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About 96 percent of America’s senior citizens have medicare insurance plans richmond va.[1] Medicare is America’s federal healthcare system for seniors aged 65 or older and people with certain disabilities. Unfortunately, there is a lot of misinformation about Medicare, making the enrollment process difficult for many.
With all of the different parts, plans, and enrollment periods, it is easy to get it all mixed up, which can, in return, result in late penalties or even enrolling in the wrong plan for your healthcare needs and budget. So, here are a few reasons why you should learn about Medicare before medicare enrollment auburn hills mi.
Avoid late penalties
There can be some confusion about when you should enroll in Medicare, as many believe you should enroll on the day you turn 65. Although you can enroll in Medicare on your 65th birthday, it is recommended that you apply for Medicare during the first three months of your Initial Enrollment Period.
Your Initial Enrollment Period begins three months before your 65th birthday and ends three months after your birth month, making your Initial Enrollment Period seven months long. For example, if you turn 65 in April, your Initial Enrollment Period will begin on January 1 and end on July 31.
If you apply for Medicare during the first three months of your Initial Enrollment Period, then your Medicare will begin on the first of your birthday month. If you were to miss your Initial Enrollment Period, you would likely be subject to a late enrollment penalty.
You must have creditable coverage for Medicare Parts A, B, and D in order to delay these Medicare parts. If you do not have creditable coverage and miss your Initial Enrollment Period, you will likely be subject to late enrollment penalties.
If you do not sign up for Medicare Part B during your Initial Enrollment Period, you may receive a 10% late enrollment penalty for every 12-months you were not enrolled but should have been. In other words, if you delay enrolling in Part B for three years, then you will have a 30 percent penalty added on top of your Part B premium, which you will continue to pay for the lifetime of your Part B policy.
Now, although Part D is considered “voluntary” drug coverage, there is also a Part D late enrollment penalty for failing to enroll in Part D during your Initial Enrollment Period. However, the Part D penalty is 1% (rounded to the nearest $0.10) for each month you did not have a Part D plan. You will pay the penalty for as long as you are enrolled in a Part D plan.
Now, you might be thinking, ‘what are these penalty percentages based off?’ They are based on your Medicare premiums.
Know your future costs and coverage
Original Medicare covers anything that is considered medically necessary. However, the coverage for your services will depend on which part of Medicare the service falls under. There are two parts to Original Medicare, Part A, and Part B.
Part A
Medicare Part A is your inpatient coverage. For example, Part A covers your hospital room and board when you are an inpatient, some medications in the hospital, hospice, and up to 20 days in a skilled nursing facility. With that said, you must meet the Part A deductible, which is $1,484 in 2021, before Medicare provides cost-sharing.
Many beneficiaries will not have to pay for Part A. If you have worked ten years (40 quarters) in the United States and paid payroll taxes, you will qualify for a $0 premium for Part A. However, if you do not have the qualifying working quarters, then you will pay around $470 per month for Part A.
Part B
Medicare Part B provides outpatient coverage for doctor’s visits, some vaccinations, lab testing, durable medical equipment, and more. There is a Part B deductible that you must meet before Part B provides cost-sharing, which is $203 in 2021. With that said, when the Part B deductible has been completed, Part B will cover 80% of Medicare-approved services, leaving you responsible for the remaining 20% coinsurance.
Now, unlike Medicare Part A, your working years do not qualify you for a premium-free Part B. In 2021, the base rate for Part B is $148.50 per month. However, if you fall in the high-income bracket, you likely will receive a higher Part B premium.
Discover which plan is best for you
Medicare does not cover all of its services at 100%. For example, as briefly mentioned earlier, Medicare Part B covers 80% of Medicare-approved services. The remaining 20% coinsurance you are responsible for can be quite expensive if you receive treatment like kidney dialysis. That is why many beneficiaries purchase one of the two Medicare alternatives for help with cost-sharing.
Medigap
Medigap plans, also known as a Medicare Supplement, are sold by private insurance companies and help cover the “gaps” in Medicare. A Medigap plan will help cover the costs that are initially passed on to you, such as deductibles, coinsurance, and copayments. With a Medigap plan, Medicare will pay first, and your Medigap will pay second.
Medigap plans leave you with little to no out-of-pocket costs. For example, if you have Medigap Plan G and you receive a Medicare-approved service, Medicare will pay 80%, and your Plan G will cover the remaining 20% of the bill (once you have paid the Part B deductible). Medigap plans also do not have networks. Therefore, you can travel anywhere in the United States with your Medigap plan. If you visit a doctor and they accept Medicare, then they must take your Medigap plan.
Medicare Advantage
Private health insurance companies also sell Medicare Advantage plans (Part C). If you enroll in a Medicare Advantage plan, you will receive your Part A, Part B, and Part D benefits through the carrier you enroll through instead of receiving your benefits through Medicare.
Medicare Advantage plans have networks of pharmacies and doctors where you can receive your healthcare services from. The two most popular Medicare Advantage plans are HMO and PPO plans. HMO plans have more restrictions, as you cannot go out-of-network for any of your services unless it’s an emergency. If you were to go out-of-network, prepare to pay 100% of the bill.
PPO Medicare Advantage plans are more flexible. With a PPO plan, you will still have a network of doctors you can visit. However, you can still receive services outside of the network, but it will come with a more expensive cost than in-network services. You can also find that many Medicare Advantage plans offer additional auxiliary benefits, such as dental, vision, and hearing benefits, which Original Medicare does not cover.
Summary
Medicare can be a confusing topic to learn, but if you do enough research in advance of your Medicare enrollment, you may find that this maze can be an easy one to follow. When you become familiar with the Medicare penalties, the different parts, plans, and costs, then you are off to a great start.
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