Is Signing Up For Medicare Mandatory
In some cases, yes.
If you have coverage under the Affordable Care Act, COBRA through a past employer or TRICARE for retired military members, youre required to enroll in Medicare when you turn 65.
You may not have to sign up for Medicare right away if youre still working and enrolled in your employers group health plan coverage or if your spouse is still working and youre covered under their plan. But be sure to check with your employer. Some companies will require you to enroll in Part A and Part B and use your employer insurance as secondary coverage.
Be sure youre very clear on the rules. The penalties for late enrollment are steep and, in some cases, can increase your Medicare costs for the rest of your life.
Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. Rachel Christian is a senior writer and Certified Educator in Personal Finance.
How Do I Qualify For The Giveback
You may qualify for a premium reduction if you:
- Are enrolled in Part A and Part B
- Do not rely on government or other assistance for your Part B premium
- Live in the zip code service area of a plan that offers this program
- Enroll in an MA plan that provides a giveback benefit
Because not all plans offer this benefit, it’s important to do your research and compare plans, benefits, and costs to ensure you’re making the best decision for you.
Medicare Part A Hospital Coverage
- What Medicare Part A covers: Part A covers expenses associated with hospital care. It includes coverage for services like nursing care and hospital stays. It also covers some hospital-related care that takes place outside a hospital setting. For example, skilled nursing care after you leave the hospital.
- What Medicare Part A costs: You generally wont have to pay a monthly premium for Medicare Part A if you or your spouse paid Medicare payroll taxes for 40 quarters or more. But you do need to pay deductibles before Medicare will cover any hospitalization costs.
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What Is Medicare Part B Medical Insurance
Medicare Part B provides outpatient/medical coverage. The list below provides a summary of Part B-covered services and coverage rules:
This list includes commonly covered services and items, but it is not a complete list. Keep in mind that Medicare does not usually pay the full cost of your care, and you will likely be responsible for some portion of the cost-sharing for Medicare-covered services.
The 2022 Part-B premium is $170.10 per month
What Is Open Enrollment
Medicare open enrollment, also known as the annual election period, runs from Oct. 15 through Dec. 7 each year.
Its the time when people who are already enrolled in Medicare can make changes to their plans.
If youre happy with your coverage, you dont need to do anything.
During open enrollment, you can:
- Switch from Original Medicare to Medicare Advantage, or vice versa.
- Switch to a different Medicare Advantage plan.
- Sign up for Part D if you didnt enroll when you first became eligible.
- Change to a different Part D plan.
Whatever changes you make wont go into effect until Jan. 1. So if you make changes during the 2021 open enrollment period, your new benefits will kick in January 2022.
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How Long Does Medicare Coverage Last For Home Health Care
Medicare coverage for home health care is designed for those who need intermittent skilled nursing care for a short period. It isnt meant for an extended period.
Intermittent is defined as care thats needed for:
- Fewer than 8 hours each day
- Fewer than 7 days a week
- Up to 21 days
The 21-day limit for Medicare-covered home health care may be extended if your doctor can predict how much longer youll need skilled nursing care.
How Do I Choose A Plan
The right plan for you will depend on your budget and healthcare needs.
For example, if you take multiple prescriptions, you might want to purchase a comprehensive Part D plan with a low deductible. If you know youll need vision care services, you might want to select a Medicare Advantage plan that offers vision coverage.
The options available to you will depend on your city, region, or state, but most areas have a variety of plans to choose from at different price points.
Tips for selecting plans that meet your needs
- Assess your current and potential healthcare needs. Are there doctors, facilities, or medications that you cant compromise on for your care? This may impact your policy choice, particularly when deciding between original Medicare and Medicare Advantage.
- Consider your income. If you have a fixed or limited income, paying monthly premiums may be difficult. However, if you need care that only Medicare Advantage would cover, this might be a good option to save costs in the long run.
- Look for cost savings programs. You may qualify for certain programs to help with your costs, including Medicaid and Extra Help.
- Find the right plan. Use Medicares plan finder tool to compare available Medicare Advantage plans in your area. You can search by prescription drugs you need, as well as covered providers and services.
Also Check: What Is The Medicare Supplement Plan
What The Letters Mean For The Parts Of Medicare
The four different parts of Medicare are each identified by a letter.
- Medicare Part A is hospital insurance and provides coverage for inpatient stays at hospitals and skilled nursing care facilities, among other inpatient services.
- Medicare Part B is medical insurance and provides coverage for outpatient doctors appointments and medical devices.
- Medicare Part C, also known as Medicare Advantage, provides coverage for everything found in Part A and Part B through one plan provided by a private insurer. Many Medicare Advantage plans may also cover additional benefits not covered by Part A and Part B, such as prescription drugs, dental, vision, hearing, wellness programs like SilverSneakers and more.
- Medicare Part D provides coverage exclusively for prescription drugs.You can visit MyRxPlans.com to compare Part D plans available where you live and enroll in a Medicare prescription drug plan online in as little as 10 minutes.1
Medicare Supplement Insurance, also called Medigap, uses a letter system to identify its plans. Medicare Supplement Insurance is used in conjunction with Part A and Part B of Medicare to provide coverage for certain out-of-pocket expenses like some Medicare deductibles and coinsurance.
There are 10 Medicare Supplement Plans to choose from, identified by letters: Plan A, B, C, D, F, G, K, L, M and N. Note that Medigap coverage options are referred to as plan as opposed to part .
Quality Of Beneficiary Services
A 2001 study by the Government Accountability Office evaluated the quality of responses given by Medicare contractor customer service representatives to provider questions. The evaluators assembled a list of questions, which they asked during a random sampling of calls to Medicare contractors. The rate of complete, accurate information provided by Medicare customer service representatives was 15%. Since then, steps have been taken to improve the quality of customer service given by Medicare contractors, specifically the 1-800-MEDICARE contractor. As a result, 1-800-MEDICARE customer service representatives have seen an increase in training, quality assurance monitoring has significantly increased, and a customer satisfaction survey is offered to random callers.
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A Few Words On Medigap
Medigap is Medicare supplemental insurance that can ameliorate some of the costs that aren’t covered by Medicare Parts A and B. This insurance is provided by private companies, and typically requires that a beneficiary already have Medicare Parts A and B to enroll. Premiums are generally paid monthly, and it’s best to enroll as close as possible to enrollment in Parts A and B.
C: Medicare Advantage Plans
With the passage of the Balanced Budget Act of 1997, Medicare beneficiaries were formally given the option to receive their Original Medicare benefits through capitated health insurance Part C health plans, instead of through the Original fee for service Medicare payment system. Many had previously had that option via a series of demonstration projects that dated back to the early 1970s. These Part C plans were initially known in 1997 as “Medicare+Choice”. As of the Medicare Modernization Act of 2003, most “Medicare+Choice” plans were re-branded as “Medicare Advantage” plans . Other plan types, such as 1876 Cost plans, are also available in limited areas of the country. Cost plans are not Medicare Advantage plans and are not capitated. Instead, beneficiaries keep their Original Medicare benefits while their sponsor administers their Part A and Part B benefits. The sponsor of a Part C plan could be an integrated health delivery system or spin-out, a union, a religious organization, an insurance company or other type of organization.
The intention of both the 1997 and 2003 law was that the differences between fee for service and capitated fee beneficiaries would reach parity over time and that has mostly been achieved, given that it can never literally be achieved without a major reform of Medicare because the Part C capitated fee in one year is based on the fee for service spending the previous year.
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Enrollment Period For Medicare Part B
Youre eligible to enroll in Medicare Part B during the seven-month period around your 65th birthdaybeginning three months before the month of your 65th birthday, including your birthday month, and lasting up to three months after. This is called your Initial Enrollment Period . Enrollment in Part B is automatic if you are receiving Social Security or Railroad Retirement Board benefits.
What Is The Part B Premium Reduction Benefit
When you’re enrolled in Medicare Part B, you must pay a monthly premium of $170.10. The giveback benefit, or Part B premium reduction, is when the Part C Medicare Advantage plan reduces the amount you pay toward that premium. Your reduction could range from less than $1 to the full premium amount.
Even though you’re paying less for the monthly premium, you don’t technically get money back. Instead, you just pay the reduced amount and are saving the amount you’d normally pay.
If your premium comes out of your Social Security check, your payment will reflect the lower amount. If you don’t pay that way, the giveback benefit would be credited to your monthly statement. Instead of paying the full $148.50, you’d only pay the amount with the giveback benefit included.
For example, if you typically pay $170.10 per month but your MA plan’s giveback benefit is $50, you don’t get $50 back each month. Instead, you’d only pay $120.10 per month, keeping that $50 in your wallet. If your plan offers a full $170.10 refund, you wouldn’t have a Part B monthly premium to pay.
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Costs And Funding Challenges
Over the long-term, Medicare faces significant financial challenges because of rising overall health care costs, increasing enrollment as the population ages, and a decreasing ratio of workers to enrollees. Total Medicare spending is projected to increase from $523 billion in 2010 to around $900 billion by 2020. From 2010 to 2030, Medicare enrollment is projected to increase dramatically, from 47 million to 79 million, and the ratio of workers to enrollees is expected to decrease from 3.7 to 2.4. However, the ratio of workers to retirees has declined steadily for decades, and social insurance systems have remained sustainable due to rising worker productivity. There is some evidence that productivity gains will continue to offset demographic trends in the near future.
The Congressional Budget Office wrote in 2008 that “future growth in spending per beneficiary for Medicare and Medicaidthe federal government’s major health care programswill be the most important determinant of long-term trends in federal spending. Changing those programs in ways that reduce the growth of costswhich will be difficult, in part because of the complexity of health policy choicesis ultimately the nation’s central long-term challenge in setting federal fiscal policy.”
Around 40% Of Medicare Advantage Plans Have No Monthly Premium But Did You Know Some Plans Actually Reduce Your Part B Premium
The Medicare giveback benefit, or Part B premium reduction plan, is becoming more available and popular among beneficiaries. Though not an official Medicare program, this benefit is offered by some Medicare Advantage plans and covers some or all of your Part B monthly premium .
While not all plans offer this benefit, it’s possible to find one where you’d pay a reduced premium amount up to $170. This can help maximize your savings while on Medicare, though there are a number of considerations when deciding if these plans are right for you. Read on to learn more about the giveback benefit and how you could qualify.
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Does Medicare Cover Ambulance Service
On average, 80% of your ambulance service costs are covered by Medicare. This includes both emergency and non-emergency services, such as transportation for end-stage renal disease. Medicare pays 80% of the Medicare-approved costs after youve satisfied any deductibles your plan requires.
Ambulance fees can sometimes be more than this amount. However, most ambulance companies accept the Medicare-approved rate, although you would still have to pay the Medicare deductible even if you havent reached your yearly Medicare threshold.
When Can You Enroll In Medicare Part B
You can sign up for Medicare Part B during the 7-month period that begins 3 months before your 65th birthday and 3 three months after that birthday.
If you have ALS, you may enroll in Medicare as soon as your Social Security disability insurance goes into effect.
If you have ESRD, you can enroll for Medicare starting on the first day of your fourth month of dialysis. If you do home dialysis, you dont have to wait 4 months and can apply immediately.
You may also apply immediately for Medicare if youre hospitalized for a kidney transplant.
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How Does Medicare Supplement Work
Out of the 64 million people in the United States who have traditional Medicare benefits, 81 percent of them have one sort of Medicare supplement insurance. These supplemental plans may include those that are provided by an employer, Medigap plans, or supplemental health care coverage through Medicaid.
Medicare supplement insurance policies help fill in the gaps left by Original Medicare health care insurance. For many people, Medicare Supplement, also known as Medigap, insurance helps them economically by paying some of the out-of-pocket costs associated with Original Medicare.
If you are considering a Medicare Supplement plan and would like to know how it works, what it covers, and how much it may cost, here are some of the important facts you should know.
Who is eligible for Medicare Supplement insurance?
In order to purchase a Medicare Supplement plan, you must be 65 years of age and enrolled in Part B. To be eligible for Medicare, you must be at least 65 years old, a citizen of the United States or permanent legal resident for at least five consecutive years. Also, you, or your spouse, must have worked and paid federal taxes for at least ten years .
When you turn 65 and enroll in Part B, you will have a 6-month Initial Enrollment Period to purchase any Medigap plan sold in your state. During this time, you have a guaranteed issue right to buy any plan available. They are required to accept you and cannot charge you more due to any pre-existing conditions.
How Do I Shop For A Medigap Policy
There are a few ways to find out what policies are available in your area.
Enter your ZIP code on the Medicare search tool to see which plans are offered in your state.
Contact your State Health Insurance Assistance Program to find out which insurance companies sell Medigap policies in your state. Ask for a “Medigap rate comparison shopping guide.” This program can provide free help in choosing a suitable Medigap policy.
Shop around at a few insurance companies and compare their prices for your preferred plan. In its guide to choosing a Medigap policy, CMS suggests you ask each company these questions:
Are you licensed in my state?
Do you sell the Medigap plan I’m interested in?
Do you use medical underwriting for this Medigap plan?
Is there a waiting period for pre-existing conditions?
Is this policy priced using community rating, issue-age rating, or attained-age rating?
What’s the premium based on my age?
Has the premium for this Medigap policy increased in the last 3 years? If so, how much?
Are there any discounts or additional benefits?
Once youve chosen a company, youre ready to fill out your application for your Medigap policy.
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Medicare Part B: Medical Insurance
Medicare Part B is medical insurance, and is the other half of Original Medicare. It pays for medically necessary services that you need to diagnose or treat your condition that meet the accepted standards of care. It also covers preventative care, such as most vaccines and early-detection screenings.
Medicare Part B coverage includes:
- Yearly wellness doctor visits
- Ground ambulance transportation
- Durable medical equipment, including blood sugar monitors and wheelchairs but not medical alert systems
Unlike Medicare Part A, which typically doesnt have a premium, you have to pay a monthly premium for Medicare Part B. According to the U.S. Centers for Medicare & Medicaid Services, the Part B premium in 2021 is $148.50 per month.