Question from Ann:
I have questions regarding Medicare, and I’ve heard all kinds of information. I turn 65 next year and will continue to be covered by my husband’s health care plan. When do I have to sign up for Medicare? I’m worried about paying the late penalty if I don’t. Do I need to buy an additional plan as well? And finally, can you tell me the difference between Part A, Part B and Part D? Is there a Part C? As you can see, I’m confused.
Answer
Answer: Almost every question I get includes a statement about how confusing Medicare is. So confusing in fact, I need to remind everyone that my columns are not a substitute for a consultation with me or another of our licensed agents. Don’t call a company directly or enroll yourself in a plan online because the choice you make when going on Part B is one of life’s most important and can have serious financial implications that can last forever. I just spoke with someone who was solicited by the insurance company he had prior to turning 65. He was convinced the recommendation made by the representative was the best way to go. His wife, who is a client, insisted he call me before making that decision. Because of his medical conditions, soon to be increased income, and the amount of traveling he does, it would not have been in his best interest.
Ann, anyone who is or has a spouse working past age 65 and gets health insurance from an employer does not need to sign up for Medicare Part B unless the plan is with UPMC and there are less than 20 employees enrolled. If you opt out of Part B and continue on your husband’s plan, there will be no late enrollment penalty upon his retirement and/or disenrollment. You also don’t need to buy any additional Medicare plan. If he’s NOT working and getting benefits for both of you through a company he retired from, you MUST enroll in Medicare A and B! I recommend having us do a quick analysis to make sure if you should enroll in Part A, or both A and B, as well as determining if staying on his plan at work is the best value. I estimate that 15% to 25% of employees, in this case your husband, and almost 50% of spouses who have an option of employer coverage are better off to go on Medicare A and B and either a Supplement or an Advantage Plan, your two choices that limit your out-of-pocket medical expenses vs just Medicare alone. In fact, some employers provide financial incentives for opting out of their coverage!
Parts A and B are Original Medicare. A is Hospital coverage for inpatient stays and pays for Skilled Nursing coverage as well. B is Medical and pays 80% of all covered outpatient services. They both have gaps that can result in being billed tens of thousands of dollars. This is why a Supplement or Advantage Plan is necessary for the vast majority of people over 65 and older who don’t have access to employer health insurance.
Part C is the option to choose an Advantage Plan HMO or PPO which privatizes your Medicare. In other words, it completely changes the role of Original Medicare. Instead of Medicare A paying the majority of the cost for a hospitalization and Part B paying 80% for all covered outpatient services, they pay a private insurance company of your choice approximately $12,000 per year to take on the responsibility of supplying a health care package and paying all claims, minus your cost sharing for medical services. Those can be as small as $5 to $25 for blood work and X-Rays, in the $200 range for outpatient surgeries, MRIs and CT scans; $200 to $1,800 for a 5 day or longer hospital stay; to thousands for chemotherapy, other infused or injected drugs, Skilled Nursing, and a few other services. What makes Advantage Plans so popular is their low monthly premiums and extra benefits they include such as dental, vision, hearing, OTC allowances, no cost gym memberships, and more.
Supplements and Advantage Plans (Part C) are different in many ways. Understanding these differences, the risks, rewards, pros, and cons of both types of plans is by far the most important information one needs in order to make the best decision. I cringe when I hear people say what Ann did; “I’m hearing all kinds of information,” or “my friend says I should choose XYZ plan, and she loves it.” Please don’t take advice from neighbors, friends, family, your doctor, etc. Make an appointment with us. There’s never a fee whether we spend five minutes or two hours figuring out the best solution for your wants and needs when it comes to health coverage and Medicare. You will also never be given a recommendation on a plan because it pays the most commission, which unfortunately is far too prevalent in my industry.
Part D is prescription coverage that Original Medicare does not provide. Those who choose Supplements must also purchase separate coverage for prescriptions and people who go with Advantage Plans have that built in with their medical benefits.
As far as when to apply for Medicare, those who are best to stay on an employer plan can wait until retirement or when the time comes where Medicare and a Supplement are a better value. I suggest starting that process about four months prior to the date you know employer coverage is ending and making a call to one of our offices so we can walk you through exactly what needs to be done to enroll in Parts A and/or B. Those who need Medicare at age 65 and are already collecting Social Security don’t need to do anything. A card will be mailed automatically about 100 days before the 1st day of the month your birthday falls. Those not collecting Social Security must apply for Medicare. Again, you’re welcome to reach out to us so we can walk you through the most efficient and easiest way to do that.
Make An Appointment
If you would like to make an appointment for a no cost consultation to go over Medicare options, individual ACA marketplace plans, you’re an employer and would like a second opinion on your group policy, or are interested in life insurance, give us a call or email me personally at aaron@getyourbestplan.com. And keep the great column questions coming! Also, I am now licensed in over 20 states and able to help people choose and enroll in Advantage, Supplement, and Part D plans throughout the country.
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Thank you!
If you have any questions or concerns regarding this column topic, or would like to make an appointment for a no-cost consultation, please feel free to give us a call – we would be happy to help. I’d like to remind everyone that I do a live call-in talk show called Medicare A to Z every 1st and 3rd Monday of the month on WMBS Uniontown, 590AM and 101.1FM, from 1 to 3 PM. You can listen in on their website, wmbs590.com.
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