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How To Avoid Part B & D Late Enrollment Fees

If you are eligible for Medicare and do not enroll in Part B and D when you are first eligible, you may have to pay a late enrollment penalty. It’s important to understand the enrollment periods and penalties associated with Medicare Part B and D to avoid late enrollment fees. This blog will cover some tips to help you avoid late enrollment fees.

 

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→ Click here to schedule a free Medicare review if you want help from a licensed insurance agent to review your Medicare plan and eligibility. 

 

When should you enroll in Medicare to avoid penalties?

Medicare’s sign-up window starts three months before your birth month when you turn 65 and ends three months after. You will have to enroll in Medicare during this sign-up window to avoid penalties unless you have creditable coverage (ex., employer health insurance plan). 

You will also have guaranteed issue rights during your initial enrollment period; this means that insurance companies can’t deny you a Medicare Supplement insurance plan because of pre-existing health conditions or disabilities.

If you don’t enroll in Medicare in time, you most likely have to pay the penalty for parts B and D. 

* Late Enrollment Penalty part B: Your monthly Part B premium could be 10% higher for every entire 12-month period that you were eligible for Part B.

 That means one year is 10%; two years is 20%, three years is 30%, and so on.

*Late Enrollment Penalty part D: For each month you delay enrollment in Medicare Part D, you will have to pay a 1% Part D late enrollment penalty (LEP). The penalty is calculated based on 1% of that year’s national average Part D premium.

For example, the national average for 2023 is $31,50, so if you went 18 months without credible prescription coverage, your penalty would be as follows: $31,50 x 1% = $0.315 x 18 months = $5.67 penalty per month.

Medicare enrollment periods

  • 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. You have to enroll in Medicare during this sign-up window to avoid potential 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 AEP to make changes to their Medicare coverage – from October 15 to December 7
  • Open Enrollment Period: January 1 to March 31
  • Lock-in Period: April 1 to December 31
  • Special Enrollment Period: Special circumstances within the year
  • 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).

Tips

  1. Understand the enrollment periods: There are specific enrollment periods for Medicare Part B and D. Your initial enrollment period is a seven-month window around your 65th birthday, including the three months before, the month of, and three months after. If you miss this window, you may have to pay a late enrollment penalty.

  2. Enroll in Part B and D when you are first eligible: It’s important to enroll in Part B and D when you are first eligible to avoid late enrollment penalties. If you’re still working and have health insurance through your employer, you may be able to delay enrolling in Part B without penalty, but you should check with your employer to make sure.

  3. Understand the penalties: The late enrollment penalty for Part B is 10% of the monthly premium for every year that you were eligible but did not enroll. The late enrollment penalty for Part D is 1% of the national base beneficiary premium for every month that you were eligible but did not enroll.

  4. Consider enrolling in a Medicare Advantage plan: If you enroll in a Medicare Advantage plan that includes Part D coverage, you may not need to enroll in a separate Part D plan. However, it’s important to make sure that the plan you choose covers all of the medications you need.

  5. Keep your coverage up-to-date: If you already have Part B and D coverage, make sure to keep your coverage up-to-date to avoid any gaps in coverage that could lead to late enrollment penalties.

Most common Questions:

1. What if you had creditable coverage through your work or your spouse’s employer?

Depending on your plan through work, you may not need to enroll in Medicare part B or D. If you do have creditable coverage through work, keep the Certificate of Creditable Coverage in your records as proof. You will likely need to use this as proof that you had creditable coverage later. Plan and enroll before your employer coverage ends to avoid penalties due to a gap in your coverage. 

Click here to learn more about medicare health coverage through work.

2. What happens if you don’t have creditable coverage?

As soon as your coverage terminates, you have 63 days to enroll in new coverage, or else you begin to accrue the Part B and Part D penalties. If you are without credible coverage for 12 months, you will be assessed a premium penalty for Part B and Part D whenever you enroll. Medicare Advantage Prescription Drug (MAPD) plans will have a Part D penalty.

Your creditable coverage will end when you retire or change jobs. When it ends, you will need to enroll in Part B and/or a Part D prescription plan to avoid any late enrollment penalties. 

3. Does your employer offer Cobra?

*If you have COBRA before signing up for Medicare, your COBRA will most likely end once you sign up. You will have eight months to sign up for Part B without a penalty, whether or not you choose COBRA. If you miss this period, you’ll have to wait until January 1 – March 31 to sign up, and your coverage will start on July 1. This could cause a gap in your coverage, and you could end up with a lifetime Part B late enrollment penalty (medicare.gov).
* Generally, COBRA coverage is offered for 18 months (36 months in some cases).

Click here to read other essential facts about cobra 

4. What if you are on disability?

Disability and Medicare Penalties

If you have a disability, you qualify for social security disability payments before 65. You will also be eligible to receive Medicare health coverage and will receive Medicare Part A (Hospital) automatically. The only thing you will need to do is; to determine if it is necessary to enroll for Part B/D during the initial enrollment period to avoid penalties or if you can delay your enrollment. If you don’t sign up or drop out before you turn 65, you will have to pay a late penalty. This is an additional 10% of the Part B premium for each year you didn’t have Part B but were eligible for and for Part D: for each month you delay enrollment in Medicare Part D, you will have to pay a 1% Part D late enrollment penalty (LEP).

When you turn 65, your initial enrollment period (on disability) will restart. You lose your eligibility for Medicare based on disability, and it will be based on your age; you will have the same enrollment period as anyone else who turns 65.

Your Medicare sign-up window is from 3 months before your birth month when you turn 65 to 3 months later. 

Being on Disability and Paying a Part B Late Penalty

When you turn 65, the initial enrollment period you had before (while on disability) will restart. The Medicare coverage restarts as if you never had it before. Any late penalties for Part B or Part D (drug coverage) you had to pay when you were on disability will be waived; you will no longer have to pay those.

How do Disability and Guaranteed Issue Rights work?

After being on disability, you will be eligible for the guaranteed issue rights; this means that companies can’t deny your Medicare Supplement insurance plan application because of pre-existing health conditions or disabilities.

Everyone is eligible for the guaranteed issue rights during their initial enrollment period, even if they were denied before when they were on disability.

Make sure to review Medicare plans and prices yearly. 

Retirement Planning & Long-term Care

Long-term care is often overlooked, and the costs are underestimated in retirement planning. On top of that, long-term care expenses are growing every year. The possibility of needing help taking care of yourself later in life is probably hard to imagine and most likely not on your priority list. However, if you forget to add this to your planning, you might run out of your retirement savings before you know it.

Why is it important to plan for long-term care?

As we journey through life, it’s essential to consider our present needs and potential challenges that may arise in the future. Long-term care is a crucial aspect that often gets overlooked until it becomes an immediate concern. Research indicates that an astounding 70% of individuals over 65 will require some form of long-term care in their lifetime (acl.gov). Therefore, proactive planning for long-term care is not only wise but necessary to ensure a worry-free and secure future. In this blog, we will delve into the significance of preparing for long-term care and explore various options that can help you navigate this complex terrain.

Ask yourself the following question;

If you need long-term care, how will you pay for it, or who will pay for it?

The Reality of Long-Term Care Costs: Before we dive into the planning options, let’s first understand the magnitude of long-term care expenses. According to the median cost survey conducted by Genworth in 2022, here’s an overview of the average annual costs for various care options:

  1. In-home homemaker services: $53,768
  2. In-home health aide: $54,912
  3. Community adult day care: $19,240
  4. Community assisted living facility: $51,600
  5. Nursing home semi-private room: $93,075
  6. Nursing home private room: $105,850

Based on the numbers, it’s clear that long-term care can have a major impact on your financial stability if you don’t plan for it properly.

What about Health Insurance and Medicare?

While many individuals may assume that their regular health insurance or Medicare will cover long-term care costs, this is unfortunately not the case. Medicaid can provide assistance if your income falls within the Medicaid income limits. However, relying solely on Medicaid might restrict your choices for care, limiting the options for location and type of care you receive. Early planning is, therefore, essential to ensure you have the freedom to make informed decisions about your long-term care preferences.

Please plan and be ready in case you need it

There are different ways to prepare for these costs, and they all have ups and downs. We will discuss five options.

Option 1: Long-term care insurance

Long-term care insurance is a reliable option that offers peace of mind for the future. People opt for this type of insurance for two primary reasons:

  1. Protecting Retirement Savings: Long-term care insurance shields your hard-earned retirement savings from being depleted by exorbitant care expenses.

  2. Choice and Flexibility: With long-term care insurance, you can choose the type of care you desire, be it in your home, an assisted living facility, adult daycare center, hospice care, memory care, or nursing home care.

This insurance covers not only routine daily activities like bathing and dressing but also chronic medical conditions, disabilities, and disorders. While the policy price may increase in the future, the benefits far outweigh the potential drawbacks. The cost of the policy can be influenced by factors such as age, the maximum amount it pays per day, the number of years it will pay, and optional benefits like inflation protection.

What does long-term care insurance cover?

Long-term care insurance not only covers the basic routine daily activities, like bathing, dressing, or getting in and out of bed, but it will also cover in case of a chronic medical condition, a disability, or a disorder.

  • Your home.
  • An assisted living facility.
  • An adult daycare center.
  • Hospice care.
  • Memory care.
  • Nursing home care.

The downside is that you may never use it, and your policy price could increase in the future.

The price of a policy can be based on the following:

  • Age: the younger you are, the lower your premium will be.
  • The maximum a policy pays per day
  • The maximum number of years a policy will pay
  • Optional benefits, such as inflation protection

Option 2: Living benefits (life insurance)

Some individuals may consider leveraging their permanent/whole life insurance policy with an accelerated death benefit. This enables you to use a portion of your death benefit to cover long-term or other medical costs while you are alive. However, it’s essential to review your policy carefully to understand its limitations and consider adding riders if needed.

Another innovative option is a hybrid life insurance long-term care policy, which combines both life insurance and long-term care coverage. This provides more flexibility and can be a suitable alternative for those who wish to address both needs in one comprehensive policy.

 It is essential to review your policy to determine what it includes and if you need to add riders. 

  •  Check if the accelerated death benefit will increase your premium or if it is included in your premium.
  • Check The triggers you need to get your accelerated death benefit approved. A common trigger is having a terminal illness. Check the triggers you can use for the accelerated death benefit.

Option 3: Retirement Savings

While using retirement savings to cover long-term care expenses eliminates the risk of paying for something you might not use, it could have adverse consequences. Depleting your retirement funds might leave your significant other or family members in financial hardship or lead to an unfortunate situation where you run out of money to support yourself in later years.

Option 3: Your family, friends, or go fund me

Unfortunately, many individuals find themselves unprepared for long-term care and end up relying on the support of their family, friends, or even resorting to crowdfunding. Research indicates that 64% of people who overlook planning for long-term care have to depend on the help of their family (Ahip.org, September 2016). However, this route is uncertain and does not guarantee that you will receive the care you need. This makes it unpredictable; you will depend on other people and won’t guarantee that you will get the care you need.

Option 4: Annuities

Funding long-term care costs can be achieved through annuities, which involve investing a lump sum with insurers. This generates a steady income that can be utilized for various expenses, including long-term care. The nature of the annuity chosen determines whether the income stream is consistent or variable. Although annuities are available for purchase at any age, they usually require a significant investment and may have a waiting period before payments begin..

Planning for long-term care can be tricky, but it is crucial. Feel free to schedule a meeting with one of our licensed financial planners if you need help creating a plan for long-term care or retirement. Identifying goals and objectives is critical to a successful retirement.

Long-term care
Life Insurance
Annuities

Is a Medicare Advantage PPO plan or Medigap better for your healthcare needs

Are you new to Medicare? Or are your out-of-pocket expenses too high? Have you noticed that Original Medicare isn’t enough to cover your medical needs but don’t know which policy is best for you? There are many options, and it all depends on your personal preferences. Would a Medigap plan be the right fit, or would a Medicare Advantage plan like a PPO be better for you? We have reviewed the two to help you make your decision. 

What is the difference?

Medicare Advantage PPO plans: are private health insurance plans that offer all of the benefits of Original Medicare (Part A and Part B) and may include prescription drug coverage. Medicare Advantage PPO plans typically have lower out-of-pocket costs than Original Medicare but may have a narrower network of doctors and hospitals. Medigap: is a type of private health insurance plan that helps to pay for the out-of-pocket costs of Original Medicare, such as deductibles, copayments, and coinsurance. Medigap plans are standardized, so they all offer the same benefits. However, Medigap plans can have different monthly premiums, so it is important to compare plans before you choose one.

 What should you consider when reviewing Medigap with a Medicare Advantage PPO plan?

We will list some essential things to consider when reviewing the different insurance policies.

1. Your Initial Enrollment Status

First, you should check if you missed your Medigap initial enrollment

If you missed it, you might have to go through medical underwriting. The medical underwriting process for Medigap insurance usually consists of a series of medical questions inside the application. The insurance company could deny your application if you answer “yes” to specific health-related questions. If a Medigap plan fits your needs better, it can still be worth applying. Worst-case scenario, you can keep your current insurance plan if denied.   

During your initial enrollment, you have guaranteed issue rights. These rights prohibit insurance companies from denying or overcharging you for a Medigap policy. It is important to note that there might be a different rule in your state, so check the guaranteed issue rights in your state. f you are in your initial enrollment period, a Medigap insurer can’t deny you if you have a medical condition, and you won’t have to do any medical exams.

2. Your out-of-pocket costs

It is also essential to think about your out-of-pocket costs. Medigap plans may have a higher out-of-pocket cost than a PPO Medicare Advantage plan.

Remember that most Medicare Advantage PPO plans and Medigap plans have a monthly cost, which would be on top of what you pay for Medicare Part B. If you have a Medigap plan, you would have to pay for Part B and a Part D Prescription plan if you don’t have sufficient prescription coverage through your employer. This can make a Medigap plan look more expensive, but it is important to consider the out-of-pocket costs such as coinsurance, deductibles, and copayments. These costs are generally lower with a Medigap plan. For 2023, the out-of-pocket maximum for a Medicare Advantage plan is $8,300 (only for Part A and B, prescriptions not included). If you have a PPO plan, there will be two annual limits on out-of-pocket costs. One limitation is for in-network costs; the other is for combined in-network and out-of-network costs. Keep this in mind when you are reviewing the insurance plans. The cost-efficient option might not be the cheapest or best policy for your needs, so it’s important to carefully consider each plan’s costs and offerings before making a decision.

3. The plan you want or need

Do you want to maximize your needs? Do you travel outside the U.S.? A Medigap plan most likely won’t provide all of these benefits. There are some Medigap plans that have added benefits such as vision, hearing, and over-the-counter pharmacy allowance. Some Medigap policies offer emergency health care services when you are outside the U.S. Do you need an extensive network of providers, or will you go to the same provider each time? This can influence the price of your visits significantly.

Should you choose Medicare Advantage PPO or Medigap?

Medigap (also called Medicare Supplements) pays to fill the gaps after Medicare. This will leave you with low out-of-pocket costs. Often, you will not even have a doctor co-pay. However, these plans often have a higher monthly premium. If you only consider the monthly premiums and not the out-of-pocket costs. The total price that you would spend yearly could be lower. Medicare Advantage PPO plans may maximize your needs and budget if you use the network of preferred doctors. It can be more expensive if you often choose out-of-the-network providers for your medical needs. With these plans, you pay as you go; you will have to pay your co-pay at the time of each service. These services go from doctor visits to lab work, hospital stays, surgeries, and more. Some people don’t mind the out-of-pocket costs, while others would rather have lower out-of-pocket costs. 

Overview of the two types 

1. Medicare Advantage PPO plan

Medicare Advantage (part c) has six different plans. All Medicare Advantage plans include Medicare parts A and B.

– Medicare Part A: includes hospital services, limited skilled nursing facility care, limited home healthcare, and hospice care
– Medicare Part B: includes medical insurance for the diagnosis, prevention, and treatment of health conditions

The Preferred Provider Organization plan (PPO) is offered by a private insurance company and lets you choose any provider who accepts Medicare. With this plan, you can go to network doctors, health care providers, and hospitals or use out-of-network providers. If you choose to get your healthcare from out-of-network providers, it will likely be more expensive than within the network.

Often Prescription plans are covered within this plan; however, if it is not covered, you won’t enroll in a Medicare Drug Plan (part D). It is essential to pick your plan carefully.

Pros

  • You can keep flexibility in the providers you visit
  • You won’t need to choose a primary doctor
  • A referral is not required (in most cases)
  • Save money by using in-network specialists
  • Most likely, prescription drug coverage
  • Easy to match your budget since you can choose your providers

Cons

  • Out-of-network providers are more expensive.
  • You must continue to pay your Medicare Part B premium.
  • Can charge a deductible amount for both the plan and the prescription drug portion of the plan.
  • Typical co-payment amounts may vary.
  • With a Medicare PPO plan, you will have both an in-network and out-of-network max.
  • Medicare PPOs aren’t as widely available as HMOs.
  • Annual Changes to the plan formulary, pharmacy network, and provider network.
  • You can’t enroll in Part D drug prescription coverage

2. Medigap

Medigap (also known as Medicare Supplement Insurance) exists to cover out-of-pocket costs, such as co-payments or deductibles. You will still have Original Medicare parts A and B. Medigap functions as an add-on policy to Original Medicare. These policies are standardized and go by letters: A, B, C, D, F, G, K, L, M, and N in most states. Each lettered plan’s benefits are the same, regardless of which insurance company sells them. You will have access to any Medicare-appointed doctor in the U.S.

how does medigap work

Pros

  • Medigap will help fill some gaps that Original Medicare doesn’t cover.
  • You will have access to providers nationwide who accept Medicare.
  • Most Medigap plans will help pay the Part A deductible.
  • You can get a supplemental plan covering Part A and Part B coinsurance.
  • With Plan F, you don’t have to worry about out-of-pocket expenses.
  • Standardized – 10 plans that have precisely the same coverage no matter which company.
  • A Medicare Supplement company cannot cancel your policy for using the policy too much. Your policy will renew automatically every year.
  • You can change your Medigap plan or company at any time you want.
  • You have 30 days to drop the coverage and receive your premium back when your policy is approved.
  • Pays for deductibles, co-pays coinsurance

Cons

  • Medigap plans do not cover prescription drugs.
  • If it is more expensive, your rate most likely increases
  • You have to have Part A and Part B.
  • Do not cover routine dental, vision, or hearing care.
  • After your Guarantee issue ends, getting approved might be tricky if you have certain health conditions.
  • Medigap Has fewer benefits than Medicare Advantage plans.
Review plans and get a quote
Schedule a meeting with a Licensed Insurance Agent

 

 

Maximizing Your Medicare
Coverage During
the Annual Election Period (AEP)

Welcome to the Annual Election Period (AEP), a time when you have the opportunity to take a closer look at your Medicare coverage and make changes to ensure it suits your needs perfectly. This annual checkup is crucial to ensure you’re getting the best possible policy for your medical requirements. Surprisingly, seven out of ten Medicare enrollees forget to review their policy every year, missing out on potential cost savings. Don’t be one of them! By reviewing your coverage, Let’s ensure you kick off 2024 with the right Medicare or Prescription insurance plan. You’ve got seven weeks to make those changes, so let’s dive in!

 
schedule your medicare review
Medicare plan finder

Are you looking for extra benefits like vision, dental, and hearing coverage or lower out-of-pocket costs? A Medicare Advantage plan might be the right choice for you. These plans often provide more comprehensive coverage than Original Medicare.

The AEP Basics

The Annual Election Period runs from October 15th to December 7th. Any Medicare plan enrollee can take advantage of this period to assess their coverage. It’s essential not to let your existing plan auto-renew without thoroughly reviewing it. Your policy can become significantly more expensive if you forget to do this. Medicare insurers can update their plans each year, affecting prices, networks, and formularies.

Here’s a quick overview of the switches you can make during the Annual Enrollment Period:

What switches can you make during the Medicare Annual Enrollment period?

This year’s annual election period starts on October 15th and ends on December 7th. Don’t skip out on the chance to put yourself into the best plan for next year. Anyone can use the Annual Election Period (AEP) to change their Medicare coverage. You can use our Medicare plan finder tool for free to review the available plans every year.

*Avoid letting your existing plan auto-renew without reviewing it. Your policy can become much more expensive if you forget to do this. This is because each year, your medicare insurer can update their plans. They can update their policies: the prices of your existing policy, your policy’s network can change, or your plan’s formulary can change. 

Here’s an overview of the switches you could make:

1. Change to a Medicare Advantage plan from Original Medicare.

The Medicare Advantage Plan is for people who want extra benefits such as vision, dental, and hearing or lower out-of-pocket costs. Sometimes, you can get more coverage for less with an Advantage Plan than your Original Medicare plan. Go to the number three list to view the available plans and Medicare Advantage tips.

2. Change from a Medicare Advantage plan to Original Medicare, Part A, and Part B.

If you prefer a simpler plan without extra benefits or need a broader provider network, you can switch back to Original Medicare. Just be sure to check if you need to add a Part D prescription plan to avoid late penalties.

3. Change from one Medicare Advantage plan to another.

You can switch your Medicare Advantage plan if your medical needs have changed. Or if other plans have expanded their benefits. 

There are different types of Medicare Advantage plans. 


  • HMO (Health Maintenance Organization):
  • PPO (Preferred Provider Organization)
  • PFFS (Private Fee-for-Service)
  • SNP (Special Needs Plan)
  • HMO-POS (Health Maintenance Organization Point-of-Service)
  • MSA (Medical Savings Account). 

Check with a licensed insurance agent at Policy Engineer which plan best fits your needs during AEP. Since advantage plans are not standardized, you may prefer a different insurer that may provide additional benefits. With our Medicare plan finder, you can review Medicare plans and enroll in the one that fits your needs and budget.

4. Enroll in a Part D prescription drug plan.

When your creditable coverage stops because you stopped working or changed jobs, you must enroll in a Part D prescription plan to avoid late enrollment penalties.

Late Enrollment Penalty Part D: For each month you delay enrollment in Medicare Part D, you will have to pay a 1% Part D late enrollment penalty (LEP)

*If you have creditable coverage, keep the Certificate of Creditable Coverage in your records as proof. You might need to show this later on.

5. Switch from one Part D plan to another.

Your prescriptions might have changed, and another plan could have a lower cost for your new prescription. It is essential to review your Medicare coverage and compare it to the other plans to lower your medication costs. 
 

6. Change from one Medicare Supplement (Medigap) plan to another. 

You don’t have to wait until AEP to change your Medigap plan. However, if you want to change your Medigap plan, you might have to undergo medical underwriting. Unless you still have the guaranteed issue rights due to your situation. If you don’t have the guaranteed issue rights, the insurer can refuse to sell you a plan, offer you a plan with less coverage, or charge you more because of your health. Choosing the right Medigap plan during your open enrollment period is very important because changing your policy after that isn’t as easy for Medigap as for the other Medicare parts. Even though it is harder to change your policy, there are still many people who would want to change their Medigap plan. Review your Medicare policy if your medical needs have changed. You might need to switch to another plan to be fully covered.

You can choose between ten Medigap plans. These ten plans have the same coverage regardless of company, so checking whether you are overpaying for your policy is important. Sometimes, switching to a different insurer is better to avoid overpaying for the same policy. 

7. Change from one Medicare Prescription Drug Plan to Another

Your prescriptions may have changed, or you may need better coverage. It’s important to find a Part D plan that aligns with your needs throughout the year, considering Medicare’s four-stage structure for prescription coverage.

How do I compare Medigap policies? 

The chart below shows basic information about the different benefits that Medigap policies cover. If a percentage appears, the Medigap plan covers that percentage of the benefit, and you are responsible for the rest. For example, if the chart shows 100%, you would be responsible for zero.

medigap compare plans

6. Change from one Medicare prescription drug plan to another.

Did the number of prescriptions change, or do you need better coverage? Not all Part – D prescription insurance plans are created equal; different plans can cater to having more coverage during one or more of the four stages of your Part – D coverage. Medicare has a 4 stage structure for how you pay for prescriptions throughout the year. Get the plan that fits your needs best.

7. You can opt out of Medicare prescription drug coverage altogether.

If you enrolled in a plan with creditable coverage, you no longer need to have Medicare Part D, so don’t forget to opt out of your Medicare Prescription Drug Coverage. You could have creditable coverage through your spouse’s work or because you enrolled in a Medicare Advantage plan with prescription coverage.

Enrolling in a Medicare Plan with Policy Engineer is simple!

Our Medicare plan finder tool empowers you to assess available plans in your zip code. By considering the star ratings, which evaluate plan quality, member satisfaction, and other key factors, you can confidently select a plan that aligns with your healthcare needs.

  1. Determine the type of insurance you need.
  2. Answer a few quick questions to get a quote.
  3. Pick the company and options that you prefer.
  4. Complete an online application yourself or schedule a virtual meeting to enroll with a licensed insurance agent at Policy Engineer.

How do you use our Medicare plan finder?

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With our Medicare plan finder tool, you can review the available plans in your zip code. After you pick the plan that fits your medical needs best, you can self-enroll.

Check the star rating when Selecting a Medicare plan. These ratings are updated every year and will help you compare. The stars are based on the following:

  • Quality of the plans
  • Member satisfaction surveys, plans, and providers
  • Performance on more than 50 key factors. 

When is your Medicare sign-up window?

When to Sign Up for Medicare

Your Medicare sign-up window spans three months before your birth month when you turn 65 to three months later. Enrolling in Medicare Part A and Part B during this window is crucial to avoid penalties. Failing to register on time could lead to higher premiums for parts B and D. Remember, the Medicare Annual Election Period also offers another opportunity for enrollment.

* Late Enrollment Penalty Part B: Your monthly Part B premium could be 10% higher for every 12-month period you were eligible for Part B.

*Late Enrollment Penalty Part D: For each month you delay enrollment in Medicare Part D, you will have to pay a 1% Part D late enrollment penalty (LEP)

when to sign up for medicare

Do you want to learn more about Medicare?

Click the button below to visit our Medicare plan finder to make any changes. You can even self-enroll or schedule a meeting with a Licensed Insurance Agent to review your policy to ensure you have the coverage you need and that you are not overpaying for your Health insurance.

schedule your medicare review
Medicare plan finder

Should you keep Health Insurance through your employer or switch to Medicare? 

When it comes to healthcare coverage, there are many different options available, from health insurance plans provided by your employer to government-funded programs like Medicare. For those who are eligible for both, deciding whether to keep health insurance through your employer or switch to Medicare can be a complex decision. Each option has its advantages and disadvantages, and the best choice will depend on your individual situation and needs.

In this blog post, we’ll explore the key factors to consider when deciding whether to keep your employer-based health insurance or switch to Medicare. We’ll take a closer look at factors such as cost, benefits, network, and eligibility requirements to help you make an informed decision. By the end of this post, you should have a better understanding of the pros and cons of each option and be better equipped to make the right choice for your healthcare coverage.

Deciding whether to keep health insurance through your employer or switch to Medicare depends on your individual situation and needs. Here are some factors to consider:

  1. Age: If you are under 65 years old, you may not be eligible for Medicare unless you have a qualifying disability. In this case, you would need to rely on health insurance provided by your employer or purchase health insurance on your own.

  2. Employer size: If your employer has 20 or more employees, they are required to offer you the option to continue your health insurance coverage through COBRA when you leave your job. COBRA allows you to keep your employer-based health insurance for up to 18 months after you leave your job. However, COBRA can be expensive since you will be responsible for paying the full premium, including the portion that your employer previously paid.

  3. Cost: Compare the cost of your employer’s health insurance plan with the cost of Medicare. Medicare has monthly premiums, deductibles, and co-pays, but they may be less expensive than what you are currently paying through your employer.

  4. Benefits: Compare the benefits of your employer’s health insurance plan with Medicare. Medicare offers comprehensive coverage, including hospitalization, doctor visits, and prescription drug coverage. However, some employer plans may offer additional benefits, such as vision and dental coverage.

  5. Network: Check if your doctors and healthcare providers are in the network of your employer’s health insurance plan or Medicare. If you have established relationships with certain doctors, you may want to consider if they are in the network of the plan you choose.

In summary, it’s essential to weigh the pros and cons of both options to determine which one is the best fit for you. It may also be helpful to consult with a licensed insurance agent to discuss your options further.

How to review the costs of your Employer Coverage to Medicare

To compare the costs of your employer coverage with Medicare, conducting research can be helpful. Doing so can avoid late penalties for signing up for Medicare too late and determine your most cost-effective plan. You can use our Medicare plan finder to get an overview of different plans, their costs, and coverage and ensure you’re not paying too much for health insurance if you choose to keep your employer’s coverage. Additionally, one of our licensed insurance agents can assist you in determining the better option for your situation.

If you work for a large company with over 20 employees and have employer-sponsored group health insurance, you can combine Medicare with your employer’s coverage. Usually, your employer insurance will be primary, and Medicare will be secondary. Medicare Part A doesn’t have a premium if you’ve worked for at least ten years, and your out-of-pocket costs could be lower than your employer’s plan. Therefore, most people who are still working enroll in Medicare Part A.

However, you will likely have to pay a premium for Medicare Part B, so some people wait until they retire and their employer’s coverage ends to enroll in Part B. In this case, you’ll need a creditable coverage letter from your employer to avoid late penalties when you enroll in Part B or Part D.

One of the first things to check is how many employees your employer has.

Compare your Employer's Health Coverage to MedicareThis will determine whether you have to sign up when you turn 65 or if you can delay signing up.

The size of your employer is a crucial factor to consider. If your employer has 20 or more employees, they must offer you the option to continue your health insurance coverage through COBRA when you leave your job. COBRA allows you to keep your employer-based health insurance for up to 18 months after you leave your employment. However, COBRA can be expensive since you will be responsible for paying the entire premium, including the portion your employer previously paid.
 

Medicare rules for employers with more than 20 employees

A: If you work for a large company and your employer has Group Health Insurance.

You can combine Medicare with your employer’s insurance; Medicare can coordinate benefits with your employer’s coverage. In most cases, Medicare will be your secondary insurance, and your employer insurance will be your primary insurance. Your employer’s group plan will pay first, and Medicare will pay second. Remember that Medicare Part A doesn’t come with a premium if you worked for at least ten years and that your deductible or other costs could be lower. Because of this, most people who are still working will sign up for Medicare Part A

This is different for part B since you will most likely have to pay a premium for part B. For this reason, some people wait to sign up for part B until their employer’s group plan ends when they retire. If you choose to do this, you will receive a creditable cover letter that you must show when applying for Medicare Part B or D to avoid late penalties.

B: If you work for a large company and your employer has COBRA.

With COBRA, Medicare coordinates the opposite way; if you have COBRA coverage, Medicare pays first, and COBRA pays second. It is essential to review your employer’s coverage and compare it to Medicare to determine if you’re paying more than necessary. Also, once you turn 65, you must enroll in Medicare Parts A and B to avoid late enrollment penalties.

You can also drop your Employer’s Health Insurance and go on Medicare.

If you’re working for a large company, delaying enrollment in Medicare could cost you more in the long run. Sometimes, dropping your employer’s health insurance and enrolling in Medicare may be more cost-effective. Adding a Medigap policy to your Medicare coverage could also be a wise choice to lower your out-of-pocket costs for deductibles and co-pays.

Alternatively, a Medicare Advantage Plan is another option that combines Medicare Parts A, B, and D with extra benefits such as dental, hearing, and vision coverage. Many people are unaware that they could end up paying more for their health insurance through their employer than if they switched to Medicare with a Medigap or Advantage plan. Therefore, comparing each option’s costs and benefits is essential to determine the most cost-effective option.

Click here to go to our plan finder to find out what you would be paying for a Medicare plan with the same coverage as your Employer’s Health insurance plan.

Medicare rules for employers with less than 20 employees

If you work for a company with fewer than 20 employees, you must enroll in Medicare Parts A and B. While this may seem like an additional cost, Medicare is your primary insurance, and your employer’s group insurance is secondary. This means Medicare will pay first, and your employer’s insurance will pay second. In some situations, you might be able to delay your part D enrollment if your group insurance has RX benefits. Having group insurance through your employer might not be worth depending on your medical needs. Sometimes even having Medicare + Medigap insurance may be cheaper than your group insurance altogether.

Review plans to determine if staying with your Employers insurance is worth it or if a Medicare plan with Medigap or an Advantage plan would be cost-effective. Remember that Medicare also has monthly premiums, deductibles, and co-pays, but they may be less expensive than what you currently pay through your employer. It’s important to remember that the cost of health insurance can vary widely depending on factors such as your age, location, and health status. Another factor to consider is the benefits offered by each option. Medicare offers comprehensive coverage, including hospitalization, doctor visits, and prescription drug coverage. However, some employer plans may provide additional benefits, such as vision and dental coverage. Be sure to review each option’s benefits to determine which offers the coverage you need. Also, check if your doctors and healthcare providers are in the network of your employer’s health insurance plan or Medicare. If you have established relationships with certain doctors, you may want to consider if they are in the network of the plan you choose. It’s important to note that some Medicare plans, such as Medicare Advantage plans, may have more restrictive provider networks than employer-based plans.

Compare employment insurance to medicare What is a co-pay?
A co-pay is a dollar amount (fixed) paid by employees when they use medical services. This could be a doctor visit with a $45 co-pay or an ER visit with a $300 co-pay.

What is Coinsurance?
An employee pays Coinsurance for medical services after she’s met her deductible. This is a percentage of the total cost—for example, a $200 doctor visit with a 10% coinsurance. After the employee has met the deductible, the employee would have to pay $20, and the insurance company would have to pay the remaining $120.

A licensed Insurance Agent can walk through all of this and determine if you should stay with your current employer coverage or if switching to another plan would be more effective. Click here to schedule a meeting with one of our Licensed Insurance agents.

Do I have to sign up for Medicare if my spouse covers me?

It depends; the same rules apply if your spouse works for a company and gets health insurance benefits through their employer. You will need to enroll if your spouse works for a company with 20 or fewer employees. If your spouse works for a company with more than 20 employees, you may delay your enrollment if it makes sense to do so.
 
Click on the button below to go to our plan finder to determine what you would be paying for a Medicare plan with the same coverage as your or your spouse’s Employer’s Health insurance plan.
Go To Our Medicare Plan Finder

Is a Medicare Advantage or Medicare Supplement plan better for you?

Not sure which Medicare plan to pick? Both options have their advantages and disadvantages, so it’s essential to understand the differences and assess which plan aligns better with your healthcare needs and financial situation. We are here for you to try to make this process easier for you. This blog will explain the difference between a Medicare Advantage plan and a Medicare Supplement plan.

Medicare Overview Before diving into the comparison, let’s briefly review what Medicare is. Medicare is a health insurance program the federal government provides for people aged 65 or older, individuals with specific disabilities, and people of any age with End-Stage Renal Disease. Medicare is composed of four parts:

Original Medicare

  1. Part A (Hospital Insurance): Covers inpatient hospital care, skilled nursing facility care, hospice care, and some home healthcare services.
  2. Part B (Medical Insurance): Covers outpatient medical services, such as doctor visits, preventive services, and durable medical equipment.

Original Medicare (Part A & B) doesn’t cover the following: Long Term Care, most dental care, eye exams related to prescribing glasses, dentures, cosmetic surgery, acupuncture, hearing aids and exams for fitting them, and routine foot care.

Additional Plans

  1. Part D (Prescription Drug Coverage): Offers prescription drug coverage to help with medication costs.
  2. Part C (Medicare Advantage): Medicare Advantage plans are offered by private insurance companies and provide an alternative way to receive Medicare benefits, often including Parts A, B, and D, and sometimes additional benefits like dental and vision coverage.
  3. Medigap: pays for the gaps original Medicare doesn’t cover

You have two options to replace or enhance your Original Medicare Coverage.

  1. First, add a Medicare Supplement (or Medigap) insurance plan to your Original Medicare coverage.
  2. The second option is a Medicare Advantage plan, another way to get Original Medicare benefits.

These plans differ in costs, benefits, and how they work. In short: Medicare Supplement Insurance (Medigap) is a health insurance policy that can cover several healthcare expenses that Original Medicare doesn’t cover. A Medicare Advantage drug (MAPD, Part C) plan combines Parts A and B and can include Part D.

 
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Option 1. Medicare Supplement plan (Medigap)

Medicare Supplement Plan (Medigap): A Medicare Supplement plan, commonly called Medigap, is designed to fill the gaps in coverage left by Original Medicare (Parts A and B). Original Medicare typically covers about 80% of healthcare expenses, leaving beneficiaries responsible for the remaining 20%. Medigap plans help cover these out-of-pocket costs, such as deductibles, copayments, and coinsurance.

Key Features of a Medicare Supplement Plan:

  1. Standardized Plans: Medigap policies are standardized and labeled with letters (A, B, C, D, F, G, K, L, M, and N) in most states. Each lettered plan offers the same benefits, regardless of the insurance company selling it.

  2. Wide Choice of Providers: With a Medigap plan, you can visit any healthcare provider in the U.S. that accepts Medicare, giving you broader access to healthcare services.

  3. Separate Prescription Drug Coverage: Medigap plans do not include prescription drug coverage. You need to enroll in a separate Part D plan to obtain drug coverage.

  4. Guaranteed Issue Right: During your Medigap Open Enrollment Period (OEP), which starts on the first day of the month you turn 65 and lasts for six months, insurance companies cannot deny you coverage or charge higher premiums based on your health status.

  5. No Network Restrictions: Medigap plans do not have network restrictions, allowing you to seek care from any Medicare-approved provider nationwide. 

The Gaps Medicare Supplement Insurance (Medigap) can fill:

  • deductibles,
  • copays
  • coinsurance

Which Medicare Supplement Plan fits you best?

A Medicare supplement plan does not cover the following:

Prescription Drugs: Drug coverage will need to be bought separately through a Prescription Drug Plan, or other creditable coverage

Other things you should know about a Medicare Supplement Policy:

1. The supplement coverage covers one person; your spouse would have to buy a separate policy.
2. You can buy it from any private insurance company licensed in your state to sell.
3. The insurance company can’t cancel your policy if you pay the premium.
4. Supplement policies sold after January 1, 2006, aren’t allowed to include prescription drug coverage.
5. It’s illegal for anyone to sell you a Medicare Supplement policy if you have a Medicare Advantage Plan, except if you are switching back to Original Medicare.
6. Since January 2020, Medicare supplement plans sold to people new to Medicare can’t cover the Part B deductible anymore. If you qualified for Medicare before January 1, 2020, but are not yet enrolled, you might be able to purchase one of the Part B deductible plans (Plan C or F). Were you covered by Plan C or F (or the Plan F high deductible version) before January 1, 2020? Then you can keep your plan (medicare.gov). 

The insurance plans listed below are not part of a Medicare supplement plan:

  • Medicare Advantage Plans (such as HMO, PPO, or Private Fee-for-Service Plans)
  • Long-term care policies
  • Medicare Prescription Drug Plans
  • Medicaid
  • Employer or union plans
  • Tricare
  • Veterans’ benefits
  • Indian Health Service, Tribal + Urban Indian Health plans

When is the right time to purchase a Medigap policy?

Your Medicare Supplement Open Enrollment Period (OEP) is the best time to buy a Medigap policy. Most likely, you will get better prices and more choices among policies. OEP starts on the first day of the month, on which you are at least 65. You will have six months to buy a Medicare Supplement insurance plan. Another advantage of purchasing a Medigap during OEP is that you will get a guaranteed issue right. A guaranteed issue right means that companies can’t deny your Medicare Supplement insurance plan application because of pre-existing health conditions or disabilities.

It’s essential to understand your Medigap Open Enrollment Period, so check when your open enrollment period is.

Click here to schedule a virtual or in-person appointment if you have questions about your Medigap Enrollment. 

You can still apply after your open enrollment period,  but you could be rejected or charged more if you have health problems.

*Some states have additional Open Enrollment Periods, including those under 65 who qualify.

How can you review Medigap costs best?

Since each insurance company can set its prices, the cost of Medigap policies can vary widely. This means: that there can be significant differences in the premiums for the same coverage. As you shop for a Medigap policy, reviewing the same type and checking the pricing they have used is essential. Luckily you can review different Medicare insurance companies on our website, so you get competitive prices and never overpay for the same insurance.

What will be covered if you travel with a Medigap Policy?

Some Medigap policies offer emergency health care services for when you are outside of the U.S.

  • Standard Medigap Plans C, D, F, G, M, and N can cover foreign travel emergency healthcare when you travel outside the U.S.
  • Plans E, H, I, and J are no longer available. However, if you bought one before June 1, 2010, you might be able to keep it. These plans cover foreign travel and emergency health care when you travel outside the U.S.
  • Medigap Plan C, D, E, F, G, H, I, J, M, or N; Cover foreign travel emergency care in the first 60 days of your trip
  • Pays 80% of the billed charges for some medically necessary emergency care outside the U.S. after you meet the $250 deductible for the year.
    Medigap Foreign travel emergency coverage has a lifetime limit of $50,000.

What are the Medicare Supplement Insurance Pros & Cons?

PROS

  1. Medigap will help fill some gaps that Original Medicare doesn’t cover.
  2. You will have access to providers nationwide who accept Medicare.
  3. Most Medigap plans will help pay the Part A deductible.
  4. You can get a supplemental plan that covers Part A and Part B coinsurance.
  5. There are plans with no copayments.
  6. With Plan F, you don’t have to worry about out-of-pocket expenses.
  7. Standardized – 10 plans have the same coverage, no matter which company. 
  8. A Medicare Supplement company cannot cancel your policy for using the policy too much. Your policy will renew automatically every year.
    You can change your Medigap plan or company at any time you want.
  9. You have 30 days to drop the coverage and receive your premium back when your policy is approved.

Cons

  1. Medigap plans do not cover prescription drugs.
  2. If it is more expensive, your rate most likely increases
  3. You have to have Part A and Part B.
  4. Do not cover routine dental, vision, or hearing care.
  5. After your Guarantee issue ends, getting approved might be tricky if you have certain health conditions.

Option 2. Medicare Advantage Prescription Drug Plan

A Medicare Advantage plan, also known as Part C, is an alternative to Original Medicare that private insurance companies offer. These plans combine the benefits of Parts A and B, often include Part D prescription drug coverage, and may provide additional benefits like dental, vision, hearing, and fitness services.

Key Features of a Medicare Advantage Plan:

  1. Bundled Coverage: Medicare Advantage plans to consolidate Medicare Parts A, B, and D into a single plan, offering comprehensive coverage for medical services and prescription drugs.

  2. Additional Benefits: Some Medicare Advantage plans go beyond Original Medicare by offering other benefits, such as dental, vision, hearing, and gym memberships.

  3. Network-Based: Medicare Advantage plans typically have network restrictions, requiring beneficiaries to use specific providers or healthcare facilities to receive full coverage.

  4. Premiums and Cost-Sharing: Medicare Advantage plans may have lower monthly premiums than Medigap plans, but they often involve cost-sharing through copayments and coinsurance for medical services.

  5. Annual Changes: Medicare Advantage plans can change their benefits and cost structures yearly, so reviewing plan updates during the Annual Election Period (AEP) is essential.

An overview of the different types of Medicare Advantage plans

  • HMO (Health Maintenance Organization): 
  • PPO (Preferred Provider Organization) 
  • PFFS (Private Fee-for-Service)
  • SNP (Special Needs Plan) 
  • HMO-POS (Health Maintenance Organization Point-of-Service)
  • MSA (Medical Savings Account). 

When should you enroll in Medicare Advantage?

  • During your seven-month Initial Enrollment Period for Part D.
  • Annual Election Period (AEP): October 15 to December 7.
  • Special Election Period (SEP) during other times of the year so you can change your Medicare Advantage coverage.

Shop for Part C plans with Medicare’s plan finder tool on our website to review Part C plans available in your area.

What are the Medicare Advantage Insurance Pros & Cons?

PROS

  1. The out-of-pocket maximum is $7,550 a year (2020)
  2. Many plans cost low to no cost a month
  3. Can include drug coverage
  4. Many plans may consist of vision, hearing, and dental
  5. Gym discounts

CONS 

  1. You can only change your policy during Open Enrollment
  2. Smaller network, so there is no nationwide coverage
  3. Many plans require referrals to see a specialist
  4. Plans are not standardized 
  5. Medicare Advantage can change its benefits every year

3. Main Differences between Medicare Supplement (Medigap) and Medicare Advantage plan:

Comparison: Medicare Supplement vs. Medicare Advantage Plans Now that we’ve outlined the main features of each plan type, let’s compare the two:

  1. Coverage and Costs: Medicare Supplement plans offer standardized coverage that helps fill gaps in Original Medicare, providing predictable out-of-pocket costs. In contrast, Medicare Advantage plans bundle coverage and can vary significantly in costs and benefits from one plan to another.

  2. Provider Choice: Medigap plans allow beneficiaries to see any Medicare-approved provider nationwide without network restrictions, while Medicare Advantage plans often require using network providers for full coverage.

  3. Prescription Drug Coverage: Medicare Supplement plans do not include prescription drug coverage, so beneficiaries need to enroll in a separate Part D plan. Conversely, Medicare Advantage plans usually incorporate prescription drug coverage, streamlining the process.

  4. Additional Benefits: Medicare Advantage plans often offer extra benefits like dental, vision, hearing, and fitness services, which are not provided by Medigap plans.

  5. Cost Considerations: Medigap plans typically have higher monthly premiums but lower cost-sharing (e.g., copayments and coinsurance) than Medicare Advantage plans. Medicare Advantage plans may have lower premiums but involve higher cost-sharing for medical services.

  6. Open Enrollment Periods: Medigap plans have a one-time guaranteed issue right during the six-month Medigap Open Enrollment Period, which ensures acceptance regardless of pre-existing conditions. Medicare Advantage plans have specific enrollment periods, including the Annual Election Period (AEP), during which beneficiaries can change their coverage.

Which Plan is Better for You? 

The answer to whether a Medicare Supplement plan or a Medicare Advantage plan is better for you depends on your individual healthcare needs, preferences, and budget. Consider the following factors when making your decision:

  1. Desired Provider Flexibility: A Medicare Supplement plan might be more suitable if you prefer the freedom to see any Medicare-approved provider without network restrictions.

  2. Predictable Costs: A Medigap plan could be a better fit if you value predictability in your healthcare expenses and are willing to pay higher premiums for lower out-of-pocket costs.

  3. Additional Benefits: If you require other benefits like dental, vision, or hearing coverage, and you are comfortable with using network providers, a Medicare Advantage plan might be more attractive.

  4. Prescription Drug Coverage: If you already take prescription medications, a Medicare Advantage plan with integrated Part D coverage might simplify your healthcare needs.

  5. Budget Considerations: Evaluate your budget and compare the monthly premiums, copayments, coinsurance, and deductibles of both plan types to determine which aligns better with your financial situation.

  6. Health Status: Your health status and anticipated healthcare needs can influence your decision. The guaranteed issue right during the Medigap Open Enrollment Period might be crucial if you have pre-existing conditions.

A Medicare Supplement Insurance (Medigap) policy is health insurance that can help pay some healthcare costs that Original Medicare doesn’t cover. Medigap helps you pay for deductibles, coinsurance, and other out-of-pocket expenses. Medicare Advantage drug (MAPD, Part C) plan combines Parts A and B and can include Part D; coverage plans may include hearing, dental, vision, and many other services.

Choosing between a Medicare Supplement plan and a Medicare Advantage plan is a significant decision that can impact your healthcare coverage and costs. It’s essential to conduct thorough research, compare plans offered in your area, and consider your healthcare needs and preferences before selecting. Additionally, you may benefit from discussing your options with a licensed insurance agent specializing in Medicare to receive personalized guidance and recommendations. Remember that your healthcare needs may change over time, so it’s crucial to review your coverage regularly and make adjustments to ensure you have the most appropriate plan for your situation.

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Understanding the Different Parts of Medicare

 

 

If you’re approaching 65 or need to modify your Medicare plan, this blog is for you. We’ll discuss the four parts of the Medicare & Medicare supplement plan to help you understand your options better. You can find the Medicare Chart and Flowchart below. It’s crucial to have a clear understanding of the available Medicare options so that you can make an informed decision when selecting your coverage.

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What is Medicare?

Medicare is health insurance provided by the government for:

  1. People aged 65 and older: It helps cover medical expenses for seniors.
  2. People under 65 with disabilities: It assists those who are younger but have qualifying disabilities.
  3. People of any age with End-Stage Renal Disease (ESRD): It supports individuals with advanced kidney disease requiring dialysis or a transplant.

How does Medicare work?

Many people choose Original Medicare (Parts A and B), a traditional fee-for-service program. This means:

  • Coverage: The government pays for healthcare services directly.
  • Flexibility: You can go to any hospital in the USA that accepts Medicare.

Enrollment: If you’re already receiving Social Security benefits, you’ll be automatically enrolled in Medicare. For those not receiving Social Security, there’s a specific sign-up window:

  • Timing: You can enroll three months before turning 65, during the birth month, and three months after.
  • Importance of timely enrollment: Signing up during this window is crucial to avoid penalties for Parts B and D.

Penalties for Late Enrollment:

  1. Part B Late Enrollment Penalty:

    • Penalty: Your Part B premium may increase by 10% for every 12-month period you were eligible but didn’t enroll.
    • Importance of timely enrollment: Enrolling late may result in higher monthly premiums.

  2. Part D Late Enrollment Penalty:

    • Penalty: For each month you delay enrolling in Medicare Part D (prescription drug coverage), you’ll pay a 1% late enrollment penalty.
    • Importance of timely enrollment: Enrolling late may lead to increased costs for prescription drug coverage.

Key Takeaways:

  • Medicare is health insurance for seniors, individuals with disabilities, and those with End-Stage Renal Disease.
  • Original Medicare covers services provided by any hospital accepting Medicare.
  • Timely enrollment is crucial to avoid penalties for Parts B and D.
  • Social Security beneficiaries are automatically enrolled, but others must sign up during the designated window.
medicare chart
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There are two routes you can take to get Medicare coverage. First, there is Original Medicare, which includes Part A and Part B. The Medicare Advantage Plan (Part C) is the second route to get Medicare. There are also add-ons; some people need additional coverage, like Medicare drug coverage (Part D) or Medicare Supplement Insurance (Medigap).

Medicare parts overview

Medicare consists of four different parts; each Part of Medicare helps to cover specific services. Some are mandatory, and some are optional.




Four parts of Medicare coverage

Part A (Hospital Insurance)

  • Original Medicare: Gives coverage for inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care.
    • Inpatient care in hospitals
    • Skilled nursing facility care
    • Hospice care
    • Home health care
  • Enrollment:
    • Automatic enrollment for those applying for Medicare
  • Part A Deductible (2024): $ 1,632
  • When you apply for Medicare; you will be automatically enrolled,
  • It covers in-home hospice care, but does not cover a stay in a hospice facility.

    Fees
  • In 2024, the deductible is  $1,632 
  • A deductible applies if you’re hospitalized. If you stay longer than 60 days, you must pay a percentage of everyday expenses. You might need to pay a deductible each time if admitted to the hospital multiple times during the year. There is no copayment on days 0 to 60 of any inpatient stay. However, starting on day 61, you’ll have to pay $408 per day, and on day 91, you’ll pay $816 each day. This goes on until you hit your maximum lifetime of reserve days. You will get up to 60 of these days to use over your lifetime.
  • Coinsurance costs might apply.

Part B (Medical Insurance)

  • Coverage: Original Medicare; covers services from doctors and other healthcare providers.

    • Services from doctors and healthcare providers 
    • Includes: doctor’s visits, medical equipment, outpatient care, outpatient procedures, purchase of blood, mammograms, cardiac rehabilitation, and cancer treatment
  • Enrollment:
    • Monthly premium applies
    • Penalty for late enrollment without creditable coverage
  • If you already have “creditable coverage” from another source, You’re not required to enroll in Part B. This creditable coverage could be through your employer or spouse’s employer.)
  • You will have to pay the penalty if you enroll too late and don’t have creditable coverage (exceptions apply). 

    Fees
  • Part B has a monthly premium. Some also pay a premium for Part A. The monthly cost in 2024 is $174.70
  • You might have to pay an added surcharge if you have a higher income.
  • There is also a Deductible. You’ll pay $240 for the year 2024.
  • Most likely have to pay for 20% of the Medicare-approved cost of all covered services.
  • If you are already getting Social Security, it might be deducted from your monthly payment.

How can you sign up for Original Medicare?

  • You can sign up by visiting a Social Security office in your county, enrolling online by clicking here, or calling Social Security at 800-772-1213.

Does Original Medicare cover Long-term care?

Medicare doesn’t cover long-term care; 67% of people over 65 will need longer-term care at some point in their life. It would be best if you had a long-term care insurance policy to cover these costs. Medicare will only cover the fees for acute-care hospital services (patients transferred from intensive care or critical care unit). Click here to schedule a meeting with a licensed insurance agent to discuss your long-term care options.  

Part D (Prescription drug coverage)

  • Coverage:
    • It helps cover the cost of prescription drugs  (including many recommended shots or vaccines).
  • Part D is optional and is usually included in any Medicare Advantage plan.
  • These are stand-alone plans that only cover your medications. 
    You can join a Prescription drug coverage plan in addition to your Original Medicare. Or you can join a Medicare Advantage Plan with drug coverage.
  • If you have prescriptions or need a prescription later on and don’t have creditable coverage, this plan will be an excellent addition to your original Medicare; however, if you end up going without creditable drug coverage for 63+ days in a row after you’re first eligible. Then you most likely have to pay a late-enrollment fee if you enroll in a Medicare Prescription Drug Plan or Medicare Advantage Prescription Drug plan later.
  • Private insurance companies offer this plan. 


Fees

  • Depending on your specific plan, there may be a yearly deductible before your plan starts covering the eligible drug costs. Part D plans could also have a co-pay.
  • Medicare prescription drug plans do have a coverage gap. You could see this as a temporary limit on what the drug plan will cover until a certain amount has been reached.
  • Many states have insurance options to close the coverage gap, but these may require paying an additional premium.

Enroll:

  • During your seven-month Initial Enrollment Period for Part D.
  • Annual Election Period (AEP) every year from October 15 to December 7.


Shop for Part D plans with Medicare’s plan finder tool on our website to review Part D plans available in your area

Part C Medicare Advantage “bundled” plans include Part A, Part B, and usually Part D

In short
  • Coverage:
    • Bundled plan including Parts A, B, and usually D
    • Extra benefits like vision, dental, and fitness
  • Enrollment:
    • Offered by private insurance companies
    • Additional premiums may apply
  • This plan offers lower out-of-pocket costs and extra benefits such as vision care services.

  • Offered through private insurance companies
  • Provides Part A and Part B services covered by Original Medicare.  Part C is required to cover every service that the original Medicare does.
  • It may cover extra benefits such as; coverage for prescription drugs, Routine dental care including cleanings, x-rays, and dentures, Routine vision care including contacts and eyeglasses, Routine hearing care including hearing aids, Fitness benefits including exercise classes, and more.
  • With these all-inclusive Medicare Advantage plans, you will cover all your health services in a single plan.

Fees 

  • You still have to pay for your Part B and Part A premiums if you have one.
  • Some advantage plans have lower out-of-pocket costs than Original Medicare.
  • Possibly you will have some network restrictions.
    Your total costs for the Part C Advantage plan will depend on your chosen plan (compare different plans and carriers.
  • Medicare puts an out-of-pocket maximum for all Medicare Advantage part C plans; this was $7,550 in 2021

Shop for Part C plans with Medicare’s plan finder tool on our website to review Part C plans available in your area.

Medicare Supplement Insurance (Medigap):

In short
  • Coverage:
    • Fills gaps in Original Medicare coverage
  • Enrollment:
    • Can only be added to Original Medicare (Parts A and B)
    • Enroll during the six-month open enrollment period for guaranteed acceptance:
      • Your Medicare Supplement Open Enrollment Period (OEP) starts on the first day of the month you are at least 65, and you first have Medicare Part A and B.
      • You have six months to buy a Medicare Supplement insurance plan, and you will have a guaranteed issue right? Companies cannot reject your application for a Medicare Supplement insurance plan based on pre-existing health conditions or disabilities.
      • If you wait until after your open enrollment period, you can still apply anytime, but a plan could reject you or charge you more if you have any health problems.

Medicare Supplement Insurance, also called Medigap, will help fill some gaps that Original Medicare didn’t cover. You can get additional insurance from a private company, which helps pay your share of (out-of-pocket) costs in Original Medicare. Original Medicare generally covers 80% of your hospital and medical expenses. This will help pay your out-of-pocket costs in Original Medicare (like your 20% coinsurance, you have 
A percentage of the price you pay. In Part B, you generally pay 20% of the cost for each Medicare-covered service.

  • There are ten standardized Medigap plans to choose from.
    Medigap policies are standardized and are named by letters, A, B, C, D, F, G, K, L, M, and N in most states.
  • Each lettered plan’s benefits are the same, regardless of which insurance company sells them.
  • You can review different insurance companies on our website to get the best price and never overpay for the same insurance.
  • Only add a Medicare Supplement insurance plan if you have an original Medicare Part A and Part B plan.
  • Combining a Medicare Supplement Insurance plan with a Medicare Advantage plan is impossible.

Summary of Medicare coverage:

overview medicare

Understanding your Medicare coverage choices is essential, and picking your coverage carefully. How you choose your benefits and who you get them from can affect your out-of-pocket costs and where you can get your care.

Important dates for Medicare enrollment:

Enrollment Information:

 

Original Medicare:

 

  • Visit a Social Security office, enroll online, or call Social Security.

  • Part D (Prescription Drug Coverage):

  • Initial Enrollment Period for Part D
  • Annual Election Period (AEP) from October 15 to December 7

  • Medicare Advantage (Part C):

  • Initial Enrollment Period for Part D
  • Annual Election Period (AEP) from October 15 to December 7

  • Medicare Supplement Plan (Medigap):

  • Open Enrollment Period (OEP) starts when you’re 65 and have Part A and B
  • Six-month window for guaranteed acceptance
  • Enrollment Periods
  • General enrollment period (January 1–March 31). You could enroll in Medicare during this period if you didn’t enroll during your initial enrollment period.
  • Medicare Advantage open enrollment (January 1–March 31). You can switch from one Medicare Advantage plan to another during this frame or return to the original Medicare. You can’t enroll in a Medicare Advantage plan if you already have Original Medicare.
  • Part D enrollment/Medicare add-ons (April 1–June 30). If you don’t have Medicare Part A but are enrolled in Part B during the general enrollment period, you can sign up for a Part D prescription drug plan.
  • Annual Enrollment Period (October 15 – December 7). You can switch from original Medicare (parts A and B) to Part C (Medicare Advantage) or from Part C back to original Medicare. You can also switch Part C plans or add, remove, or change a Part D plan.
  • Special enrollment period. If you delayed Medicare enrollment for an eligible reason, you could later enroll during a special enrollment period. You have eight months from the end of your coverage or employment to sign up without penalty.