If You Are New To Medicare And Do Not Understand What Medicare Is All About, Start Here

Michael T. Braden, August 27, 2024 BRADEN MEDICARE INSURANCE

They say a journey of 1000 miles begins with 1 step. If you don't understand Medicare, start here.

BEFORE STARTING MEDICARE, YOU NEED TO BE ENROLLED IN MEDICARE

Getting older can be challenging.  The healthcare options available to you may seem confusing or unnecessary.  Your inexperience in this new chapter, coupled with ongoing health concerns, creates a recipe for disaster.  The best way to address these fears is to understand your options and the enrollment process.   With age comes wisdom, and knowing how to navigate the system will demonstrate it.  Getting the coverage and protection that you need is much easier than it seems.  Here are three essential parts of enrolling in Medicare that will help guide you through the process.

TIMING

The biggest mistake seniors make when enrolling in Medicare is timing.  There is a small window during which enrollment is open.  This window is limited to the three months leading up to your 65th birthday, the month of your birthday, and the three months following your birthday.  Failure to enroll within the specified timeframe may result in penalties.  To avoid those fees, being proactive with the enrollment is the best way to get started.  This time is called the “First Enrollment Period,” which is self-explanatory.  Getting ahead of the enrollment period gives you plenty of time to ensure you are comfortable with your coverage before using it.

KNOWLEDGE

Many seniors make mistakes because they feel vulnerable and don’t want to be taken advantage of.  The best way to address this is to educate yourself about your options.  There are two parts to the enrollment.  Part A covers long-term care, hospice, and hospital stays.  Part B covers specific doctors’ appointments, outpatient visits, and medical supplies.  The two parts work together to keep you covered across a wide range of situations. 

Part C is an elective component that supplements A and B.  Think of Part C as the component that expands your options.  With Part A and Part B, you may be limited in the number of physicians who accept Medicare.  Part C is offered through a separate private company, which provides more options and a broader coverage portfolio.  Part B is paid coverage; you may elect not to have it, but doing so will result in a loss of benefits. Considering the benefits of additional coverage in the event of illness or accident is best achieved by consulting a reputable Medicare Part C affiliate. They can educate you on the benefits of extra protection that can help keep your out-of-pocket expenses minimal when the time comes. There’s more that can be done than just crossing your fingers and hoping for the best. Keeping in mind the value of having a small monthly premium to improve the quality and accessibility of care when needed will pay off later.   

ENROLLMENT

Enrollment options vary, but there’s one for everyone.  The easiest way is to attempt to enroll online.  If you have internet access on your phone, desktop, or laptop, you can enroll in care on the website.  On medicare.gov, the process is outlined, and the application can be filled out there.  The system on the government website is very user-friendly and allows guided question-and-answer completion.  You can check the status of your application after submission on the website.  This avenue helps prevent unnecessary trips to the Social Security office, and you can make corrections to your application online.  To ensure that it is completed, you can also track the status of your application for Medicare to verify what stage it is at and if there are any processing issues. This allows you to get ahead of potential problems that may require additional information or documentation from you.  If you do prefer to avoid the Social Security office but don’t feel confident about applying through their website, you can also apply by phone.  The Medicare Registration can be reached at 1-800-772-1213.  The office is open 7 am to 7 pm, and their service will walk you through the application process.  Of course, you can take the old-fashioned way and head to the Social Security office and wait in line.  These processes vary in time, but the fastest option is typically over the phone or via the website.

Preparation is key.  Now that you have a good understanding of the options available, you will want to weigh your choices.  There are pros and cons to the coverage options, and realistically, you want to pick the one that best fits you.  However, it is worth noting that with age come additional health risks.  Rejecting valuable coverage can leave someone in financial ruin without insurance to pay the difference in cost.  By leveraging your understanding of your needs and being proactive, you will feel confident and empowered in your decisions.  Seeing your friends or family members impacted by a terminal condition or an ongoing health issue may have already led you to see this.  It is all the more critical for you to consider your options.  Another benefit of Medicare is that each year you can adjust the coverage from what you had selected the previous year.  Regardless of this opportunity, be careful to say, “Maybe next year I’ll add Part C,” as the year passes, emergencies can arise. At this critical juncture in your life, it is essential that you feel poised to handle your own Medicare benefits without the fear of being taken advantage of.  The more you know, the better you can protect yourself.  Knowledge is power, and with age comes wisdom, so you’re likely to make the right decision with all that you’ve learned.

GETTING STARTED WITH MEDICARE

As you get started with Medicare, you have a choice in how you get your Medicare coverage. And there are some critical decisions for you to make. Follow these three steps to help you get started:

SIGN UP FOR MEDICARE THROUGH SOCIAL SECURITY

Social Security enrolls you in Original Medicare (Part A and Part B).

• Medicare Part A (Hospital Insurance) helps pay for inpatient care in a hospital or limited time at a skilled nursing facility (following a hospital stay). Part A also pays for some home health care and hospice care.

• Medicare Part B (Medical Insurance) helps pay for services from Doctors' Visits and other health care providers; laboratory costs; medical imaging (MRIs, CT scans & X-rays); outpatient care; home health care; durable medical equipment; and some preventive services, such as Screenings.

  
  
  
  

OTHER PARTS OF MEDICARE ARE MANAGED BY PRIVATE INSURANCE COMPANIES THAT ARE OBLIGATED TO FOLLOW THE RULES AND GUIDELINES SET FORTH BY MEDICARE

• Supplemental (Medigap) policies help pay Medicare out-of-pocket copayments, coinsurance, and deductibles.

• Medicare Advantage Plan (previously known as Part C) includes all benefits and services covered under Parts A and B—prescription drugs and additional benefits such as vision, hearing, and dental—bundled into one plan.

• Medicare Part D (Medicare prescription drug coverage) helps cover the cost of prescription drugs.

  
  

Most people aged 65 or older are eligible for free medical hospital insurance (Part A) if they have worked and paid Medicare taxes long enough. You can enroll in Medicare Medical insurance (Part B) by paying a monthly premium. Some beneficiaries with higher incomes will pay a higher monthly Part B premium. To learn more, read:

MEDICARE DOES HAVE RULES IN PLACE FOR HIGH-WAGE EARNERS

IRMAA Stands for Income-Related Monthly Adjusted Amount. It acts as a Tax, but Medicare & Social Security prefer to refer to it as simply a monthly upcharge to the standard Medicare Part B and Medicare Part D Premiums. Many Professionals and Other high-wage earners are subject to this rule. The rule is not permanent. Typically, after you retire, within a year or two, when your Tax Filing shows you are no longer included, you can call your local SS Office and request a meeting to have the IRMAA removed. Please bring the records supporting your request. They will be happy to remove it. If there is any overpayment, they will refund it to you.

SHOULD YOU SIGN UP FOR MEDICARE PART B?

If you’re eligible at age 65, your initial enrollment period begins three months before your 65th birthday, includes the month you turn age 65, and ends three months after that birthday.

 There are many factors to understand and consider when it's time to enroll in Medicare. For everyone, enrolling in Medicare Part A (Hospital Insurance) is a no-brainer.  It is free for 99% of those enrolling who have worked or have a spouse who has worked for at least 10 years.  Enrolling in Part B depends on your current Work situation and, believe it or not, the type of Health Insurance you currently have.  Why does that matter?  Medicare considers health coverage from a company with more than 20 employees to be "Credible" coverage.  All other Health Care coverage is considered non-credible by Medicare. Even if you have ACA/Obamacare insurance, it is not considered "Credible" by Medicare. So, at age 65, unless you are insured under your or your spouse's Employer Health Plan, you need to enroll in Medicare Parts A & B at age 65 to avoid any penalties.

If you choose not to enroll in Medicare Part B initially and later decide to enroll, your coverage may be delayed, and you may have to pay a higher monthly premium for as long as you have Part B. Your monthly premium will go up 10 percent for each 12-month period you were eligible for Part B, but didn’t sign up for it, unless you qualify for a "Special Enrollment Period" (SEP).

If you don’t enroll in Medicare Part B during your initial enrollment period, you have another chance each year to sign up during a “general enrollment period” from January 1 through March 31. Your coverage begins on July 1 of the year you enroll. 

If you have a Health Savings Account (HSA) or health insurance based on current employment, you may want to ask your personnel office or insurance company how signing up for Medicare will affect you.

SPECIAL ENROLLMENT PERIODS (SEP)

If you have medical insurance coverage under a group health plan based on your or your spouse's current employment, you may not need to apply for Medicare Part B at age 65. You may qualify for a "Special Enrollment Period" (SEP) that will let you sign up for Part B during:

• Any month you remain covered under the group health plan and you, or your spouse's, employment continues.

• The 8-month period begins on the first day of the month after your group health plan coverage or the employment it is based on ends, whichever occurs first.

  
  

HOW TO APPLY FOR JUST MEDICARE

If you are within three months of age 65 or older and not ready to start your monthly Social Security benefits yet, you can use our online retirement application to sign up just for Medicare and wait to apply for your retirement or spouse's benefits later. It takes less than 10 minutes, with no forms to sign and usually no documentation required.

MEDICARE CARDS

To help protect your identity, your Medicare card has a Medicare number that’s unique to you. If you did not receive your red, white, and blue Medicare card, there may be an issue that needs to be corrected, such as your mailing address. You can update your mailing address by signing in to or creating your personal my Social Security account. Learn more about your Medicare card.

ARE YOU ALREADY ENROLLED IN MEDICARE?

If you already have Medicare, you can get information and services online. Find out how to manage your benefits.

If you are already enrolled in Medicare Part A and you want to enroll in Part B, please complete form CMS-40B, Application for Enrollment in Medicare – Part B (medical insurance). If you are applying for Medicare Part B due to a loss of employment or group health coverage, you will also need to complete form CMS-L564, Request for Employment Information.

You have three options to submit your enrollment request under the Special Enrollment Period. You can do one of the following:

1. Go to “Apply Online for Medicare Part B During a Special Enrollment Period” and complete CMS-40B and CMS-L564. Then upload your evidence of a Group Health Plan or a Large Group Health Plan.

2. Fax your CMS-40B and employer-signed CMS-L564 to 1-833-914-2016.

3. Mail your CMS-40B and employer-signed CMS-L564 to your local Social Security office.

Note: When completing the CMS-L564

• State on the form “I want Part B coverage to begin (MM/YY)” in the remarks section of the CMS-40B form or online application.

• If possible, your employer should complete Section B.

• If your employer is unable to complete Section B, please complete that portion as best as you can on behalf of your employer without your employer’s signature and submit one of the following forms of secondary evidence:

  
  

  • An income tax form that shows health insurance premiums paid.

  • W-2s reflecting pre-tax medical contributions.

  • Pay stubs that reflect health insurance premium deductions.

  • Health insurance cards with a policy effective date.

  • explanations of benefits paid by the GHP or LGHP; or

  • Statements or receipts that reflect payment of health Insurance premiums.

    
    

You’ll have Original Medicare (Part A and Part B) unless you make another choice. You can decide to add a drug plan (Part D) or buy a Medigap policy to help pay for costs that Original Medicare doesn’t cover. You can choose to join a Medicare Advantage Plan (Part C) and get all your Medicare coverage (including drugs and extra benefits like vision, hearing, dental, and more) bundled together in one plan.

 Some people with limited resources and income may also be eligible for Extra Help to pay for Part D drug costs.

WHAT HAPPENS AFTER I APPLY?

The Centers for Medicare & Medicaid Services CMS) manages Medicare. After you are enrolled, they will send you a Welcome to Medicare packet by mail, including your Medicare card. You will also receive the Medicare & You handbook, with important information about your Medicare coverage choices. 

People get Medicare coverage in different ways. You'll get lots of information to help you decide how to get your Medicare coverage:

• An official "Welcome to Medicare" packet with important information about your coverage options.

• Your official "Medicare & You" handbook once you're enrolled and every year, each fall.

• Mail from private insurance companies, agents, and brokers, marketing the Medicare plans they offer.

  
  

THE TWO MAIN WAYS TO GET MEDICARE COVERAGE

1) ORIGINAL MEDICARE/TRADITIONAL MEDICARE

Includes Part A and Part B. You can use any doctor or hospital that takes Medicare, anywhere in the U.S.

• If you want drug coverage, you can join a separate Medicare Prescription Drug Plan (Part D).

• To help pay your out-of-pocket costs in Original Medicare (like your 20% coinsurance), you can also shop for and buy supplemental coverage like a Medicare Supplement Insurance Plan or Medigap policy.

If you don't get Part D or a Medigap policy when you're first eligible, you may have to pay more to get this coverage later. For Part D, this could mean a lifetime premium penalty.

2) MEDICARE ADVANTAGE (MEDICARE PART C)

An "all-in-one" alternative to Original Medicare. These "bundled" plans include Part A, Part B, and usually Part D. Most plans offer additional benefits that Original Medicare doesn't cover, such as vision, hearing, dental, and more.

• Plans may have lower out-of-pocket costs than Original Medicare.

• In most cases, you'll need to use doctors who are in the plan's network.

HOW MEDICARE WORKS WITH OTHER INSURANCE

If you have Medicare and other health insurance or coverage, each coverage type is called a "payer." When there is more than one payer, "coordination of benefits" rules determine which one pays first. The "primary payer" pays what it owes on your bills first, and then sends the rest to the "secondary payer" to pay. In some cases, there may also be a third payer.

WHAT DOES IT MEAN IF MEDICARE IS THE PRIMARY OR SECONDARY PAYER?

• The insurance that pays first (primary payer) pays up to its coverage limits.

• The one that pays second (secondary payer) only pays if there are costs the primary insurer didn't cover.

• The secondary payer (which may be Medicare) may not pay all the uncovered costs.

• If your employer's insurance is the secondary payer, you may need to enroll in Medicare Part B before your insurance will pay.

  
  

If the insurance company doesn't pay the claim promptly (usually within 120 days), your doctor or other provider may bill Medicare. Medicare may make a conditional payment to cover the bill and later recover any payments the primary payer should've made.

HOW DOES MEDICARE COORDINATE WITH OTHER HEALTH COVERAGE?

If you have questions about who pays first, or if your coverage changes, call the Benefits Coordination & Recovery Center (BCRC) at 1-855-798-2627 (TTY: 1-855-797-2627). Tell your doctor and other health care providers about any changes in your insurance or coverage when you get care.

IS THERE A PENALTY IF I DO NOT ENROLL IN TIME FOR MEDICARE?

Medicare is very strict about when you can and need to enroll in or change your Medicare Coverage.  If you have Employer Coverage, for example, you're fine as it is considered Credible Coverage.

• Unless you are enrolled in Medicare Part B during your IEP, you will most likely be subject to paying a late enrollment penalty. This can hurt because all late enrollment penalties continue as long as you have Medicare Coverage.  The Late Penalty is 10% for each year that you should have had Part B coverage but didn't. The standard premium for Part B is $148.50 in 2021, which means you’ll pay an extra $14.85 every month. This will increase if the standard Part B premium goes up next year, which it likely will. You’ll pay this penalty even if you ultimately choose to enroll in a Medicare Advantage Plan.

• You may need to continue without Part B for an extended period. If you fail to enroll in Medicare Part B during your IEP, you will not be able to enroll until the General Enrollment Period, or GEP. This means your coverage won’t start until July 1 that year.

• If you don’t have creditable Part D prescription drug coverage and miss your IEP, you’ll pay a penalty with your Part D premium—again, as long as you have the coverage. The penalty is 1% per consecutive month that you went without coverage for prescription drugs. The national base premium is currently about $36 per month, so if you go without coverage for a year, you’ll pay an extra $4.30 a month, and probably will even pay a little more if the Part D base premium increases. And this penalty will be in force as long as you have Part D coverage.

  
  

WHAT DOES IT MEAN TO HAVE CREDITABLE COVERAGE?

Most Medicare beneficiaries who are still working have group coverage through an employer or an employer's union plan.  This allows you to delay enrollment in Part A and/or B without penalties.  When you retire, you can enroll in those Parts during a Special Enrollment Period (SEP). Medicare credits you for employer group coverage with any large employer (20+ employees). Later, when you retire, you will be eligible for a 63-day Special Enrollment period to sign up for Parts A and/or B with no late enrollment penalties. The Medicare Special Enrollment Period is an eight-month period that begins either the month you or your spouse quits working or the month your group coverage ends, whichever comes first.

WHEN IS THE MEDICARE GENERAL ENROLLMENT PERIOD?

If, for some reason, you missed or forgot to enroll in your Initial Enrollment Period (IEP), you will have to wait to enroll in the General Enrollment Period (GEP). This runs from January 1 through March 31 each year. Even though you can enroll in Original Medicare during this time, you are still subject to the late enrollment penalties. However, in most cases, your new Medicare coverage will not take effect until July 1st, leaving you with an extended period without insurance. Keep in mind that the General Enrollment Period only applies to Original Medicare. If you want a Medicare Advantage plan or Medicare Part D coverage for prescription drugs, you’ll have to wait for the Annual Enrollment Period. From October 15 through December 7th each year.

WHAT IS MEDIGAP INSURANCE?

Medigap is Medicare Supplement Insurance that helps fill "gaps" in Original Medicare and is sold by private companies. Original Medicare covers much, but not all, of the cost of covered health care services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, like:

• Co-Payments

• Coinsurance

• Deductibles

  
  

Some Medigap policies also cover services that Original Medicare doesn't, such as medical care when you travel outside the U.S. If you have Original Medicare. You buy a Medigap policy, here's what happens:

• Medicare will pay its share of the Medicare amount for covered health care costs.

• Then, your Medigap policy pays its share.

  
  

THE TOP 8 THINGS YOU NEED TO KNOW REGARDING MEDIGAP/MEDICARE SUPPLEMENTS

1. You must have Medicare Part A and Medicare Part B.

2. A Medigap policy is different from a Medicare Advantage Plan.  Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.

3. You pay the private insurance company a monthly premium for your Medigap policy. You pay this monthly premium in addition to the monthly Part B premium that you pay to Medicare.

4. A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you'll each have to buy separate policies.

5. You can buy a Medigap policy from any insurance company that's licensed in your state to sell one.

6. Any standardized Medigap policy is guaranteed renewable, even if you have health problems. This means the insurance company can't cancel your Medigap policy as long as you pay the premium.

7. Some Medigap policies sold in the past covered prescription drugs. But, Medigap policies sold after January 1, 2006, aren't allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Part D (Prescription Drug Plan).

8. It's illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you're switching back to Original Medicare.

   
   
   
   

IS THERE ANYTHING A MEDIGAP POLICY WILL NOT COVER?

Medigap policies generally don't cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.

INSURANCE THAT IS NOT MEDIGAP INSURANCE

Some types of insurance aren't Medigap plans; they include:

• Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)

• Medicare Prescription Drug Plans

• Medicaid

• Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)

• Tri-Care

• Veterans' benefits

• Long-term care insurance policies

• Indian Health Service, Tribal, and Urban Indian Health plans

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CANCELLING YOUR MEDIGAP COVERAGE

You may want a completely different Medigap policy (not just your old Medigap policy without the prescription drug coverage). Or you might decide to switch to a Medicare Advantage Plan that offers prescription drug coverage. If you choose to drop your entire Medigap policy, be careful about the timing. When you join a new Medicare drug plan, you pay a late enrollment penalty if one of these applies:

• You drop your entire Medigap policy, and the drug coverage wasn't credible prescription drug coverage.

• You go 63 days or more in a row before your new Medicare drug coverage begins.

  
  

MEDICARE SUPPLEMENT & MEDIGAP COSTS

Medicare doesn't cover any of the costs of obtaining a Medigap policy. You have to pay the premiums for a Medigap policy.

MEDIGAP HELPS COVER SOME OR ALL OF YOUR MEDICARE PART B COSTS

In most Medigap policies, the Medigap insurance company will get your Part B claim information directly from Medicare. Then, they pay the doctor directly. Some Medigap insurance companies also provide this service for Part A claims. If your Medigap insurance company doesn't offer this service, ask your doctors if they "participate" in Medicare. This means that they "accept assignment" for all Medicare patients. If your doctor participates, the Medigap insurance company must pay the doctor directly upon your request.

COMPARING THE COST OF MEDIGAP PLANS

Insurance companies may charge different premiums for the same policy. As you shop for a policy, be sure you're comparing apples to apples. For example, compare Plan A from one company with Plan A from another company. In some states, you may be able to buy another type of Medigap policy called Medicare SELECT. If you purchase a Medicare SELECT policy, you have the right to change your mind within 12 months and switch to a standard Medigap policy. The Medicare Advantage Open Enrollment Period

MEDICARE ADVANTAGE PLANS

Medicare Advantage Plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide all your Part A and Part B benefits. Most Medicare Advantage Plans also offer prescription drug coverage. If you’re enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan. Original Medicare doesn’t pay for your Medicare services. Below are the most common types of Medicare Advantage Plans. 

• Health Maintenance Organization or HMO Plans

• Preferred Maintenance Organizations or PPO Plans

• Private Fee for Service Plans or PFFS Plans

• Special Needs Plans or SNPs and Dual Special Needs Plans or DSNPs

MEDICARE PART D LATE ENROLLMENT PENALTY

The late enrollment penalty is an amount added to your Medicare Part D monthly premium. You may owe a late enrollment penalty if, for any continuous period of 63 days or more after your Initial Enrollment Period is over, you go without one of these:

• A Medicare Prescription Drug Plan (Part D)

• A Medicare Advantage Plan (Part C) (like an HMO or PPO) or another Medicare health plan that offers Medicare prescription drug coverage

• Credible prescription drug coverage.

  
  

3 WAYS TO AVOID PART D PENALTIES

1. Join A Medicare Drug Plan When You're First Eligible.

You won't have to pay a Part D late enrollment penalty, even if you've never had prescription drug coverage before.

2. Don't Go 63 days Or More In A Row Without Medicare Prescription Drug Coverage Or Other Creditable Drug Coverage.

Credible prescription drug coverage may include coverage from a current or former union employee, TRICARE, the Indian Health Service, the Department of Veterans Affairs, CHAMPVA, or other health insurance. Your prescription drug plan must tell you each year if your drug coverage is creditable. They may send you this information in a letter, or draw your attention to it in a newsletter or other piece of correspondence. Keep this information because you may need it if you join a Medicare drug plan later and want to avoid the Part D late enrollment penalty.

3. Keep Records Showing When You Had Creditable Drug Coverage, And Tell Your Plan About It.

When you join a Medicare drug plan, the plan will check whether you had creditable drug coverage for 63 days or more in a row. If the plan believes you didn't, it will send you a letter with a form asking about any drug coverage you had. To avoid a Part D penalty, complete the form and return it to your drug plan by the deadline in the letter. If you don't report your creditable drug coverage to the plan, you may be subject to a Medicare Part D late enrollment penalty. Are there company policies that are particularly important to your business? Perhaps your unlimited paternity/maternity leave policy has endeared you to employees across the company. This is a good place to talk about that.