What to Expect When You First Start Medicare
Finding the best fit for Florida Medicare insurance products can be challenging and confusing. You want to make the right decision, but you don't want to pay more than necessary. In this current economy you have to save money wherever possible, and one of those places is insurance.
You may have a memory of your parents talking about their Medicare supplement insurance. You probably have a few friends that are on Medicare now and have talked about what insurance plan they chose. Now it's your turn to go through the process and it's a decision you don't want to guess on. Education is the best way to approach the buying process regarding the Medicare supplement insurance market. With a little research, time and the assistance of an independent Medicare Supplement Agent, you can discover and learn the basics of Medicare and the insurance products related to Medicare. Once you understand the fundamentals, you can make a well informed educated decision and feel great about getting the best product for the best price.
There are four key "parts" to Medicare: Part A, Part B, Part C, and Part D.
- Part A - This part of Medicare covers hospitalization. You become eligible for Medicare Part A on your 65th birth month. You cannot defer Part A even if you are working. As long as you or your spouse worked at least 10 years in the United States, you are eligible for Part A. There is no premium for Part A.
- Part B - This part of Medicare covers all physician charges and all outpatient charges. Basically Part B covers any charge that is not considered hospitalization. In 2016 the premium for Part B is $121.80 per month. If you are drawing your social security check now, this amount will be deducted from that check. If you are not drawing social security yet, the cost will be billed to you quarterly. You also have the option of setting up a monthly bank draft directly with Medicare on their website. You become eligible for Part B on your 65th birth month, but can defer Part B if you are working and have creditable coverage, and can later enroll in Part B when you have retired. You will not pay any penalty as long as your prior coverage was credible.
- Part C - This part of Medicare was put into law in 2005 and is the considered the privatization of Medicare. Part C is also referred to as Medicare Advantage, which is a private Medicare type plan. When you select a Medicare Advantage plan, you are no longer covered by Medicare Part A and Part B, but by a private insurance company. Medicare Advantage plans can have drug coverage rolled into the plan, and most often do. These plans are not a Medicare supplement, but are a stand-alone plan. If you are interested in a Medicare Advantage plan, do your due diligence and research and make sure you have checked that your doctors will accept the plan you are considering. These plans can also be very confusing...since they have specific timetables to apply and dis-enroll. They also have limited networks that can change at any time and without warning.
- Part D - This part of Medicare refers to the prescription drug coverage. When looking for a Medicare drug plan, you should visit www.medicare.gov and utilize their prescription drug calculator. This tool is quite accurate and will help you find the drug plan that best suits you. However, this online drug research tool can be difficult to navigate. With the assistance of an independent Medicare Supplement Agent, you can obtain objective advice and input. There is no financial incentive for an independent agent to steer you one way or the other since all Part D drug plan commissions are standardized and have no impact whatsoever on your monthly premium cost.
When Can You Sign Up for Medicare Part A & B?
When you're first eligible for Medicare, usually at age 65, you have a 7-month Initial Enrollment period to sign up for Part A and/or Part B. For example, if you're eligible when you turn 65, you can sign up during the 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.
If you didn't sign up for Part A and/or Part B (for which you must pay premiums) when you were first eligible, and you aren’t eligible for a Special Enrollment Period (see below), you can sign up during the General Enrollment Period between January 1–March 31 each year. Your coverage will start July 1. You may have to pay a higher premium for late enrollment in Part B.
To sign up for Part B, complete an Application for Enrollment in Part B (CMS-40B). This can also be easily done online at HYPERLINK "http://www.mediare.gov" www.mediare.gov If you don't have Medicare or you want to sign up for Part A (some people have to pay a premium for Part A), contact Social Security.
Special Enrollment Periods: Once your Initial Enrollment Period ends, you may have the chance to sign up for Medicare during a Special Enrollment Period. If you're covered under a group health plan based on current employment, you have a Special Enrollment Period to sign up for Part A and/or Part B any time as long as you or your spouse (or family member if you're disabled) is working, and you're covered by a group health plan through the employer.
You also have an 8-month Special Enrollment Period to sign up for Part A and/or Part B that starts the month after the employment ends. Usually, you don't pay a late enrollment penalty if you sign up during a Special Enrollment Period.
- How you qualify for Medicare - Medicare is something that many older Americans take for granted, but you actually have to qualify to receive it. Fortunately, the burden isn't too difficult for most people to meet. As long as you have worked long enough to collect 40 credits or an equivalent of a 10-year career, then you qualify for Medicare. In addition, if you're married to someone who has qualified, then you can qualify on your spouse's work history even if you wouldn't qualify on your own.
Those who haven't collected enough credits can still participate in the program, but they have to pay for certain portions of medicare that others get for free. The most important example is Part A hospital insurance, which is included free of charge for most participants but for which those who don't have enough credits, they’ll have to pay monthly premiums.
- You can get penalized for not participating in Medicare when you qualify - Many people have argued and complained against provisions of the Affordable Care Act that require you to have healthcare coverage or else pay a mandate or penalty. Yet similar provisions in Medicare have existed for a long time (since the mid-sixties).
For example: who don't enroll in Medicare when they’re first eligible, generally have to pay higher premiums once they do join, unless they have another qualified plan. For Part B medical coverage, your monthly premiums will rise 10% for every 12 months that you could have been on Medicare but chose not to be. If you have credible coverage from an employer, this issue would not occur. In addition, a similar late-enrollment penalty for the Part D prescription drug coverage would take the number of months you weren't covered and multiply it by a factor based on the national average base premium. The result increases your monthly Part D cost.
- You can switch your coverage options every year - Most people choose a Medicare option, such as a medicare supplement or medicare advantage plan and stick with it for most of their lives. But every year during certain periods (called: annual enrollment periods), you have the right to make changes to your coverage without any medical underwriting.
Various time periods cover different moves. For example, if you want to switch from traditional Medicare to a Medicare Advantage Plan, you can do so from October 15 to December 7. It would always result with a January 1st effective date. You can also switch among different Medicare Advantage Plans during the same period. A different date range from January 1 to February 14 (called the annual disenrollment period) allows you to switch back from Medicare Advantage to original Medicare. To do this, it is highly recommended that you consult with an independent Medicare Supplement agent. Just calling the insurance company and expecting it to change over easily is often complicated.
Looking at different coverage options can let you adapt to your changing health. Early in retirement, it might be less costly to go with a less comprehensive option, then switching to a more complete package when your healthcare needs increase. However, an educated and experienced medicare supplement agent can point out the advantages and disadvantages to waiting. There are more pieces to the puzzle than meets the eye. You cannot just jump onto a medicare supplement plan any time you want. There may be underwriting.
- Not every doctor accepts Medicare - Medicare has historically been very flexible for patients, as you can generally see any doctor you wish as long as they are contracted with Medicare. However, medical professionals aren't required to accept Medicare patients.
To find out whether your doctor takes Medicare, you can do several things. The Medicare website at www.medicare.gov has information about professionals who accept patients under the program. If you have a Medicare Advantage Plan, you can contact the plan provider directly for information on coverage. Contacting your chosen medical professional directly should get you the answers you need but depending on who you are speaking with at the provider’s office, you may get conflicting information. An Independent Medigap agent can also help by doing the necessary research for you and help you decide on the most appropriate step forward.
Guaranteed Issue Medicare Periods
During a guaranteed-issue periods, the insurance company must offer you a Medigap Insurance policy at the best price (street price) for your age, without a waiting period or medical underwriting.
You can usually apply for a guaranteed-issued Medigap plan as early as 60 days before your current benefits end to avoid a gap in coverage. You must also apply for one of these plans no later than 63 days after your coverage ends as a result of one of the events described below. When you submit your application, you are usually required to provide evidence of the date your coverage ends or ended. All covered applicants should appear on that letter of credible coverage that the insurance company issues to you.
You have the right to purchase Medigap plans following the 7 events listed below, which apply to Medicare beneficiaries of all ages.
- Termination of an Employer-Sponsored Retiree Plan - You have the right to purchase a Medigap Insurance plan when your employer-sponsored health insurance plan (including Cobra coverage) that is supplementing Medicare, terminates.
- Reduction of Employer-Sponsored Retiree Benefits or Loss of Eligibility - You have the right to purchase a Medigap plan if your employer-sponsored plan stops providing supplemental benefits to Medicare, yet continues to provide other benefits. You are also eligible for guaranteed issue Medicare Supplement coverage due to divorce or death of a spouse or family member or if your retiree plan stops paying the Medicare Part B or the 20% coinsurance for services.
- Increased Premium, Increased Cost-Sharing, Reduction of Benefits or Termination of a Provider in Your Medicare Advantage Plan - You have the right to buy a Medigap plan outside the annual enrollment period If the Medicare Advantage plan you belong to increased your premium or copayments by 15% or more, reduced your benefits or terminated its relationship with your medical provider who was treating you. You have 63 days to purchase one of the guaranteed issue Medigap policies from the time you are notified of any reduced benefits, increased premium or cost-sharing, or that your plan is no longer contracting with one of your medical providers. You can change back to a medicare supplement plan during certain periods when you’re allowed to disenroll from your Medicare Advantage plan. Since Medicare Advantage plans may not reduce their benefits or increase premiums or cost-sharing during the plan year, you will only be notified of any reduction in benefits or increase in premiums or cost-sharing for the new plan year during the Annual Election Period (AEP) which allows you to disenroll from your Medicare Advantage plan.
The Annual Election Period is October 15 – December 7 each year. The effective date is always January 1st. If you disenroll during this period, the effective date of your disenrollment will be January 1 of the following year. A Medicare Advantage plan may, however, discontinue its contract with a provider anytime during the year. Even though you may have a guaranteed issue right to buy a Medigap plan when your medical provider no longer has a contract with your Medicare Advantage plan, you may not have a corresponding right to disenroll from that MA plan.
- Moving Out of Medicare Advantage (MA) Plan or PACE Organization Service Area - You have the right to purchase a Medigap plan if you move out of the service area of your Medicare Advantage (MA) plan or Program for All-Inclusive Care for the Elderly (PACE) organization. You have the right to buy a Medigap or Medicare Supplement policy even when that MA plan or PACE organization are available in your new area.
- Medicare Plan Fraud, Loss of Contract, Misrepresentation or Failure to Meet Contractual Obligations - You have the right to purchase a Medigap plan if your Medicare Advantage (MA) plan commits fraud, ends or loses its contract with Medicare, misrepresents the plan you bought or has failed to meet its contractual obligations towards its Medicare beneficiaries, as determined by the federal government
- Medicare Trial Period #1 - You have the right to purchase a Medigap plans during the Medicare Trial Period #1: You joined a Medicare Advantage (MA) plan when you first became eligible for Medicare at age 65, and you want to switch back to a Medicare Supplement policy during your first 12 months in that Medicare Advantage plan. (Note: If you were previously in an MA plan you are not eligible for this guaranteed-issue right.)
- Medicare Trial Period #2 - You have the right to purchase certain Medigap plans if you switch from a Medigap policy to an MA plan, PACE organization, Medicare SELECT plan for the first time since becoming eligible for Medicare, and you disenroll from that plan within the first 12 months. You have the option to return to your previous Medigap policy if it is still available. If it is not available, you can choose plans any other Florida Medicare Supplement Insurance company. This can be somewhat complicated to do and it’s highly recommended that you work with an independent Medicare Supplement agent to make sure it is done thoroughly and properly. If you were previously in an MA plan, Medicare SELECT plan or any other health care organization contracting with Medicare, you are not eligible for this guaranteed-issue right.