A Deep Dive Into Medicare

What is Medicare?

Medicare is a government program that helps people 65 and older, and those with disabilities pay for their healthcare costs. The U.S. Federal Government funds Medicare health insurance, and the Centers for Medicare & Medicaid Services (CMS) administer it.

There are four main parts to Medicare: Part A, B, C, and D. Each piece covers different healthcare expenses.

Additionally, retirees can purchase Medicare supplemental policies called Medigap to pay for original Medicare’s out-of-pocket costs and additional services Medicare doesn’t cover.

Am I Eligible?

There are two ways an individual can qualify for Medicare:

1. Age – You’re 65 or older.
2. Disability – You’ve received disability benefits for 24 months, or you’ve been diagnosed with either end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS).

How do I Enroll?

If you have been receiving Social Security or Railroad Retirement payments for at least four months, you will automatically enroll in Parts A and B, with coverage beginning the month you turn 65.

If your birthday is the first of the month, coverage will start at the beginning of the previous month. Social Security beneficiaries usually receive their Medicare cards three months before their 65^th birthday, and Medicare Part B premiums are automatically withheld from your Social Security payments.

Still, you’ll need to actively enroll if you want prescription drug coverage, a Medicare supplemental policy, or a Medicare Advantage plan. Employees who haven’t signed up for Social Security will need to enroll in Medicare and pay the premiums out-of-pocket to receive coverage.

You’ll need to enroll yourself unless you fall into one of the following three groups:

1. You’ve been collecting Social Security disability benefits for 24 months.
2. You have ALS (Lou Gehrig’s disease) or ESRD (end-stage renal disease).
3. You’re already receiving Social Security benefits before age 65.

You can enroll online at ssa.gov, by phone at 1-800-772-1213, or your local Social Security office.

As a part of your enrollment process, you may choose not to participate in Medicare Part B insurance. So, if you’re still working or are covered under another plan, Part B is likely unnecessary.

But it’s worth noting; your Part B premium may be higher if you don’t sign up for it when you first become eligible.

If you opt-out of Part B, your premium will increase by 10 percent every year you could’ve had Part B. There are some exceptions to this penalty, which include:

• If you have coverage through another group health plan when you turn 65
• If you sign up for Part B within eight months of losing group health coverage

Those who decline Part B, to begin with, and don’t enroll within eight months after their health coverage ends, can only enroll during Medicare’s General Enrollment Period: January 1 to March 31 of each year. Your coverage will then begin July 1 of the year you enroll.

What Are the Different Parts of Medicare?

As previously discussed, there are five parts of Medicare. Each part covers a different aspect of healthcare. These Parts are as follows:

1. Part A – Hospital Coverage

Part A covers you if you become an inpatient in a hospital or skilled nursing facility. This insurance also covers hospice and some healthcare services.

It’s vital to note while most people don’t pay a premium for Part A coverage, it isn’t totally free. There’s a deductible for every time you’re admitted to a hospital, which was $1,364 for 2019.

But you can purchase supplemental coverage, Medigap, to cover that deductible and some out-of-pocket costs for other parts of Medicare.

So, if you haven’t worked long enough to qualify for Medicare, you may be able to buy into the program by paying a Part A premium.

2. Part B – Doctors and Outpatient Services

Part B covers more regular healthcare costs, such as doctor office visits, lab work, durable medical equipment (such as medical braces or wheelchairs), diagnostic screenings, and other outpatient services.

It’s worth noting; Part B coverage involves more costs than Part A.

The federal government sets the monthly Part B premium, which is $135.50 for 2019. It may be higher if your income is greater than $85,000. Under Part B, you’re also subject to an annual deductible, which is set at $185 for 2019.

Plus, you’ll have to pay 20 percent of your bills for doctor visits and other outpatient services. Additionally, you can deduct this monthly premium from your monthly benefit if you’re collecting Social Security.

3. Part C – Medicare Advantage

Part C, also known as Medicare Advantage, is the coverage you can choose in place of Parts A and B. This plan includes everything Parts A and B cover in a single policy.

Many Part C plans also offer prescription drug coverage and such services like dental, vision, and hearing care.

In recent years the CMS has also allowed these plans to cover extras such as wheelchair ramps, shower grips, meal delivery, and transportation to and from a doctor’s office.

But not all Medicare Advantage plans include the same extra benefits, so make sure you read plan descriptions carefully. Read more about Advantage plans, below.

4. Part D – Prescription Drugs

Part D plans are stand-alone prescription drug plans designed for an individual to pair with Original Medicare (Parts A and B).

These plans also cover medications you take at home, while Parts A and B typically pay for prescriptions you receive at the hospital or in a doctor’s office, respectively. Read more about Part D, below.

5. Supplement (Medigap)

Medicare supplement, also known as Medigap, plans help cover the costs not paid for by Parts A and B, such as deductibles and co-payments.

You must have Original Medicare, not Medicare Advantage, to enroll in a Medigap plan.

What is Medicare Advantage?

As previously stated, Medicare Part C, or Medicare Advantage, covers hospitalization, outpatient care, and, often, prescription drugs.

Most Advantage plans also include extra services original Medicare doesn’t cover, such as dental and vision care.

It’s important to note that a majority of Advantage plans require you to receive your care from a physician in the plan’s network unless it’s an emergency.

Unlike Original Medicare, under Medicare Advantage, you can’t go to any provider that accepts Medicare. It’s also important to know if you’re in an Advantage Plan, you cannot also have a Medigap policy.

And, once you join a plan, you typically lock into that plan for the calendar year.

What is Medigap Insurance?

Private insurance companies sell Medigap supplemental plans to seniors who have Original Medicare. These policies help individuals pay for services regular Medicare alone doesn’t cover, such as deductibles and co-insurance. If you want to purchase a Medigap plan, you should do so within six months of electing Medicare Part B coverage.

Otherwise, if you try to buy a Medigap plan after this six-month enrollment period, you aren’t guaranteed coverage. But, during this six-month period, insurers:

• Cannot deny you coverage
• Can’t delay the start of coverage
• Can’t charge you more based on a pre-existing health problem

What’s Different About Part D?

As mentioned above, Medicare Part D is unlike the other parts because it is designed to cover both brand name and generic prescription medications specifically.

Medicare Part D is designed to cover both brand name and prescription medications specifically.

You must enroll in regular Medicare (Parts A and/or B) to enroll in a Part D plan. Also, like Medicare Advantage, you must purchase a Part D policy through a private insurer.

What and how much your Part D policy covers varies from plan to plan. But the amount you are charged for prescription drugs is currently limited by federal law.

Double-check whether you’re already covered for prescription drugs under a Medicare Advantage plan before you enroll in a Part D plan.

If you don’t need Part D coverage now, you’re always able to add or change your coverage during a designated enrollment period.

Should I Enroll at 65 if I’m Still Working/Covered?

Everyone, even if you’re covered by another plan, should consider enrolling in Medicare Part A when they turn 65.

As previously stated, Part A is generally premium-free and may cover some expenses not included as a part of your employer’s health plan.

On the other hand, you may want to delay your enrollment in Part B if you’re still working and covered under another health plan.

Because Part B premiums are higher if you make more income, it may be wise to delay your enrollment until after you retire.

You can enroll in Part B without penalty, anytime during the eight months after you stop working or your employee health coverage ends.

But keep in mind if you miss that window, you may be subject to penalties that could last as long as you remain covered.

What’s the Difference Between Medicare and Medicaid?

The two most significant differences between Medicare and Medicaid are age and income-based. Medicare is available for those 65 or older, or those with specific medical disabilities or diseases.

This program is designed to cover a qualified individual and not an entire family. Eligibility for Medicaid, on the other hand, is based on income rather than just age or disability.

Also different, Medicaid was developed to assist individuals AND families with limited financial resources to obtain healthcare.

Additionally, you can apply for Medicaid whenever necessary rather than waiting for an open enrollment period. Generally, most people who qualify for Medicaid are exempt from the individual penalty.

Important Notes

There are a couple of important points to note about Medicaid. The first point is that Medicaid is a federal-state program so coverage will vary from state to state.

The second point is that it’s possible for a person to have both Medicare and Medicaid. If you have both types of coverage, Medicare will pay first.

To enroll in both Medicare and Medicaid, you must be “dual eligible.” To become dual eligible, you must meet the federal qualifications for Medicare and the state-specific requirements for Medicaid.

There several levels of assistance you can receive as a dual eligible beneficiary. “Full-dual eligible,” individuals are enrolled in Medicare and receive full Medicaid benefits.

“Partial dual eligible,” individuals receive assistance from Medicaid to pay for Medicare premiums or cost-sharing.

What are the 2019 – 2020 Enrollment Dates?

What are the Projected Costs for 2020?

The Part B deductible in 2020 will increase to $197, up from $185 in 2019. This amount is automatically deducted from your monthly check if you’re already collecting Social Security or Railroad Retirement Benefits.

The Part A deductible will grow in 2020. The new deductible will increase to $1,420, up from $1,364 in 2019. Still, keep in mind your Part A premium is free for most people.

What is Medicare Easy Pay?

Medicare Easy Pay is a free, electronic payment option that lets you automatically deduct premium payments automatically from a savings or checking account each month.

Anyone who receives a bill for their Medicare premiums from the CMS can sign up for Easy Pay at any time. You can sign up for Easy Pay by mailing a completed Authorization Agreement for Pre-authorized Payments Form.

Once you enroll in Easy Pay, it can take 6-8 weeks to process your form. After your form is processed, two things will happen each month:

1. You’ll get a Medicare Premium Bill stating, “This is not a bill,” letting you know the premium will be deducted from your bank account.
2. Medicare will deduct your premium from your bank account, usually on the 20^th of the month. This deduction will appear on your bank statement as an “Automated Clearing House (ACH)” transaction.

Does Medicare Cover Dental Care?

Original Medicare covers limited dental care. It doesn’t cover most dental care or supplies, such as:

• Dental exams
• Teeth cleanings
• Fillings
• Tooth extractions
• Dentures
• Dental plates

Part A will usually provide some coverage if you receive any dental services in a hospital as an inpatient.

Part A can pay for inpatient hospital care if you need to have an emergency or complicated dental procedure, even though the dental care isn’t covered.

Does Medicare Cover Vision Care?

Original Medicare also covers limited vision care. It doesn’t cover routine eye exams for contact lenses or glasses.

But Part B will cover some preventive or diagnostic eye exams including, glaucoma tests, eye tests for diabetic retinopathy, and eye tests for macular degeneration.

Additionally, Medicare will typically cover cataract surgery if it’s performed with traditional surgical techniques or with lasers.

Following the procedure, Part B will typically provide some coverage for corrective lenses.

The coverage for corrective lenses under these circumstances is limited to one pair of eyeglasses with standard frames or one set of contact lenses.

Medicare also covers eye prostheses for patients with an absence or shrinkage of an eye due to a congenital disability, trauma, or surgical removal. Coverage includes policing and replacements every five years.

What if you Want Increased Dental or Vision Coverage?

Certain Medicare Advantage plans may include either or both dental and vision coverage. An Advantage policy with dental coverage may offer benefits that can include:

• Routine dental exams
• Dental X-rays
• Routine teeth cleanings
• Fillings
• Tooth extractions
• Root canals
• Gum disease treatment
• Dentures
• Dental implants
• Bridges
• Crowns

The specific coverage offered by your plan will vary and may not include all the items listed above. So, check with your plan carrier to learn more about the terms of your Medicare Advantage plan dental coverage.

As with dental coverage, your Medicare Advantage policy may cover certain routine vision services. An Advantage plan with vision benefits may include:

• Routine eye exams
• Preventive exams
• Eyeglasses and contact lenses
• Upgraded frames

Some Advantage plans may even offer coverage for specific retailers, such as Warby Parker. Check with your plan carrier to learn more about the terms of your Medicare Advantage plan vision coverage.

How Do You Replace Your Medicare Card?

If your Medicare card is lost, stolen, or damaged, you can request a replacement card through the Social Security Administration in the following ways:

• Online at www.ssa.gov
• By phone at 1-800-772-1213 (TTY users, dial 1-800-325-0778), Monday through Friday, from 7AM to 7PM
• In-person at your local Social Security office

Your new card will be mailed to the address that Social Security has on file for you within 30 days.

But if you’ve moved and not reported this change, you’ll need to report this address change before they can process your request for a replacement card.

If you need proof of your Medicare coverage sooner than 30 days, you can also request a letter to use as temporary proof. This letter is typically mailed in about ten days.

If you need proof immediately, visit your nearest Social Security office.

You’ll need to request a replacement card through the Railroad Retirement Board (RRB) if that’s who you signed up for Medicare through. You can request a replacement by:

• Visiting www.rrb.gov
• Call 1-877-772-5722 (TTY users dial 1-312-751-4701), Monday through Friday, from 9 AM to 3:30 PM
• Contact your local Railroad Retirement Board office