs

  • Proposed changes include limits on out-of-network cost sharing for PPOs designed for dual-eligible individuals (those eligible for both Medicare and Medicaid). (CMS)

  • These adjustments aim to make PPOs safer and more predictable for vulnerable populations.

f) Plan Exit Risk

  • Some major insurers are pulling back on PPO offerings; for example, reports indicate that UnitedHealth will discontinue over 100 Medicare Advantage plans by 2026, including many PPOs. 

  • For beneficiaries, this means potential disruption: if your PPO is discontinued, you may need to choose a new plan or switch to another type. of plan

3. Pros and Cons of Choosing a PPO in 2026

Advantages:

  1. Provider Flexibility: Ability to see out-of-network doctors.

  2. No Referral Needed: In many PPO plans, you can see specialists without a referral.

  3. Predictable Upper Costs: Many PPOs have an annual maximum out-of-pocket limit, helping protect against very high costs.

  4. Suitable for Travelers: If you split time between places (e.g., “snowbirds”), a PPO’s flexibility can be beneficial.

Disadvantages:

  1. Fewer Options: With fewer PPO plans, your local choices may be more limited.

  2. Potential for Higher Costs: Using out-of-network providers generally results in higher costs.

  3. Financial Risk for Insurers: Because of this risk, some insurers are reducing or discontinuing PPOs, which may lead to less competition.

  4. Plan Complexity: Each PPO plan’s structure (premium, co-pays, out-of-pocket max, drug coverage) can vary widely, so it’s critical to compare carefully.

4. Real-World Examples: What Some PPOs Look Like in 2026

  • Johns Hopkins Advantage MD – 2026 PPO:

    • $95/month premium

    • No medical deductible

    • $5 PCP copay, $45 specialist copay

    • Telehealth is $0 copay in-network. Johns Hopkins Advantage MD

  • Johns Hopkins Advantage MD – 2026 “Plus” PPO:

    • $155/month premium

    • No medical deductible

    • $0 copay for primary care, $40 for specialists

    • Emergency copay: $110 (waived if hospitalized) Johns Hopkins Advantage MD

  • Blue Medicare Advantage Valor PPO:

    • Their 2026 Annual Notice of Change shows adjustments in various cost-sharing categories (e.g., skilled nursing facility copay differences, in- vs out-of-network) that beneficiaries must carefully review. digital-assets.wellmark

Questions?

5. Should You Choose a PPO Plan in 2026?

Here are some guiding questions to help you decide:

  1. Are your preferred doctors in-network?
    Even though PPOs allow out-of-network visits, staying in-network is usually cheaper.

  2. Do you travel or split time between locations?
    If you’re not always in one place, PPO flexibility may save you in the long run.

  3. How much care do you expect to use?
    If you see specialists often or need more complex care, PPOs might offer better access. But if most of your care is routine, a tighter HMO could be more cost-effective.

  4. What is your risk tolerance?
    Consider worst-case scenarios for out-of-pocket costs. Check the maximum out-of-pocket in your plan.

  5. Have you checked the plan’s 2026 changes?
    Look at each plan’s Annual Notice of Change (ANOC) for 2026. Insurer changes, cost-sharing, network updates, and benefit tweaks can significantly affect your year-to-year costs.

  6. How do the quality ratings look?
    Use CMS’s Star Ratings when comparing plans — higher-rated plans may provide better value or care.

 

Review Your Strategy

6. Tips for the 2026 Enrollment Period

  • Use Medicare Plan Finder: By October 1, 2025, the tool should reflect 2026 plan options. CMS

  • Review Notices: Carefully read the Annual Notice of Change from your plan(s).

  • Ask for Help: Call 1-800-MEDICARE or work with a licensed agent who understands Medicare Advantage.

  • Compare Total Cost, not just premium: Include premiums, copays, coinsurance, and the worst-case out-of-pocket.

  • Consider Long-Term Needs: If your health needs may change, consider whether network flexibility or a lower out-of-pocket risk is more important to you.

Understanding Medicare Parts A & B Changes for 2026

Medicare is not static; each year, the premiums, deductibles, and cost-sharing structures can change. In November 2025, the CMS released updated figures for 2026, so it’s crucial for beneficiaries to stay informed about these changes.
 

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What are Parts A and B?

What’s New for Medicare in 2026?

Why These Changes?

What This Means For Your

Steps To Take

Schedule Your Medicare Review

A Purely Educational Overview of Key 2026 Changes Published by Policy Engineer Insurance Solutions — For Informational Purposes Only  At Policy Engineer Insurance Solutions, our goal is to help you understand these changes from an educational standpoint so you can plan with clarity.

What are Parts A and B?

  • Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health services. 

  • Part B (Medical Insurance): Covers outpatient care, physician services, preventive services, durable medical equipment, and certain other services not covered under Part A

Review Your Medicare Plan

Key Changes for 2026

Part A: Premiums & Deductibles

  • The inpatient hospital deductible for 2026 will be $1,736, up from $1,676 in 2025—an increase of $60.

  • Hospital daily coinsurance amounts:

    • For days 61-90 of a hospitalization benefit period: $434/day (up from $419).

    • For lifetime reserve days: $868/day (up from $838).

  • Skilled nursing facility daily coinsurance for days 21-100: $217 (up from $209.50). CMS

  • Part A monthly premium for those who must pay (because they have fewer than the required quarters):

    • Reduced monthly premium (for those with at least 30 but fewer than 40 quarters): $311 in 2026 (up $26).

    • Full premium (fewer than 30 quarters): $565 in 2026 (up $47).

Part B: Premiums & Deductibles

  • Standard monthly premium for Part B: $202.90 for 2026, up from $185.00 in 2025 (an increase of $17.90).

  • Annual deductible for Part B: $283 in 2026, up from $257 in 2025 (increase of $26).

  • For individuals with kidney transplants who use immunosuppressive drugs and continue Part B coverage, the premium is $121.60.

Income-Related Monthly Adjustment Amounts (IRMAA)

  • Part B and Part D premiums can increase further for high-income beneficiaries based on their modified adjusted gross income (MAGI). CMS

  • For example, for full Part B coverage in 2026:

    • Individuals with MAGI ≤ $109,000 (or joint ≤ $218,000): pay standard premium ($202.90).

    • Individuals with MAGI > $109k ≤ $137k (joint > $218k ≤ $274k): pay an additional $81.20, making the total monthly premium $284.10.

    • And for higher income levels: totals rise to $405.80, $527.50, $649.20, depending on MAGI bracket.

Visit to CMS.com for more info
Chris Farmer of 2026_Integral Benefits Group_Agency Engineer Medicare 101Understanding Your Medicare Plan Options

Part B & D – Premium Costs

How Does Medicare Calculate Part B Part D Premiums?
• To determine your Medicare premiums for a specific year, Medicare examines your income from the tax return submitted two years prior.
• This means that for 2026 premiums, your 2024 tax return will be used.

Medicare uses your Modified Adjusted Gross Income (MAGI) to determine your premiums.
• MAGI includes your Adjusted Gross Income (AGI) and tax-exempt interest income.
• Medicare uses income tiers, which determine your premium based on your MAGI.
• Investment income types used to calculate Medicare premiums include interest, dividends, capital gains, rental income, and tax-exempt interest.

Why These Changes?

According to CMS, the increases reflect:

  • Projected price changes (costs of medical services, hospital stays, etc.). CMS

  • Forecasted utilization increases (beneficiaries using more services or costlier services). CMS

  • For Part B: Without certain policy interventions (e.g., changes to skin substitute spending), the premium would have been about $11 higher/month. CMS

What This Means for You

  • Even modest increases in premiums and deductibles can impact annual healthcare budgeting. If you’re used to $185/month for Part B, you’ll now plan for $202.90/month (before IRMAA).

  • If you travel, switch plans, or see many specialists, higher cost-sharing (deductibles, coinsurance) may come into play—so evaluate overall cost, not just the premium.

  • High-income beneficiaries should especially review IRMAA brackets, as cost increases can be sizeable.

  • If you expect heavy utilization (e.g., long hospital stay), increases in hospital deductibles and daily coinsurance for extended stays matter — make sure you understand how far your coverage carries you.

  • Consider revisiting your healthcare coverage decisions, supplemental insurance (Medigap), Medicare Advantage plans, or other out-of-pocket coverage strategies in light of these updated numbers

Questions?

Action Steps to Take

  1. Review your current Medicare coverage: Are you on Original Medicare (Parts A & B)? Are you considering switching to a Medicare Advantage or adding a Medigap policy?

  2. Update your healthcare budget: Move from $185 to $202.90 for the standard Part B premium; adjust for potential IRMAA if applicable.

  3. Check for supplemental coverage: If you anticipate deductibles or coinsurance will be significant, see whether a Medigap plan or Advantage plan with better cost-sharing makes sense.

  4. Be mindful of income changes: If your income has changed significantly (for self-employment, investment income, etc.), you may fall into a different IRMAA bracket.

  5. Mark key dates: Typically, Medicare annual enrollment and plan changes coincide with end-of-year windows. Stay alert for communications from CMS and your plan.

  6. Ask questions: If you’re unclear about how these changes affect you, reach out to Medicare.gov, your local State Health Insurance Assistance Program (SHIP), or a trusted advisor.

Review Your Strategy

The 2026 updates to Medicare’s premiums and deductibles may not represent dramatic shifts, but they are meaningful. An increase of roughly $18/month for Part B and higher deductibles and coinsurance under Part A means that for many beneficiaries, out-of-pocket planning needs to adjust. Coupled with the income-related premium surcharges, it’s more important than ever to review your Medicare strategy proactively and ensure that your coverage meets your health, financial, and lifestyle needs.

Last Updated: December 1st, 2025

Understanding IRMAA 2026: How Your Income Affects Medicare Premiums

Medicare’s base premiums are only part of what some beneficiaries pay. For those with higher income, an extra surcharge called IRMAA (Income-Related Monthly Adjustment Amount) raises your costs for Part B and Part D. That surcharge is determined by your Modified Adjusted Gross Income (MAGI) from two years prior. In 2026, your 2024 tax return will be the basis. Knowing where the 2026 IRMAA brackets may land—and taking steps now—can make a difference.

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What Is IRMAA?

IRMAA — or Income-Related Monthly Adjustment Amount — is an extra amount that certain Medicare beneficiaries pay on top of their standard Medicare Part B and Part D premiums.
It ensures that higher-income individuals contribute more toward the Medicare program.

IRMAA uses a tiered system with income thresholds that determine how much extra you’ll pay.

IRMAA — Quick Refresher

  • It’s a surcharge added to Medicare Part B and (if applicable) Part D premiums.
  • Only applies if your income (MAGI) exceeds a set threshold.
  • Due to the two-year look-back rule, your 2024 income determines your 2026 IRMAA level.
  • IRMAA uses “cliffs” — even $1 over a threshold can move you into a higher tier.

How IRMAA Impacts Your Premiums

Standard Medicare Part B and D premiums are fixed for most beneficiaries, but IRMAA can add significant costs depending on your income bracket.

2026 Premium Changes

Metric 2025 Baseline 2026
Standard Part B premium $185.00 $202.90
Part B annual deductible $257 $283
IRMAA surcharges (Part B) $74.00 → $443.90 $81.20 → $487.00
IRMAA surcharges (Part D) Varies by income $14.50 → $91.00
Filing Status No IRMAA 1st Tier 2nd Tier 3rd Tier 4th Tier 5th Tier
Single ≤ $109,000 $109,001–$137,000 $137,001–$171,000 $171,001–$205,000 $205,001–$500,000 $500,001+
Married (Joint) ≤ $218,000 $218,001–$274,000 $274,001–$342,000 $342,001–$410,000 $410,001–$750,000 $750,001+

2026 Total Monthly Part B Premiums (Including IRMAA)

  • No surcharge: $202.90
  • Tier 1: $284.10
  • Tier 2: $405.80
  • Tier 3: $527.50
  • Tier 4: $649.20
  • Tier 5: $689.90

2026 IRMAA Surcharges for Part D

  • No surcharge: $0.00
  • Tier 1: $14.50
  • Tier 2: $37.50
  • Tier 3: $60.40
  • Tier 4: $83.30
  • Tier 5: $91.00

Additional Notes

  • Your 2024 income determines your 2026 IRMAA level.
  • The first four income brackets are indexed for inflation; the top bracket is frozen until 2028.
  • If your income has decreased due to a major life event (like retirement or divorce), you may request a reconsideration using Form SSA-44.

Key Takeaways

  • The standard Part B premium will rise to $202.90/month.

  • IRMAA surcharges could range from $81.20 to $487/month, depending on your income.

  • Your 2024 income is the key driver of your 2026 IRMAA tier.

IRMAA Brackets

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Table 1: 2026 Medicare Part B Premiums (including IRMAA)

Filing Status MAGI Bracket IRMAA Surcharge Total Monthly Premium
Single / Individual ≤ $109,000 $0.00 $202.90
Single / Individual $109,001 – $137,000 $81.20 $284.10
Single / Individual $137,001 – $171,000 $202.90 $405.80
Single / Individual $171,001 – $205,000 $324.60 $527.50
Single / Individual $205,001 – $499,999 $446.30 $649.20
Single / Individual ≥ $500,000 $487.00 $689.90
Married (Joint) ≤ $218,000 $0.00 $202.90
Married (Joint) $218,001 – $274,000 $81.20 $284.10
Married (Joint) $274,001 – $342,000 $202.90 $405.80
Married (Joint) $342,001 – $410,000 $324.60 $527.50
Married (Joint) $410,001 – $749,999 $446.30 $649.20
Married (Joint) ≥ $750,000 $487.00 $689.90

 

 

Table 2: 2026 Medicare Part D IRMAA Surcharges

Filing Status MAGI Bracket IRMAA Surcharge (Monthly)
Single / Individual ≤ $109,000 $0.00
Single / Individual $109,001 – $137,000 $14.50
Single / Individual $137,001 – $171,000 $37.50
Single / Individual $171,001 – $205,000 $60.40
Single / Individual $205,001 – $499,999 $83.30
Single / Individual ≥ $500,000 $91.00
Married (Joint) ≤ $218,000 $0.00
Married (Joint) $218,001 – $274,000 $14.50
Married (Joint) $274,001 – $342,000 $37.50
Married (Joint) $342,001 – $410,000 $60.40
Married (Joint) $410,001 – $749,999 $83.30
Married (Joint) ≥ $750,000 $91.00
 
How Is IRMAA Calculated?

IRMAA is based on your Modified Adjusted Gross Income (MAGI) from two years prior.
For example, if you’re paying IRMAA in 2026, the Social Security Administration (SSA) and IRS use your 2024 MAGI to determine your premium.

How to lower your IRMAA

There are a few things you can do to lower your IRMAA, such as:

    • Reducing your MAGI. This can be done by contributing to a retirement plan, making charitable donations. you can deduct up to $300 of charitable donations from your MAGI each year.
    • Take advantage of tax credits and deductions. There are a number of tax credits and deductions that can help you reduce your taxable income, which can lower your MAGI.
    • Enrolling in a Medicare Advantage plan with no IRMAA. Some Medicare Advantage plans do not charge an additional premium for people who are subject to IRMAA.
    • Appealing your IRMAA determination. You can appeal your IRMAA determination if you believe it is incorrect. You will need to submit the SSA-44 form to the Social Security Administration.
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Life Events 

Life events that may impact your IRMAA

IRMAA Appeals

While IRMAA is typically unavoidable if your income falls within the specified thresholds, certain life events can lead to significant changes in your income. In these cases, you may have the opportunity to appeal the IRMAA determination through the “Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event” (SSA-44) form.

If any of the life events mentioned above apply to you, you have the option to submit the SSA-44 form to the Social Security Administration. Include evidence of the life-changing event and provide an estimate of your reduced income. It’s essential to know that each appeal is evaluated on a case-by-case basis, and there’s no guarantee of a successful outcome.

The appeal process is two-tiered. First, you will file an informal appeal with the Social Security Administration (SSA). If the SSA does not uphold your appeal, you can then file a formal appeal with the Medicare Appeals Council.

The SSA will consider the following factors when evaluating your appeal:

  • The accuracy of your MAGI
  • Whether there were any errors in the calculation of your IRMAA
  • Whether there were any changes in your income or circumstances that would warrant a reduction in your IRMAA

If you are successful in your appeal, the SSA will recalculate your IRMAA and send you a new determination letter.

Here are some tips for appealing an IRMAA determination:

  • Be sure to file your appeal within the 60-day deadline.
  • Gather all of the documentation that supports your appeal, such as tax returns, income statements, and any other evidence that shows that your MAGI has changed.
  • Be clear and concise in your appeal letter. Explain why you believe the SSA’s determination is incorrect and why you deserve a reduction in your IRMAA.
  • If you are not comfortable writing your own appeal letter, you can hire an attorney or a representative to help you. 
pexels-medinegurbet-21435626-13845034
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Strategies to Reduce Medicare IRMAA

No one wants to deal with unexpected premium hikes because of IRMAA. Although many people face an IRMAA when they first sign up for Medicare, factors like retirement income can help reduce or even get rid of this extra expense. Some Medicare beneficiaries may initially qualify for benefits below the IRMAA threshold, but their income may increase as they age.

Let’s explore some effective strategies to help you minimize your susceptibility to IRMAA increases and maintain a stable financial outlook in your retirement years.

  • Use tax-deferred accounts.

    If you have a taxable investment account, consider moving some of your money into a tax-deferred account, such as a 401(k) or IRA. This strategy allows you to postpone reporting capital gains and dividends until you withdraw the funds, which can lower your MAGI (Modified Adjusted Gross Income).

    For example, if you have $100,000 in a taxable investment account and make a $10,000 withdrawal, you would need to report the $10,000 of capital gains on your tax return. However, if you move that $10,000 into a tax-deferred account, you won’t have to report the capital gains until you withdraw the money in retirement. This approach could save you hundreds or even thousands of dollars in Medicare IRMAA over the years by reducing your MAGI and potentially lowering your Medicare premiums.

  • Maximize your retirement account contributions.

    If you are still working, you can contribute up to $23,000 to your 401(k) or $7,000 to your IRA in 2025. These contributions are deducted from your income before it is calculated for Medicare IRMAA, which can significantly reduce your MAGI (Modified Adjusted Gross Income).

    For example, if you make the maximum contribution to your 401(k), your MAGI will be $23,000 lower than it would be without the contribution. This reduction could save you hundreds of dollars in Medicare IRMAA surcharges by potentially keeping you in a lower income bracket.

  • Consider using Qualified Longevity Annuity Contracts (QLACs).

    QLACs are a type of annuity that allows you to delay Required Minimum Distributions (RMDs) until age 85. Since RMDs are calculated based on your account balance at the end of the year, delaying them means you can also delay the income that is included in your MAGI (Modified Adjusted Gross Income).

    For example, if you have a $1 million IRA and are required to take an RMD of $50,000 in 2025, that $50,000 would be included in your MAGI for the year. However, by using a QLAC to delay your RMDs until age 85, you won’t need to include that $50,000 in your MAGI until 2045. This strategy could save you thousands of dollars in Medicare IRMAA surcharges over the years by keeping your income in a lower bracket.

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Here are a few additional things to keep in mind.
 
  • Dual Eligibility and IRMAA: It’s essential to note that individuals who are dually eligible for both Medicare and Medicaid are usually exempt from paying Part B premiums and, by extension, IRMAA. Medicaid coverage typically takes care of these costs, providing much-needed relief for those with limited financial resources.
  • IRMAA Notifications: Beneficiaries subject to IRMAA will receive notifications from the Social Security Administration. These notifications outline the extra premium amount due to IRMAA and provide details on how to make the payment. Make sure to read and respond to these notices promptly to avoid any interruptions in coverage.
  • IRMAA for Late Enrollees: For those who enroll in Medicare Part B or Part D after turning 65, the initial IRMAA determination might be based on their current year’s income. This adjustment accounts for late enrollees and ensures a fair calculation that aligns with their actual financial situation.
  • IRMAA and Part C (Medicare Advantage): While IRMAA affects Part B and Part D premiums, it doesn’t extend to Medicare Advantage (Part C) plans. However, it’s crucial to understand that even if your Medicare Advantage plan covers your Part B premium, you must continue paying it separately to avoid IRMAA implications.
  • Annual Income Review: Remember that your income is reviewed annually for IRMAA purposes. Even if you haven’t experienced a life-changing event, changes in your income could lead to adjustments in future IRMAA determinations.
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Frequently Asked Questions

  1. What is IRMAA? IRMAA stands for Income-Related Monthly Adjustment Amount. It’s an additional premium that some Medicare beneficiaries with higher incomes have to pay on top of their regular Medicare Part B and Part D premiums.

  2. How is IRMAA calculated? IRMAA is calculated based on your Modified Adjusted Gross Income (MAGI) from two years prior. The higher your MAGI, the more you may have to pay for IRMAA.

  3. What income is considered for IRMAA calculations? The income considered for IRMAA calculations includes your adjusted gross income, tax-exempt interest, and other tax-exempt income.

  4. What are the income thresholds for IRMAA? The income thresholds for IRMAA vary depending on whether you’re an individual or a joint filer (married). Different income ranges correspond to different levels of IRMAA.

  5. When do I have to pay IRMAA? IRMAA is typically added to your Medicare premium if your income exceeds the specified thresholds. You’ll pay this additional amount alongside your regular Part B and Part D premiums.

  6. Can my IRMAA change from year to year? Yes, your IRMAA can change from year to year based on your income. The Social Security Administration reviews your tax return information periodically to determine any changes in your IRMAA status.

  7. How do I know if I need to pay IRMAA? You’ll receive a notice from the Social Security Administration if you need to pay IRMAA. This notice will detail the amount you need to pay and how to pay it.

  8. Is IRMAA the same for Medicare Part B and Part D? No, IRMAA applies separately to Medicare Part B and Part D. Your income will be evaluated for each of these parts independently.

  9. What happens if my income changes during the year? Your IRMAA is based on your income from two years prior. If your current income is significantly lower due to certain life events, you might be able to appeal your IRMAA determination.

  10. Can I appeal an IRMAA determination if I experience a life-changing event? Yes, you can appeal an IRMAA determination if you experience certain life events, such as marriage, divorce, or retirement, that result in a significant income change.

  11. What are considered “life-changing events” for IRMAA appeals? Life-changing events that might warrant an IRMAA appeal include marriage, divorce, annulment, death of a spouse, retirement, reduced work hours, loss of income-producing property, pension plan changes, and settlements from employers.

  12. How do I submit an appeal for IRMAA? To appeal an IRMAA determination, you can submit the “Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event” (SSA-44) form to the Social Security Administration along with evidence of the life-changing event and an estimate of your reduced income.

  13. Is there a deadline for appealing an IRMAA determination? You must file your appeal within 60 days of the date of the determination letter. If you miss the deadline, you may still be able to appeal, but your chances of success are lower, it’s recommended to submit your appeal as soon as possible after experiencing a qualifying life-changing event.

  14. How long does it take to hear back about an IRMAA appeal? The processing time for IRMAA appeals can vary, but you should receive a response from the Social Security Administration once they review your appeal.

  15. Can I reduce my income to avoid paying IRMAA? While it’s not advisable to make financial decisions solely to avoid IRMAA, certain life events like retirement might naturally reduce your income.

  16. What documentation do I need to provide for an IRMAA appeal? You’ll need to provide evidence of the life-changing event that caused the income change, along with an estimate of your reduced income. Supporting documents might include marriage or divorce certificates, retirement notices, or other relevant paperwork.

  17. Can I avoid IRMAA by changing my investment strategies? Changing investment strategies solely to reduce your income for IRMAA purposes may not be practical or advisable. It’s essential to consider your overall financial goals.

  18. Are there any programs to help with paying IRMAA for individuals with financial difficulties? There are assistance programs available for individuals with limited income and resources. You can explore programs like Medicare Savings Programs (MSPs) that might help cover IRMAA costs.

  19. Does IRMAA apply to all Medicare beneficiaries? No, IRMAA only applies to Medicare beneficiaries whose income exceeds specific thresholds.

  20. What happens if I don’t pay my IRMAA premium? If you’re required to pay IRMAA and you don’t, your Medicare coverage might be affected. It’s crucial to fulfill your premium obligations to maintain uninterrupted coverage.

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Last Updated: September 15th, 2025

Medicare Costs Are Rising in 2026: What You Should Know

Medicare is changing in 2026 — and many of those changes could mean higher costs for beneficiaries. Premiums, deductibles, and prescription drug expenses are all set to increase. Understanding how much is expected to go up can help you plan better.

This blog is for educational purposes only and does not constitute financial, tax, or legal advice. You should consult with a qualified financial and tax professional before making any decisions regarding financial products, tax filings, or deductions to determine what is appropriate for your specific situation.

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What’s Expected to Change in 2026 (Projected Figures)

Based on the latest Medicare Trustees’ Report, CMS announcements, and other trusted sources. Final amounts will be confirmed in fall 2025, but these projections provide a strong indication of what’s ahead.

Medicare Current (2025) Projected (2026) Change
Part B Standard Premium ~$185/month $206.50/month +$21.50 (≈ 11.6%)
Part B Annual Deductible $257 $288 +$31 (≈ 12%)
Part D Base Beneficiary Premium ≈ $36.78 $38.99 +6%
Part D Deductible $590 $615 +$25
Part D Out-of-Pocket Cap (Catastrophic Threshold) $2,000 $2,100 +$100

Why These Numbers Matter

  • Even though some of these dollar amounts might seem modest, they add up across services, meds, and other out-of-pocket costs.

  • If your income is high enough, you may also pay extra (“IRMAA” surcharges) on top of these premiums. Small income changes could push you into higher cost brackets.

  • The projected increases mean that, for many, the cost of Medicare will take up a larger share of fixed-income resources (like Social Security).

Your Chance to Make Changes: AEP Is Coming

The Annual Enrollment Period (AEP) runs from October 15 through December 7 each year. This is the only time when most Medicare beneficiaries can:

  • Switch between Original Medicare and Medicare Advantage.

  • Change Medicare Advantage plans.

  • Review and update their Part D prescription drug coverage.

With costs rising in 2026, this year’s AEP is especially important. The plan that worked for you in 2025 may no longer be the most cost-effective option. Taking the time to review your coverage could save you hundreds of dollars in the coming year.

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What You Can Do to Prepare

Since these numbers are already becoming public, you have time to act. Here are steps you can take now:

  • Review your current Medicare plan during the Annual Enrollment Period. Compare what you’re paying now to what you might pay in 2026.

  • Check your prescription drug plan carefully, especially if you pay a premium or lots of co-pays. Some drugs may move to different “tiers” (cost categories), affecting how much you pay.

  • Manage your taxable income, if possible, to avoid IRMAA surcharges. Actions like Roth IRA conversions, charitable contributions, or timing large income events might help.

  • Consider alternative plans such as Medicare Advantage or Medigap, which can sometimes offset rising Original Medicare costs.

  • Look into assistance programs (Extra Help, state assistance) if you qualify — they may reduce your premium or out-of-pocket drug costs.

📅 Don’t Miss These Important Dates: Medicare AEP 2025 Annual Enrollment Period (AEP): October 15 – December 7, 2025

This is your once-a-year opportunity to: Switch between Original Medicare and Medicare Advantage Change or update your Medicare Advantage plan Review and update your Part D prescription drug coverage With premiums, deductibles, and drug costs set to rise in 2026, this year’s AEP is more important than ever. Reviewing your coverage now could save you in the year ahead.
👉 Schedule your Medicare review today

Why a Medicare Review Is Important

Medicare isn’t static, and what worked for you in 2025 might cost more in 2026. A personalized review helps you:

  • Understand how projected changes will affect your specific situation (what you pay now vs. what you’ll pay).

  • Compare all your options side by side — Original Medicare, Medicare Advantage, Medigap, different Part D plans.

  • Avoid surprises when deductibles or premiums go up.

With Medicare costs expected to rise in 2026 — premiums, deductibles, drug-coverage costs — it’s more important than ever to stay informed and proactive. While we don’t yet have the final numbers from CMS, the projections are solid enough to begin planning.

👉 Schedule your Medicare review today so you’ll enter 2026 confident that your coverage fits your health needs and your budget.

Questions?

Disclaimer: This blog is for educational purposes only and does not constitute financial, tax, or legal advice. You should consult with a qualified financial and tax professional before making any decisions regarding financial products, tax filings, or deductions to determine what is appropriate for your specific situation. Scheduling a financial strategy session does not guarantee any specific financial outcome and may involve discussing financial products regulated by applicable laws.

Last Updated: January 11th, 2025

Understanding the 2025 Medicare Changes: What You Need to Know

On November 8, 2024, the Centers for Medicare & Medicaid Services (CMS) released the 2025 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs and the 2025 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 2025.

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Medicare Costs 2025

Medicare is a vital program providing health coverage to millions of Americans. Understanding its associated costs is essential for effective financial planning. This guide outlines the 2025 Medicare costs, including premiums, deductibles, coinsurance, and copayments, and discusses the various coverage options available.

Coverage Options:

Medicare offers several coverage choices to meet diverse healthcare needs:

  • Original Medicare (Part A and Part B): Provides hospital and medical insurance.
  • Medicare Advantage Plans (Part C): An alternative to Original Medicare, often including additional benefits.
  • Part D (Prescription Drug Coverage): Covers prescription medications.
  • Medicare Supplemental Insurance (Medigap): Helps pay out-of-pocket costs not covered by Original Medicare.

Each option has unique costs and benefits, so selecting the one that aligns with your healthcare requirements is crucial.

2025 Medicare Costs:

Significant changes in Medicare costs are scheduled for 2025:

  • Medicare Part B Premiums: The standard monthly premium will increase to $185, up from $174.70 in 2024.

  • Medicare Part A Deductible: The inpatient hospital deductible will rise to $1,676, an increase of $44 from the 2024 amount of $1,632.

  • Medicare Part B Deductible: The annual deductible for all Part B beneficiaries will be $257, up from $240 in 2024.

These adjustments reflect projected increases in healthcare spending and utilization. Staying informed about these changes is essential for managing your healthcare expenses effectively.

For more detailed information, refer to the official Policy Engineer Medicare & You Handbook 2025. 

1. Medicare Part A (Hospital Insurance) Costs

Medicare Part A provides hospital inpatient care and is premium-free for most individuals. This benefit applies to those who, or whose spouses, have paid Medicare taxes for at least 10 years (40 quarters), commonly known as “premium-free Part A.”

Premiums for Those Not Qualifying for Premium-Free Part A:

If you don’t qualify for premium-free Part A, you may purchase it. In 2025, the monthly premiums are:

  • $285 for individuals with 30-39 quarters of Medicare-covered employment.
  • $518 for individuals with fewer than 30 quarters.

These premiums have increased from the 2024 rates of $278 and $505, respectively.

Deductible:

The Part A deductible for each inpatient hospital benefit period is $1,676 in 2025, up from $1,632 in 2024. There’s no limit to the number of benefit periods you can have in a year, so you may pay this deductible multiple times annually.

Inpatient Hospital Stay Costs:

  • Days 1-60: $0 after paying the Part A deductible.
  • Days 61-90: $419 copayment per day, an increase from $408 in 2024.
  • Days 91-150: $838 copayment per day while using your 60 lifetime reserve days, up from $816 in 2024.
  • After day 150: You are responsible for all costs.

Skilled Nursing Facility Stay Costs:

  • Days 1-20: $0 copayment.
  • Days 21-100: $209.50 copayment per day, up from $204 in 2024.
  • Days 101 and beyond: You are responsible for 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.

 

2. Medicare Part B (Medical Insurance) Costs

Medicare Part B covers essential medical services, including physician visits, outpatient hospital services, durable medical equipment, and various other health services not covered by Medicare Part A. In 2025, there are significant changes to Part B premiums and deductibles:

Premium Increase: The standard monthly premium for Medicare Part B enrollees will be $185.00 in 2025, a $10.30 increase from $174.70 in 2024. This increase is primarily due to projected price changes and assumed utilization increases consistent with historical experience.                                                             

The premium amount can be higher depending on your income. You’ll pay this premium each month, even if you don’t receive any Part B-covered services.

Deductible Increase: The annual deductible for all Medicare Part B beneficiaries will be $257 in 2025, up from $240 in 2024, an increase of $17. This deductible is paid once each year before Original Medicare starts to cover your services

General Costs for Services (Coinsurance): After meeting the Part B deductible, you typically pay 20% of the Medicare-approved amount for each service or item. 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.

  • Durable Medical Equipment: 20% of the Medicare-approved amount for items 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 receive services in a hospital outpatient clinic or department, you may have to pay an additional amount to the hospital.

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

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

Income-Related Monthly Adjustment Amounts (IRMAA): Beneficiaries with higher incomes pay an additional amount, known as IRMAA, on top of the standard Part B premium. The 2025 Part B total premiums for high-income beneficiaries with full Part B coverage are as follows:

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 $106,000 (Individual)         $185.00      $185.00
Less than or equal to $212,000 (Joint)         $185.00      $185.00
Greater than $106,000 and less than or equal to $133,000 (Individual)         $259.00      $259.00
Greater than $212,000 and less than or equal to $265,000 (Joint)         $259.00      $259.00
Greater than $133,000 and less than or equal to $166,000 (Individual)         $364.90      $364.90
Greater than $265,000 and less than or equal to $332,000 (Joint)         $364.90      $364.90
Greater than $166,000 and less than or equal to $199,000 (Individual)         $470.80      $470.80
Greater than $332,000 and less than or equal to $398,000 (Joint)         $470.80      $470.80
Greater than $199,000 and less than $500,000 (Individual)         $576.70      $576.70
Greater than $398,000 and less than $750,000 (Joint)         $576.70      $576.70
Greater than or equal to $500,000 (Individual)         $628.90      $628.90
Greater than or equal to $750,000 (Joint)         $628.90      $628.90

 

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 $106,000     $0.00       $185.00
Greater than $106,000 and less than $399,000     $576.70       $576.70
Greater than or equal to $399,000     $628.90       $628.90

These adjustments are based on your reported income and are designed to ensure that higher-income beneficiaries contribute more to the Medicare program.

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 2025 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:

MAGI (Individual) MAGI (Joint) Part D IRMAA
Less Than $106,000       Less Than $212,000               $0.00
$106,001 – $133,000       $212,001 – $266,000               $13.70
$133,001 – $167,000       $266,001 – $334,000               $35.30
$167,001 – $200,000       $334,001 – $400,000               $57.00
$200,001 – $500,000       $400,001 – $750,000               $78.60
> $500,000    > $750,000               $85.80

 

For Married Individuals Filing Separately:

MAGI Part D IRMAA
Less Than  $106,000               $0.00
$106,001 – $399,000               $78.60
> $399,000               $85.80

 

Part D Extra Help

If you’re seeking assistance with prescription drug costs, the Medicare Part D Low-Income Subsidy (LIS), also known as “Extra Help,” may be available to you. Eligibility for this program in 2025 is based on your income and resources:

Income Limits:

  • Individual: Annual income up to $22,590.
  • Married Couple (living together): Annual income up to $30,660.

Resource Limits:

  • Individual: Resources not exceeding $17,220.
  • Married Couple (living together): Resources not exceeding $34,360.

Resources include assets such as bank accounts, stocks, and bonds, but exclude your primary residence, personal possessions, and vehicles. It’s important to note that certain types of income and resources may not be counted, so even if your income or resources are slightly above these limits, you may still qualify.

To apply for Extra Help, you can visit the Social Security Administration’s website or call 1-800-772-1213. TTY users can call 1-800-325-0778. Applying for this program can significantly reduce your prescription drug costs, making your medications more affordable.

 

Part D Late Enrollment Penalty

If you did not enroll in Medicare Part D when first eligible and lacked creditable prescription drug coverage for 63 consecutive days or more, you may incur a late enrollment penalty. This penalty is added to your monthly Part D premium and is calculated as follows:

  • Calculation: 1% of the national base beneficiary premium multiplied by the number of full, uncovered months you were eligible but not enrolled.

  • 2025 National Base Beneficiary Premium: $36.78.

Example: If you were without creditable coverage for 12 months, your penalty would be 12% of $36.78, which equals approximately $4.41. This amount is added to your monthly Part D premium.

It’s important to note that this penalty is typically applied for as long as you have Medicare Part D coverage. To avoid such penalties, ensure you enroll in a Part D plan when first eligible or maintain creditable prescription drug coverage.


Part D Catastrophic coverage

Starting January 1, 2025, Medicare Part D will undergo significant changes aimed at reducing out-of-pocket expenses and simplifying the prescription drug benefit for beneficiaries. Here’s an overview of the key updates:

1. Annual Out-of-Pocket Cap: A new annual out-of-pocket maximum of $2,000 will be implemented. Once your spending on covered prescription drugs reaches this limit, you won’t have to pay any additional costs for the rest of the year.

2. Elimination of the Coverage Gap (“Donut Hole”): The coverage gap, commonly known as the “donut hole,” will be eliminated. This change simplifies the benefit structure, ensuring continuous coverage without a gap in benefits.

3. Introduction of a Monthly Cap on Out-of-Pocket Costs: Beneficiaries will have the option to spread out their out-of-pocket expenses over the year through a monthly cap. This allows for more predictable and manageable prescription drug costs.

4. Changes in Plan Offerings: The number of stand-alone Part D plans is expected to decrease, potentially simplifying the selection process for beneficiaries. However, it’s important to review available plans to ensure they meet your specific medication needs.

5. Enhanced Manufacturer Discounts: Pharmaceutical manufacturers will be required to provide discounts during the initial coverage phase, which may lead to lower costs for certain medications.

These changes are designed to make prescription drug costs more predictable and affordable for Medicare beneficiaries. It’s advisable to review your current Part D plan during the open enrollment period to understand how these updates may affect your coverage and to make any necessary adjustments.

 

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.

  • For 2025, the out-of-pocket (OOP) limits for Medigap Plans K and L have been updated as follows:

    • Plan K: The OOP limit is $7,220.
    • Plan L: The OOP limit is $3,610.

Medicare Part B covers services such as physician visits and outpatient care. In 2024, the monthly premium for Part B is $174.70 ($185.00 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 $240 ($257 in 2025), 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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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: January 11th, 2025

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: January 11th, 2025

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: January 11th, 2025

Last Updated: January 11th, 2025

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: January 11th, 2025

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.

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We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Currently we represent 14 organizations which offer 100 products in your area. Please contact Medicare.gov or 1–800– MEDICARE to get information on all of your options.
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