If you are turning 65, or you are about to lose your insurance through your employers health plan, it is crucial to understand Part A and Part B of Medicare.
You could also be turning 65 and will continue to work and you will not lose your employer based health insurance. No matter your situation, we have created a cheat sheet that you will find very useful. Click on the link to review this page: Start Here.
The industry can make Medicare really confusing and hard to understand, but we want to break it down for you so that you can have the knowledge to make the best decisions for your coverage.
Medicare is made up of 4 parts: Part A, Part B, Part C, and Part D.
While there are 4 Parts of Medicare, Original Medicare is made up of just Part A and Part B. Enrolling into these two parts of Original Medicare are required if you want to obtain a Medigap / Medicare Supplement Plan or enroll into Part C / Medicare Advantage Plan are always going to be the base of your coverage.
While you are not required to enroll into Part B or Part D these two Medicare Part’s do have late enrollment penalties if you don’t enroll when you first become Medicare Eligible for these two benefits.
There are three ways to sign up / apply for Medicare Part A and Part B.
1) You can easily apply online for Medicare to start, using this link:
2) You can call to Apply:
3) You can Apply in Person
(if your Social Security office is open.) Here is a directory of the Social Security offices:
Because of Covid-19 most people are finding that there are really only two options to sign up as their local Social Security Office are not allowing for in person visits. Please check with your local Social Security office to see if they are open if this is your preferred method of signing up for Medicare.
As mentioned above, Part A is going to be your hospital insurance. It will also cover skilled nursing services.
Many people wonder how much does it cost to go to the Hospital under Original Medicare. Following is a breakdown of the cost if you go to the Hospital.
You pay (Plan year 2020):
Please keep in mind that these cost assume you only signed up for original Medicare. Most Medicare Beneficiaries will also purchase a separate Medigap plan as many of these plans will cover 100% of these cost.
Once you reach age 65 and enroll into Medicare Part A, most Medicare beneficiaries will not have to pay an insurance premium for their Part A coverage. This is because you have paid for this coverage through your payroll taxes. As long as You or your spouse paid into your Medicare taxes for a total of 40 quarters / 10 years. If you are not sure if you have met this requirement we encourage you to check your status at Medicare.gov.
If you are already taking Social Security benefits, you will automatically be enrolled in Part A and Part B when you are about to turn 65. If you are not taking Social Security, you can sign up for Medicare through Social Security.
If you do not have another form of health insurance when turning 65, definitely sign up for Medicare Part A. We recommend clients who keep working past 65 still sign-up for Medicare Part A even if they are staying on their work insurance. It is free and might provide you some extra protection if you should have to go to a hospital.
Medicare Part B covers your doctor and outpatient services.
Part B has a monthly premium of $144.60 in 2020. Most people are going to pay this out of their Social Security check. If you make a higher income, you could pay more for your Part B.
Part B also has a yearly deductible of $198 in 2020. Once you pay the deductible, Medicare Part B covers 80% of all your bills. You have to pay the remaining 20% coinsurance related to your Part B Medicare coverage. It is important to not confuse your Part B deductible from the Part A deductible.
We are finding that most medical needs are now falling under your Part B coverage. Prior most Hospitals would deal with many of the procedures needed which would have fallen under your Part A benefit. However even if you are treated at a hospital they are not classifying many procedures as Outpatient services which falls under your Part B benefits. This means you will have a 20% coinsurance obligation / bill that you will be responsible for. There is no cap or max out of pocket limit for the coinsurance amount.
To break that down, if you get a $1,000 Medicare Part B charge, you have to pay $200. If you get a $10,000 Medicare Part B charge, you have to pay $2,000. If you get a $100,000 Medicare Part B charge, you have to pay $20,000. While 20% doesn’t seem like much on small bills, it can and will add up very quickly.
This example assumes all your providers accept Original Medicare assignments. While most providers do, if they don’t you would also be responsible for any excess charges that can equal 15% of the bill, which could make the out-of-pocket costs even higher.
As Medicare Part B can be delayed if you have creditable coverage through an employer plan, we recommend that you do not sign up for Medicare Part B until you no longer have coverage from your work or a spouse’s work. It will be important that you obtain a letter from your or your spouse’s employer stating when your coverage will end.
It is also important that you sign up for Part B coverage with the timeframe required to avoid paying any late penalties. Please review out enrollment periods page for a more complete understanding of all of the time periods to enroll.
If you are already taking Social Security benefits, you will need to opt-out of Medicare Part B. If you are not taking Social Security benefits and don’t want Part B, you do not have to do anything.
A Medicare Supplement insurance policy is a great way to contain your cost related to Original Medicare. As you have read both Part A and Part B have cost that could bring a very expensive bill if and when you go to the Hospital or Doctor’s office.
A Medigap policy are sold by a private insurance company but the coverages are designed and approved by the US Government. This means that the coverages are standardized across all insurance carriers. This means that if you purchase a Plan G from carrier A, B, or C that plan is required to be the exact same. The only thing that can be different is the premium each carrier charges for that specific plan.
Another great advantage of staying with Original Medicare and purchasing a Medigap plan, is that this allows your Doctor to decide what is “Medically Necessary” and not turn that decision / control over to the insurance company or a medical group. If you sign over your Medicare rights over to a Medicare Advantage Plan that is exactly what you are doing.
The biggest reason Medicare Beneficiaries obtain a Medigap plan is to fill in the gaps left behind by Original Medicare. In addition, when you stay with Original Medicare with a Medigap plan you are able to keep your ability to see any Doctor or medical facility that accepts Medicare. You are not tied to a specific limited group of Doctors or medical facilities.
If you have a Medicare Supplement, not only is it going to pay this 20% coinsurance, if you choose the right plan, it will also cover the Part A deductible as well as the excess charges that you would be responsible for.
The Medicare Supplement that we recommend for almost all our clients is the Plan G. The Plan G typically provides the greatest coverage for the best value.
You want to make sure you work with an independent Medicare Insurance Agent who sells for multiple Medicare Insurance Carriers to ensure you get the best rate for your Medicare Supplement.
Integrity Now Insurance Brokers represents all of the major Medicare Insurance Carriers that are available in the marketplace today. We would love to hear from you so we can review your Medicare needs and find a plan that meets your Medicare needs.
Integrity Now Insurance Brokers, Inc.