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Medicare eligibility begins for most people at age 65. If you are disabled it can begin at any age.
As you approach your 65th birthday, you will begin to receive materials from many Medicare Prescription Drug, Advantage and Supplement carriers telling you about their products. It can be very confusing. We will happily explain it clearly and help you make your decision.
There are two paths to comprehensive coverage once you are eligible for Medicare.
The most common approach is to sign up for Medicare Part A and Part B, then apply for a Supplement Plan and a Prescription Drug Plan (PDP). Another option is to set up a Medicare Advantage plan, which combines the administration of your Medicare benefits in an HMO arrangement including your hospital insurance, medical insurance and prescription drug coverage.
First, know that Medicare is a good thing. It is inexpensive compared to the insurance you are used to and covers much more. This, in combination with a supplement, can pay 100% of your Medicare covered expenses. An Advantage plan takes the place of Medicare. It costs less but you pay copayments when you visit the doctor or obtain other services.
Part D is the drug plan. You must buy a Part D plan. If you do not, you will not have coverage for prescription drugs. Furthermore, you will pay a penalty on an ongoing basis if you decide to buy it at some point in the future. Also, you can only purchase this once per year and it is effective on January 1st.
For an overview of tips on choosing a Medicare Supplement Plan, you may want to read “Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare”.
If you are a high-income individual, you may want to read “Medicare Premiums: Rules For Higher-Income Beneficiaries”.
Some people age 65 are not eligible for Medicare but they may be eligible for Covered California or to buy Medicare. We can help with that too. Please know that it is very important to time entry into the Medicare Market and purchase of Supplements and Advantage plans. Please contact us between 3 months before your 65th birthday (this is best) and, at the very latest, 5 months after.
You are eligible as soon as you turn 65. However, if you are still working and your company provides benefits, you can delay signing up until you are ready to leave the company. If your company has under 20 employees, let us explain.
4 months prior to the month of your birth, you can go to Medicare.gov and apply online for Medicare. If you are already receiving Social Security, a Medicare card will be sent to you automatically. If the card shows Part A and Part B and you don't want Part B yet, you'll need to fix this with the Social Security Department.
Part A is free. Part B for 2015 has a base cost of $104.90 per month. This is based on an adjusted gross income of $85,000 for an individual and $170,000 for a family. If your income is higher, the cost will be higher. Here's the link for higher incomes. Part D is a separate product for prescription drug coverage, and the government cost for Part D is free but it can cost if you are a higher earner.
Medicare definitely does not pay for everything, and it is a good idea to buy a Medicare Supplement (Medigap) or a Medicare Advantage plan to augment Medicare.
Advantage plans are typically HMO-type programs where you select a primary care physician and are referred to specialists and hospitals by that physician. Kaiser Senior Advantage is the primary example of this that most people know about.
A Supplement plan allows you to any provider nationwide as long as they accept Medicare patients. A Plan F is the most comprehensive Supplemental plan and covers 100% of what Medicare Part A and Part B do not cover for any claims that are a Medicare-permitted expense. There are other options to reduce costs.
If you buy an Advantage plan, the cost of the drug plan is included in your premium. If you buy a Supplement plan, you will need to purchase a separate Part D Prescription Drug Plan (PDP). You can find a plan using Medicare.gov, or we can assist you. We can help you find a good prescription plan as a courtesy.
After you and the insurance company have paid $2,960 towards the cost of your drugs, you alone are responsible for the remaining costs before leaving the gap. These vary from carrier to carrier. Sometimes, the insurance company will pay for generic drugs needed during this period, which is referred to as the "gap" or the "donut hole". After you have spent [x] dollars, the plan starts paying for your drugs again and your copayments are greatly reduced.
Many carriers want your business. Please bear in mind that all Supplement plans with a given plan type such as a Plan F are the same, no matter which company you buy them from. Some carriers will have value added features. Let us decipher this for you and find you the plan at the lowest cost that works for you. In California, you can switch this plan every year on your birthday if you wish.
Supplement plans allow you to switch on your birthday to a plan of equal or lesser value. Medicare Advantage and Drug plans share the same open enrollment period each year, usually from October 15th through December 7th. All of those changes are effective January 1st, and the Supplement changes are effective on the first of the month after your birthday.
