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.