Making Medicare Easy

Health Insurance is complicated, but it shouldn't have to be. Often times turning 65, seniors realize that at that stage of their life, Health Insurance is redefined completely. What's worse, the Centers for Medicare & Medicaid Services (CMS) passed regulations that made calling seniors to discuss medicare illegal. Instead, starting at age 64.5 you get bumbarded by mail related to medicare, and it can be hard to decipher. Below gives some guidance on your options ahead, and if we can help you look at further, complete an intake here.

What do I need?

Enrolling in medicare is akin to taking a road trip. There is an order in place of designated stops along the way and once satisfying stop 1 and 2, you'll hit a fork in the road to determine your destination. There is no one way or right way to be covered. This guide will break that down and give you greater insight as you work through the medicare process to solve your medicare needs.

Stop 1: Part A

If you are 65 and eligible for social security due to your work history, you should turn on Part A starting the month of your 65th birthday: even if you continue to have work coverage. Why? As you will see below, most seniors don't have to pay for it and it will even coordinate with your employer benefits.

You can start the enrollment process as soon as 3 months prior to your birth month leading up to your 65th birthday.

In its simplest form, Part A covers approximately 80% of inpatient hospital claims.

For more specifics on what is and isn't covered, Medicare.gov has a more specific list of coverages here.

Also, Medicare.gov breaks down what potential copays and deductibles are associated with Part A here. These gaps are typically filled with a Medicare Supplement (see below) or replaced by a medicare advantage (see below) program.

$0 in premium for about 99 percent of medicare beneficiaries since they or their spouse have at least 40 quarters of Medicare-covered employement. Part A premium is taken out of your paycheck through FICA Taxes.

*If you don't have 40 quarters, see the cost breakdown below.

Social Security is the agency who processes Medicare enrollments. If you have turned on social security already, then you can either turn on Part A at ssa.gov, in person at a local office, or call the SSA Medicare Hotline at (800) 772-1213.

If you have not started social security income, the safest way to ensure you don't accidently opt into any other programs than part A would be to call the SSA Medicare Hotline and let them help you.

Stop 2: Part B

Unlike Part A, which we recommend turning on as soon as eligible, Part B has a few more layers to peel back. You are eligible to start the enrollment process for Part B up to 3 months before your 65th birthday, but timing is everything. If you are on employer benefits after age 65, you can delay enrolling in Part B and avoid a penalty as long as you have qualifying coverage.

Starting three months before you lose qualifying coverage, you should start the process of enrolling in Part B making the effective date the first of the month following your loss of coverage.

Similar to Part A, in its simplest form, Part B covers approximately 80% of outpatient claims. Like seeing the doctor, specialist visits, lab work, etcetera.

For more specifics on what is and isn't covered, Medicare.gov has a more specific list of coverages here.

Also, Medicare.gov breaks down what potential copays and deductibles are associated with Part A here. These gaps are typically filled with a Medicare Supplement (see below) or replaced by a medicare advantage (see below) program.

$170.10 monthly for most medicare beneficiaries. Unlike Part A which collects premium from your paycheck, Part B premium is collected throughout retirement. The amount of premium is based upon looking at your income from two years ago.

If your income typically exceeds $91,000 if you are not married or $182,000 if you are, then take a look at this Medicare.gov table here as the cost will be higher.

Since Part B has a cost, defer enrolling in Part B until you no longer have employer coverage. If your employer premiums exceed $270 per month, then it may make sense to weight both options with a broker.

Once you are three months out from losing employer coverage (through yourself or spouses retirement) then follow the Part A recommendations to contact the SSA Medicare Hotline at (800) 772-1213 and get enrolled in Part B.

Stop 3: The Fork

Traditionally people have made a "left" toward medicare supplement, founded in 1980 with COBRA, when they were more concerned about, and willing to pay a premium for comprehensive medical coverage and less focused about the ancillary benefits.

As mentioned, Medicare Parts A & B cover approximately 80% of the medical costs a senior might incur. A Medicare Supplement, sometimes referred to as Medigap, helps to fill in the nooks and crannies of what is not covered in traditional Medicare. There are a range of Medicare Supplement plans (not to be confused with Medicare Parts) that the government has standardized, but individual insurance companies offer.

The most common plans consumers are asking about are plan F (if you turned 65 prior to 1/1/2020) or plan G. In the case of the latter, it fills in all expenses not covered by Medicare Parts A and B except a Part B deductible which for 2021 is $233. Other plans (A - N) can be found here.

If you are buying a supplement, you must get a stand alone drug plan. We look directly to Medicare.gov here. Plans start at roughly $10.00 and up and can be changed annually during the open enrollment period spanning from October 15th, through December 7th. The average cost, however is $32.74 accross the US and is used to assess a penalty to those who decide to opt out of drug coverage.

We recommend, for how low the base plan cost is, that when you do switch over to medicare to enroll in a drug plan right away. This is because if you don't there is a penalty for every month you do not have coverage and you pay that penalty for the rest of your life.

The reason? CMS recognized that people were going without drug coverage early in retirement and picking it up in later years. Some were caught without drug coverage when they needed it mid plan year, and others were shaving off years of coverage. To create a level playing field, say you skip the first 5 years of coverage, they will assess a penalty to recoup the 5 years of premium you would have paid. At $10+ per month, it's better to just have something in place for now.

If you do have underlying medical conditions, Medicare.gov allows you to put in your medications, doseages and your pharmacy to get actual out of pocket costs for the year. The link above is a great tool for comparing the all in costs of a plan, not just the plan premiums.

Traditionally people have made a "right" toward medicare advantage, founded in 1997, when they are more concerned about premiums, bundling coverage and don't have alot of medical conditions or do alot of traveling.

Unlike Option 1 where traditional Medicare (Parts A & B) covers 80% of medical expenses and a standalone Medicare Supplement (Plan G) fills in the nooks and crannies, CMS and Bill Clinton's administration realized in 1997 that with the baby boomer generation set to retire in droves, an 80% liability to the government was not sustainable.

Instead, the introduced Medicare Advantage (so named in 2003) as a solution where they would transfer all responsibility of medical claims to the insurance company through a Medicare Advantage Plan. You are still responsible for Part B premium, but the government reroutes that and on average $830 per member per month (source, pg 13) to the insurance company to have them cover your medical expenses. This is why many MA plans have no additional premium to the consumer. Premiums present themselves when ancillary benefit costs exceed the $830 allotted for the member.