Navigating the oftentimes complex world of Medicare can be intimidating. From when you can join to what each plan offers and which plan is right for you can see daunting. There are several Medicare Plans to choose from and even more supplmental insurance services that are available. This combined with the ever-changing rules implemneted by the government it may seem easier to just give up and go along with the first plan you see. Flaxbeard Insurance Advisors is here to help you make the best deciscion for you.
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Getting an honest and local agent will save you time and money. Don’t fret over having enough coverage or paying too much in monthly premiums. We streamline your insurance portfolio to give you back your time and take away your stress.
Who is Eligible?
Medicare is available for individuals who are in the following three groups:
- People 65 or older
- People of any age with End-Stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant)
- People under 65 with certain disabilities
- Those who have received Social Security disability benefits for 24 months
- Individuals with Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig’s Disease)
To be eligible for Medicare, a person must be a U.S. citizen and resident of the U.S. or an alien Living in the U.S. for 5 years who has been lawfully admitted for permanent residence.
Enrolling in Medicare
Enrollment in Medicare Parts A & B is automatic for people who are currently receiving Social Security benefits including:
- When a person applies for Social Security at age 65, enrollment in Medicare Part A & B is automatic.
- If Social Security benefits are taken before age 65, the Social Security office will automatically mail Medicare information approximately three months before the 65th
- A person who is receiving Social Security disability benefits will receive Medicare information a few months before the eligibility date.
Enrollment in Medicare Parts A & B is NOT automatic for those who are not receiving Social Security benefits including:
- Those who delay signing up for Social Security benefits until sometime after their 65th birthday
- Railroad retirees
- Government retirees not covered by Social Security but eligible for Medicare
- Widows and spouses not eligible on their own work record unless they are currently receiving a monthly Social Security benefits from any source
- End-Stage Renal Disease
- Anyone not eligible for Social Security benefits who is eligible for Medicare
If a person is not automatically enrolled in Medicare, they need to contact Social Security (or RRB) to enroll in Medicare. Failure to enroll in Medicare at the appropriate time can result in delayed Medicare coverage and penalties.
When Can I Get Medicare? / When should I sign up for Medicare?
Initial Enrollment Period (IEP) is a seven-month period and is available when one is first eligible for Medicare, either at age 65 or after 24 months of Social Security disability benefits. The seven-month period begins three months before the first month of eligibility.
When does Medicare start?
The Medicare effective date will depend on when the beneficiary enrolls, but will always be on the 1st of the month.
Do you have to pay for Medicare at age 65?
Usually everyone who is entitled to Medicare Part A takes it when they’re first eligible. After all, we pay for Part A through a payroll tax deduction while we’re working, and this is why most people pay no monthly premium for Part A. However, some people who are eligible for Medicare Part A but did not work long enough (40 quarters) under our Social Security system may not be eligible for premium-free Medicare Part A. That said, they can still join Medicare but must pay a “voluntary” Part A monthly premium.
There is a monthly premium for Part B. In 2020, most beneficiaries will pay $144.60/month for Part B. However, there are two scenarios in which beneficiaries may pay less or more than this amount:
- Beneficiaries subject to the “hold harmless” provision whose Social Security checks will not increase enough to cover the $144.60 premium: The hold harmless provision in federal law protects Medicare beneficiaries in two ways:
1. Part B premiums cannot increase in years when there is no Social Security cost of living adjustment (COLA), and
2. The net Social Security benefit cannot be lower than the previous year’s benefit amount. In 2019, the Social Security COLA was 2.8%. In 2020, the COLA will be 1.6%. For a small percentage of hold harmless beneficiaries with low Social Security benefit amounts, this means that while their Part B premium will increase in 2020, it will not reach $144.60, since their benefit cannot decrease.
- Beneficiaries with higher incomes: Certain individuals pay more for their Part B premiums because they are subject to income-related monthly adjustment amounts (IRMAA) rules. IRMAA applies to individuals whose modified adjusted gross income on their 2018 tax returns was more than $87,000 per individual or $174,000 for a couple. In 2019, a sixth tier was added to the IRMAA bracket for individuals earning $500,000 or more, and married couples filing jointly earning $750,000 or more.
Other Costs in Part B: In addition to the Part B premium, there are out-of-pocket costs beneficiaries pay when they receive services covered by Medicare Part B. And these costs, like the Part B premium, can change each year.
Part B Annual Deductible: Before Medicare starts covering the costs of care, people with Medicare pay an amount called a deductible. In 2020, the Part B deductible is $198.
Most people enrolled in a Part D plan (and not eligible for LIS/Extra Help assistance) have out-of-pocket expenses. Expenses may include:
- A monthly Part D plan premium (average premium in 2020 is $30),
- An annual deductible (maximum $435 in 2020),
- A cost-sharing portion of plan-covered drugs (either a copayment or coinsurance during the Initial Coverage Period),
- A percent of the cost of drugs during the period after the Initial Coverage Period and before Catastrophic Coverage begins (this used to be called the Coverage Gap or “donut hole”), and
If they reach the Catastrophic Benefit Period in their Part D drug benefit (only a small percentage of beneficiaries do), minimal drug copayments or coinsurance costs.
Is there a penalty for not signing up for Medicare?
- Clients who are eligible for Medicare Part A should know that there is a late enrollment penalty if they do not voluntarily enroll in Part A within 12 months of their Initial Enrollment Period (IEP). The penalty is calculated as 10% of the current Part A premium, and although the Part A is not a lifetime penalty like the Part B penalty, clients would have to pay the Part A penalty for twice the number of years that they should have enrolled in Part A but didn’t. If they are under 65 and have penalties, the penalty will be waived when they turn 65.
- Clients who enroll in Medicare Part B more than a year after they were first eligible for Part B may pay a monthly late enrollment penalty premium amounting to 10% of the standard Part B premium for each full year they delayed. This is a lifetime penalty – meaning as long as they have Part B, they have to pay a penalty unless they are either 1) eligible for a Medicare Savings Program or 2) were eligible for Medicare due to disability and had to pay premium penalties and have since turned 65. In these latter instances, the Part B penalty is waived
- People who do not sign up for a Medicare Part D drug plan when first eligible for Medicare may have to pay a late enrollment penalty if they enroll later on. Generally, an enrollment is considered late if the person did not join within three months after first getting Medicare Part A or Part B. The late-enrollment penalty is a monthly add-on premium calculated as 1% of the current national base beneficiary premium multiplied by the number of uncovered months, rounded to the nearest ten cents. In 2020, the national base premium is $32.74.
Are you able to stay on Medicare even though you are getting a disability check?
Those people under 65 years with certain disabilities can go on to Medicare after 24 months.
You will be eligible for Medicare benefits and can continue to receive your disability benefit.