What is Medicare?
Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities and people with end stage renal disease. The different parts of Medicare pay for 80% of specific services.
Medicare Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
Medicare Part B covers certain doctors' services, outpatient care, medical supplies and preventative services.
Medicare Part C* is a type of Medicare health plan offered by private insurance companies that contract with Medicare. Medicare Advantage Plans provide all of your Part A and Part B benefits. Medicare Advantage Plans include:
Health Maintenance Organizations
Preferred Provider Organizations
Private Fee-for-Service Plans
Special Needs Plans
Medicare Medical Savings Account Plans
If you are enrolled in a Medicare Advantage Plan:
Most Medicare services are covered through the plan
Medicare services are not paid for by Original Medicare (Part A and B)
Most Medicare Advantage Plans offer prescription coverage.
Medicare Part D* adds prescription coverage to
Some Medicare Cost PLans
Some Medicare Private-Fee-for-Service Plans
Medicare Medical Savings Account Plans
* These plans are offered by insurance companies and other private companies approved and regulated by Medicare.
How do I get Parts A & B? Some people get Medicare Part A and Medicare Part B automatically and other people have to sign up for it. In most cases, it depends on whether you are getting Social Security benefits. When you are first eligible for Medicare, you have a 7-month enrollment period that:
Begins 3 months before the month you turn 65
Includes the month you turn 65
Ends 3 months after the month you turn 65
How do I find out what services Medicare covers? They have a search function on their website which allows you to view a variety of coverages. Simply go here.
What if I am not retired yet or am covered under my spouse's employer sponsored insurance? As long as you have credible (this does not include COBRA or retiree health plans) coverage based on current employment you will not incur a penalty if you do not sign up for Medicare during your Initial Enrollment Period (IEP).
Is there a penalty if I don't sign up for Medicare? See above. If you do not have credible other coverage your part A premium may go up 10%, which you will have to pay for twice the number of years you could have had A but didn't sign up. The same applies to Part B, however your monthly premium may go up 10% for each full 12-month period that you did not have B. You will pay this penalty for the duration of your coverage with Part B.
How does retiree coverage work with Medicare? Since Medicare pays first after you retire, your retiree coverage is likely to be similar to coverage under Medicare Supplement Insurance (Medigap). Retiree coverage isn't the same thing as a Medigap policy but, like a Medigap policy, it usually offers benefits that fill in some of Medicare's gaps in coverage—like co-insurance and deductibles. Sometimes retiree coverage includes extra benefits, like coverage for extra days in the hospital.
Find out if you can continue your employer coverage after you retire. Generally, when you have retiree coverage from an employer or union, they control this coverage. Employers aren't required to provide retiree coverage, and they can change benefits or premiums, or even cancel coverage.
Find out the price and benefits of the retiree coverage, including whether it includes coverage for your spouse. Your employer or union may offer retiree coverage for you and/or your spouse that limits how much it will pay. It might only provide "stop loss" coverage, which starts paying your out-of-pocket costs only when they reach a maximum amount.
Find out what happens to your retiree coverage when you're eligible for Medicare. For example, retiree coverage might not pay your medical costs during any period in which you were eligible for Medicare but didn't sign up for it. When you become eligible for Medicare, you will need to enroll in both Medicare Part A and Part B to get full benefits from your retiree coverage.
Find out what effect your continued coverage as a retiree will have on both your health coverage and your spouse's health coverage. If you're not sure how your retiree coverage works with Medicare, get a copy of your plan's benefit booklet, or look at the summary plan description provided by your employer or union. You can also call your employer's benefits administrator and ask how the plan pays when you have Medicare. You may want to talk to your State Health Insurance Assistance Program (SHIP) for advice about whether to buy a Medicare Supplement Insurance (Medigap) policy.
If your former employer goes bankrupt or out of business, Federal COBRA rules may protect you if any other company within the same corporate organization still offers a group health plan to its employees. That plan is required to offer you COBRA continuation coverage. If you can't get COBRA continuation coverage, you may have the right to buy a Medigap policy even if you're no longer in your Medigap open enrollment period.
What is a Medicare supplement (Medigap) policy? These policies work with your Medicare Part A and Part B to limit your out-of-pocket expenses. If you purchase a comprehensive Medicare supplement policy, such as a Plan F or Innovative F, the plan will pick up the remaining 20% that Medicare did not pay.
Is there a penalty if I don't sign up for a Medigap policy? No, but if you skip your IEP you will miss your guaranteed issue period and be required to go through underwriting. If you have health concerns, you don’t want to go through underwriting in the future and face possible denial. There are a few carriers that allow you to apply and go through underwriting at any time during the year but usually you must wait until your next birthday month.
How do I find the best Medigap policy for me? Review this chart or contact our office and we will explain your available options and help you choose the plan that suits your needs.
Do Medigap policies cover foreign travel? Your Medigap policy may offer additional coverage for health care services or supplies that you get outside the U.S. If you have Medigap Plan C, D, E, F, G, H, I, J, M or N, your plan:
Covers foreign travel emergency care if it begins during the first 60 days of your trip, and if Medicare doesn't otherwise cover the care.
Foreign travel emergency coverage with Medigap policies has a lifetime limit of $50,000.
Is there a penalty if I don't sign up for Part D? Yes. You may owe a late enrollment penalty if you are without Part D coverage for 63 days or more after your Initial Enrollment Period (IEP) is over. If you sign up for a Medicare Advantage Plan, a Medicare health plan that offers prescription drug coverage or have creditable prescription coverage, this penalty is waived.
How much is the Part D Penalty? The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage. Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($35.02 in 2018; $33.19 in 2019) times the number of full, uncovered months you didn't have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.
Medicare Supplement Plans (Medi-Gap)
Every Medigap policy must follow federal and state laws designed to protect you, and it must be clearly identified as "Medicare Supplement Insurance." Insurance companies can sell you only a "standardized" policy identified in most states by letters.
All policies offer the same basic benefits but some offer additional benefits, so you can choose which one meets your needs. In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized in a different way.
Each insurance company decides which Medigap policies it wants to sell, although state laws might affect which ones they offer. Insurance companies that sell Medigap policies:
Don't have to offer every Medigap plan
Must offer Medigap Plan A if they offer any Medigap policy
Must also offer Plan C or Plan F if they offer any plan
The chart below shows basic information about the different benefits Medigap policies cover.
Yes = the plan covers 100% of this benefit
No = the policy doesn't cover that benefit
% = the plan covers that percentage of this benefit
N/A = not applicable
* Plan F also offers a high-deductible plan. If you choose this option, this means you must pay for Medicare-covered costs up to the deductible amount of $2,240 in 2018 before your Medigap plan pays anything.
** After you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.
*** Plan N pays 100% of the Part B coinsurance, except for a co-payment of up to $20 for some office visits and up to a $50 co-payment for emergency room visits that don't result in inpatient admission
Excess charges- If you have Original Medicare, and the amount a doctor or other healthcare provider is legally permitted to charge is higher than the Medicare-approved amount, the difference is called the excess charge and is your responsibility, unless you select a plan that indicates "Yes", it does cover those charges.
Please note: effective 1/1/2020 Medicare Plan F's are no longer for sale for those turning 65 after 1/1/2020.
Medicare Supplement Open Enrollment Period
AKA Birthday Rule
The Medicare Birthday Rule is a new law that was introduced on June 1, 2010. During your Birthday Rule, residents of California are given the opportunity to make changes to their current Medicare Supplement Policies.
A 30-day open enrollment period follows your birthday each year. This is also a guaranteed issue time, meaning as long as your change to a plan of equal or lesser value you do not have to go through underwriting and you cannot be denied coverage due to prior conditions.
For example, if your birthday falls on December 20th, you must have an application signed and submitted to your new carrier of choice before January 20th.
Every year prior to your birthday month, we run all available plans on the market to ensure you are still on the most cost efficient plan. Rates are constantly changing and carriers are targeting different age groups, so what might have been the most cost-effective plan at 65 might not have that some financial benefit at 70. We offer this as a service to our clients and there is absolutely no obligation for you to make a change. If you are happy with your current carrier, you can certainly stay there! But if we find we can save you some money, we will most definitely contact you and offer the change. This is not a matter of being on a "cheap" plan. Medigap policies are regulated by the federal government so each plan from carrier to carrier is the same- the only difference is your monthly cost.
If you have not enrolled in a Medigap policy, this is also the one time during the year where you are eligible to enroll in one. You will need to go through underwriting and there is a possibility your application may be denied. This is why it is so very important to enroll in your Medigap policy during your IEP.
Part D Open Enrollment
Did you know that each year you can make changes to your Part D plan? This can be done during the Open Enrollment Period which runs from October 15th- December 7th each year.
Part of the service we provided as your agent is to review your drug plan with you each year to make sure you are on the most cost-efficient plan for your prescription needs. During the latter part of September you will receive a letter from our office advising you of this along with a prescription form, which you can download here. However, our preferred method is via secure upload.
If you are a current client, you can request this link here. If you are a new client, please go here to input your information.
There is a fillable PDF and you can return it to us through our website here.
If you have not already signed up for a Part D plan, this is also your opportunity to do so.