Medicare is quite a confusing ordeal. I find it interesting that something so important is so convoluted. When meeting with Medicare-eligible individuals we must discuss Parts A, B, C, D and then the difference between a Medicare Advantage plan vs a Medicare Supplement plan. Oh, and those supplement plans are labeled as Plans A through N. I am sure you can see how confusing this could be for someone, especially if they don’t have a knowledgeable agent to help them. Come with me on a quick tour of the world of Medicare. This makes me feel a tad like Willy Wonka…
Who is eligible For Medicare?
Anyone aged 65 and older, younger people with disabilities, and people with End Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis, commonly known as Lou Gehrig’s Disease (ALS) are all eligible for Medicare.
When am I eligible for Medicare?
Most individuals are eligible to sign up for Medicare 3 months before the month in which they turn 65 years old. Those individuals eligible for Social Security Disability Insurance (SSDI) benefits are also eligible for Medicare after a 24-month qualifying period. If you have been diagnosed with Amyotrophic Lateral Sclerosis (ALS) you are eligible for automatic enrollment into Medicare the first month you receive Social Security Disability Insurance (SSDI) as the standard 24-month waiting period is waived. Eligibility for individuals with End Stage Renal Disease (ESRD) works differently than other types of Medicare eligibility. If you’re eligible for Medicare based on ESRD and don’t sign up right away, your coverage could start up to 12 months before the month you apply.
What does Original Medicare consist of?
Original Medicare consists of Part A and Part B. Part A covers hospital coverage such as inpatient care, skilled nursing facility care, hospice care, and home health care. Part B covers outpatient coverage such as services from doctors and other health care providers, outpatient healthcare facilities, home health care, durable medical equipment (DME), and many preventive health services. Part D is also considered a part of Original Medicare but it is not direct from the government and is instead privatized through insurance carriers.
Wait, what are Parts C & D?
Part C is something called a Medicare Advantage plan which is private insurance through a private health insurance carrier and includes all items covered under Parts A, B, and usually Part D. Many times, these plans cover extra benefits that Original Medicare does not such as gym memberships, dental, and vision. Part D plans help cover prescription drugs including many recommended shots and vaccines.
So, if Part C is a Medicare Advantage Plan, then what’s a Medicare Supplement?
A Medicare Supplement is a private plan that helps supplement the gaps in Original Medicare. This type of plan is sometimes called a Medigap policy. Some of the “gaps” in Original Medicare are copays, coinsurances, and deductibles. Currently in 2022 Part A has a deductible of $1,556 and an inpatient coinsurance of $0 for up to 60 days but then an insured would pay $194.50 for days 61 through 90. Thereafter for days 91+ the insured would pay $778 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime.) Part B in 2022 has a deductible of $233 and a 20% coinsurance. These Medigap policies help you cover some or all of these associated costs depending on which Plan you choose. As mentioned before, there are Plans A through N which offer varying levels of coverage.
How much does all this cost?
Each piece is going to cost a little differently depending on your circumstances and the plans you choose. Most people will not pay a premium for Part A. It is sometimes called “premium-free Part A” as many working people have already contributed to the system. If you have worked 40+ quarters and paid taxes during those quarters, then you qualify for “premium-free Part A.”
If you worked 30-39 quarters during your lifetime, then the standard 2022 Part A premium is $274 per month. Those who worked less than 30 quarters will pay the standard 2022 premium of $499 per month.
The Part B standard premium in 2022 is $170.10 per month but can go up based on your income. The income determination will be based on your income tax filing 2 years prior and will automatically be readjusted each year. If you file jointly then your premium is based on your joint filing and if you file single then only your income is considered. The standard Part B premium will apply to a single tax filer who made $91,000 or less and a joint filer who made $182,000 or less 2 years ago. If you filed above these amounts then your premium will go up incrementally.
Part C premiums are based on the plan you choose. These can vary from $0 per month up to $100 sometimes. It is very important to note that at all times you must have Parts A & B in place to enroll in a Part C plan. This means you will be responsible for the costs of all together.
Part D premiums also vary by plan and can cost anywhere from $15 per month up to $100 per month depending on the type of coverage you need. It is also important to remember the income guidelines for Part B as there is also an increase to your Part D premiums if you make over the $91,000/$182,000 threshold. If your income was under these amounts, then you only pay your premiums but if above then we will pay more based on which level of income applies.
Supplemental Insurance policies/Medigaps will also vary. These premiums will be based on your age, geographic location, and sometimes if you are not in an enrollment period, will be based on your health. These plans can be more expensive than Part C plans. You must also be enrolled in Parts A and B to qualify. Medicare supplements do not include drug coverage so you will need to enroll in a Part D plan if you wish to cover medications
How do I know if I am choosing the right plan for me or my loved one?
As you can see, Medicare can confuse the best of us, but it can be even more difficult when we are bombarded with options. We often see the commercials on TV touting to have the best this and that, showing famous people like Jimmie “JJ” Walker telling you their plan is “Dynomite” and then receiving tons of mail when you are getting close to 65. Some of the most important pieces of advice we give at BMB is to ignore advertisements, in every form. Every inim chdividual is different and so is the size of their budget. There are special plans for those with certain chronic diseases, some plans cover certain prescriptions that others don’t, or they cover them unless out of pocket, some plans are better for those people who travel, etc. This means it is best to ignore outside influences and figure out what best fits you.
Need to get signed up or need to help a family member?
Every Medicare-eligible person is different and sometimes going on Medicare isn’t even your best option at this point in your life. Let us help you navigate the crazy world of Medicare. We especially recommend you review your options annually during the Annual Enrollment Period (AEP) which runs from October 15-December 7th. Please contact us at BMB today to schedule an in-person, web, or phone appointment today. You can call 985-649-0350 or send Kristel a message by filling out the form on our contact page.