Top 8 Things You Should Know About Medicare
Being that Medicare is such a complex program, it can
be overwhelming when you are first learning about it. That’s why we have
created a list of the top 8 things you should know about Medicare.
Knowing these 8 things can help you save money, avoid
complications, and prepare you for your next step with Medicare.
1. Medicare is Not Free
Many Medicare beneficiaries assume that Medicare is
completely paid for because they have been paying into it for all these years
via payroll taxes. However, when you pay into Medicare, you are only paying
into Medicare Part A. If you (or your spouse) have worked for at least 40
quarters during your working years here in the USA, you will earn premium-free
Part A.
Part B and Part D on the other hand, need to be paid
for. Medicare Part B and Part D are based on your household gross income. Some
people with higher incomes will pay more in the form of an IRMAA (Income
Related Monthly Adjustment Amount). Most people pay the
base rate for Medicare Part B, which is $134/month in 2018.
The national average for Part D monthly premiums is
around $35 in 2018. However, you will find a wide range of prices for plans in
your area and you can choose your own plan.
2. You Continue to Pay for Part B When You Have a
Medicare Advantage Plan or Medigap Plan
No matter which type of gap coverage you enroll in,
you must continue to be enrolled in Part A and Part B. Sometimes people think
that if they enroll in a Medicare Advantage plan that they can skip paying Part
B. This is not the case.
3. If You Don’t Enroll in Medicare When You First
Become Eligible, You Can Be Penalized
You have 7 months total to enroll
in Medicare when you first become eligible. The 7-month period begins three
months before the month you turn 65 and ends three months after the month you
turn 65. If you don’t enroll in Medicare during this time and you don’t have
creditable coverage to back you up, you will be penalized.
The most popular form of creditable coverage is
employer coverage because you are continuing to work past 65 for a large
employer. Employers with more than 20 employees will pay primary to Medicare.
This means that individuals with large employer coverage can delay enrollment
into Medicare without penalty.
4. The Annual Election Period is for Medicare
Advantage and Drug Plans
The Annual Election Period (AEP) begins October 15th
and ends December 7th. During this time, you are able to make
changes to your Medicare Advantage plans and Part D drug plans. This is not a
time that you can change your Medigap plan without answering health questions.
You are able to change Medigap plans anytime
throughout the year, and unless you are in your open enrollment, have a
guaranteed issue window, or live in a specific state with lenient rules, you
will have to answer health questions to apply for a new Medigap plan.
5. You Shouldn’t Ignore Your ANOC
If you have a Medicare Advantage plan or a Part D drug
plan, you will receive an ANOC (Annual Notice of Change). Your ANOC is a letter
you get from your carrier in September. This letter will let you know all the
changes that will be made to your plan effective January 1st. These
may include changes to the benefits, premiums, copays, and networks for your
current plan.
You will want to review your ANOC thoroughly to decide whether you want to change plans based on their changes. If you don’t review your ANOC and let your plan auto-renew, you could be stuck in a plan that you might not want anymore. You won’t be able to change plans again until the following AEP.
6. Medigap Plans are Standardized
The specific Medigap plan that you choose will have
the same coverage no matter the carrier you enroll through. For instance,
Medigap Plan G with Aetna will have the same coverage as Medigap Plan G through
United Healthcare.
This means that once you have decided which Medigap
plan you want, you’ll want to focus on the rate quotes from each company to
find the least expensive option.
7. If Your Doctor Accepts Medicare As Payment, They
Will Accept Your Medigap Plan
Some people ask their doctor’s office whether or not
they accept their insurance carrier when they have a Medigap plan. The staff
member might assume you have a Medicare Advantage plan instead and if they
don’t accept that carrier, they’ll say no.
However, Medigap plans are different than Medicare
Advantage plans. Your Medigap plan pays after Medicare. Therefore, your doctor
never bills your carrier directly; Medicare does. The only question you need to
ask your doctor is if they accept Original Medicare. Because if they do, they
will accept your Medigap plan, regardless of which company you bought it from.
8. You Should Consider Working with a Medicare Broker
A Medicare broker is an insurance brokerage that
specializes in Medicare. A brokerage represents multiple insurance carriers. If
you work with a Medicare broker, they are able to compare carriers and plans
side by side to ensure you are getting the most cost-effective option. Working
with a broker costs you nothing and the broker can guide you through the plan
options, explaining things that you may not otherwise know about.
