Medicare 101

If the rules of Medicare confuse you, you are not alone

By Deborah Jeanne Sergeant

Yes, it’s confusing. An entire industry has developed around explaining the parameters of Medicare to adults anticipating their time to sign up at age 65.

While no one is required by law to sign up for Medicare, it is vital to understand the basics of Medicare to avoid lifelong monthly penalties should you decide to sign up later.

In general, people receiving Social Security income (SSI) for two years for a disability are automatically enrolled. Those who are aged 65 are eligible to enroll in Medicare. The age-related enrollment period is three months before and after the person’s birth month and the birth month.

A person currently with group insurance supplied by an employer of 20 or more can remain on their current plans and wait until they retire and thus lose their coverage. The same applies to a spouse on their plan. They do not have to wait until the next open enrollment period, which runs Oct. 15 through Dec. 7, because loss of coverage constitutes a qualifying event. Coverage under COBRA does not qualify.

If they don’t like their current insurance, they may choose to drop it in favor of Medicare.

Medicare plans are designated as “Parts.”

• Part A covers hospital care and some home care. If you have worked 40 quarters in your lifetime, it’s free.

• Part B covers doctor visits, diagnostic services and other outpatient care. The base premium is $144.60 per month. Individuals making $87,000 or more or couples making $174,000 or more pay higher premiums. It’s on an income-based, tiered structure, based on income figures from two years ago.

Parts A and B together are also known as “Original Medicare.” It is not mandatory to have Medicare Part B.

After age 65, those using the New York State Marketplace must sign up for Medicare. For those receiving Social Security, the premiums are deducted from their monthly checks. Those not receiving Social Security pay quarterly.

Those who do not enroll in Medicare on time will pay a penalty of 10% of the premium for each 12-month period they could have been enrolled in Part B. Someone who waited two years would pay 20% more; those waiting three years would pay 30% more per month for the duration of their enrollment.

A recent change to Medicare is the Part B giveback. It rolls money into the Social Security check toward the Part B premium.

• Part C, also known as Medicare Advantage, includes amenities like vision, dental care, wellness rewards and fitness. About 36% of those enrolled in Medicare are in Medicare Advantage, as of Sept. 29, 2020.

“By having a C plan, they do case management services and coordinate benefits,” said Christine Stanford, senior director of operations at Loretto. “Typically, the co-pays can be less and you can pick plans more geared toward your health needs. They all typically include prescriptions. There are other plans just for people who are in skilled nursing facilities.”

The Part C plans are offered through private insurers like Blue Cross Blue Shield, Humana, Aetna, Cigna and United HealthCare and include Parts A and B. Most also include Part D.

• Part D is the prescription drug plan offered through private insurance companies. New York’s EPIC program works with Part D to make prescriptions more affordable. Anyone enrolled in EPIC may change their Medicare at any time, not only during enrollment periods.

• Part F has no deductibles and pays all coinsurance. It covers 80% of expenses.

Supplement plans, also called Medigap, fill in areas that Medicare doesn’t cover all medications.

Where you spend your time also matters. If you travel a lot or snowbird during the winter, make sure your plan covers non-emergency care elsewhere. Emergency care is nearly always covered.

That is why seeing a broker can make a big difference in how well you are covered and how much it will cost.

“There are many private businesses offering services at no charge,” Stanford said. “You don’t have to see a broker. At Medicare.gov, you can compare plans, see what’s available in your area, compare costs and premiums to choose the plan that best meets your needs.

“You’d only need a broker if you’re going for Part C. There are benefits to using a broker. The brokers can help find what plan works best and they’re Medicare experts and can provide you with lots of different companies’ options. It doesn’t typically cost anything and they can help you figure out what the best plan is if you need certain drugs as far as overall costs. They typically represent multiple companies so you can compare plans with one individual.

Shes recommends giving a broker a list of medication so that the broker can find what plan will save the most money.