Turning 65 but Unsure What to do About Medicare?

If you’re within 90 days of celebrating your 65th birthday, you’ll be hearing a lot about Medicare! It’ll seem like every health insurance company and agent who sells Medicare will be mailing you solicitations. This is because you’re on the “Turning 65 List”. You might also receive unsolicited phone calls from agents. Anyone who calls you without your prior written permission is violating Medicare’s rules. Medicare refers to this as “cold calling” and it’s prohibited. The same rule applies to door knocking - if you didn’t give them written permission first, no one should be knocking on your door about Medicare.

At this time, Medicare is taking a little longer to process Medicare Part A and Part B applications. To assist you with this, we can also set up a teleconference to walk you through the steps or send you instructions on how to apply for Medicare online. If you need assistance, please call us at your convenience at 314-518-8266 or email: Ask@InsuranceSP.com

HERE ARE SOME BASICS TO HELP WITH YOUR DECISION MAKING:

1. Original Medicare has 2 parts:

   i) Part A - covers in-patient care. It’s premium-free as long as you’ve contributed to payroll taxes for 40 quarters or 10 years. (You can also buy it )

   ii) Part B - covers outpatient care. In 2024 the standard premium is $174.70/month. If you’re a higher-income earner, you may pay an Income Related Monthly Adjustment Amount (IRMMA). IRMMA is based on a two-year IRS look back at your tax filings. If you file a joint tax return, you and your spouse will each pay this surcharge. Social Security will inform if you have to pay IRMAA & how much you must pay. This surcharge is added to both your Part B & Part D premiums.

2. Original Medicare DOESN’T cover everything! There’s no Maximum Out of Pocket in Original Medicare which means there’s no SAFETY FINANCIAL NET! You’ll need to opt for either a Supplemental or Coordinated Care plan to protect your pocketbook in case you develop a serious ailment or illness.

NOW LET’S REVIEW WHAT TO DO ABOUT ENROLLING IN ORIGINAL MEDICARE:

1. You’re already taking Social Security: You’ll be automatically enrolled in Medicare Part A & B: Medicare will mail your red, white, & blue Medicare card bearing your name, your Medicare Beneficiary Identifier (an alpha-numeric code) and the effective dates for both Medicare Part A and B. (See sample card posted.) DON’T CONFUSE THIS WITH THE OTHER SOLICITATIONS you’ll get from insurance sales agents/companies who bought your information from a turning 65 list! Many Medicare Eligibles tell me they thought it was an advertisement and threw it out!

2. You’re not on Social Security and want Medicare to start at age 65: Contact Medicare at least 90 before the first of the month of your birth. (A month earlier if you’re born on the first day of the month). You may enroll online at: SSA.gov. Just follow the prompts to enroll in Medicare.

3. Full-Time Employees with Employer-Sponsored Health Insurance who work past age 65:

   i) Ask your HR Department, or whoever oversees your benefits.If the health insurance they’re offering is deemed “Creditible Coverage” (at least as good as a Medicare Part D Prescription Drug plan) you may delay enrolling in Medicare. If it’s not, you’ll need to enroll in Medicare to avoid a Late Enrollment Penalty (LEP).

   ii) Ask if your current coverage will be PRIMARY (pays first) to Medicare.

   If the answer to each of these questions is “YES”, you may delay enrolling in Medicare without fear of future Late Enrollment Penalties.

4. Full Time Employees with Employer Sponsored Health Insurance deemed NOT creditible.

   You’ll need to enroll in Medicare Part A & B to avoid future Late Enrollment Penalties. They’re steep - 10% for every 12 months you delayed enrolling in Part B and 1% of the average national Part D plan premium for each month you were eligible but delayed enrollment. You’ll pay that Part D penalty for the rest of your life! (Penalties apply ONLY if you had coverage that WASN’T creditable. If it’s creditable, you won’t pay a penalty.)

5. Turning 65 and already collecting Social Security.

   Medicare will automatically mail your red, white, and blue Medicare Beneficiary card. It bears your name, Medicare Beneficiary Identifier (alpha-numeric code) and your Medicare Part A & B effective dates. If you continue to work and your group coverage is “creditable” you may follow the instructions on this card and opt out of Medicare Part B without fear of future Late Enrollment Penalties. Before you do, compare the coverage and cost of your current plan with those available through Medicare to see which is most comprehensive and cost-effective. Part A is premium free and will coordinate with your group plan so there’s no harm in taking it when you’re first eligible.

6. How to Pay the Medicare Part B premium.

   If you’re collecting Social Security, your Medicare Part B premium is automatically deducted from your Social Security check. If you’ve delayed Social Security, you’ll be billed quarterly.

   SUPPLEMENTAL OR COORDINATED CARE PLANS? WHAT’S THE DIFFERENCE?

   i) SUPPLEMENTAL PLANS: Medicare Supplement Plans (also called Medigap Plans) coordinate with Original Medicare and cover copays, deductibles, and coinsurance costs not covered by Original Medicare. Medicare Supplement Plans use alphabet letters to distinguish between plans. Medicare Supplement Plans A - N, each cover a different combination of the costs not covered by Original Medicare. Plan F covers everything but is only available to enrollees who were age 65 on or before January 1, 2020. Plan G is currently the most comprehensive plan available to new enrollees. Plan G will cover all the costs not covered by Original Medicare except the Part B deductible which is $240 in 2024. There are other options for you to choose from too depending on your needs & personal choice. If you opt for a Medicare Supplement plan or Medigap Plan, you’ll pay a monthly premium for it in addition to your Medicare Part B premium. Plus you’ll need to add a stand-alone Prescription Drug plan for which you’ll also pay a premium. These are “pay up-front” plans. They are very comprehensive depending on which Medicare Supplement plan letter you choose & you don’t have to worry about networks. Medicare Supplements also called Medigap plans are accepted by any provider nationwide who accepts Medicare.

   ii) Medicare Advantage also called Part C. These are calendar-year, network-based plans offering coordinated care. Some people also referred to them as “replacement plans”. They are similar to the coverage we get from group health plans. The two most common options are the HMO and PPO. With an HMO, you’ll have a primary care doctor who coordinates your care. Some HMOs require referrals, others do not. You may only see In-network providers (except in an emergency).

   A PPO Medicare Care Advantage plan doesn’t require referrals & you may see out-of-network Providers who agree to accept the terms & conditions of the plan. (but you’ll pay more for their services).

   With an HMO or a PPO, you’ll pay copays for some services and coinsurance for others. Each payment you make is applied to the plan’s maximum out-of-pocket. If you reach it, the plan will pay for all other services for the rest of the year as long as they are medically necessary and Medicare-approved. In addition, these plans include additional benefits. Most include a prescription drug plan plus extra benefits for optometry, comprehensive dental, hearing aids, a fitness membership, and an over-the-counter quarterly benefit for generic items such as vitamins, ibuprofen, bandages, etc. These are pay-as-you-go plans, if you don’t go you typically don’t pay, although you may pay a small additional premium depending on where you live. Your pocketbook is protected by your plan’s Maximum Out of Pocket - that’s your safety net.