One of the biggest benefits of turning 65 is that you qualify for Medicare, however, many people are not sure how it works and what they should do next.
Our job at Term Team EZLife is to help folks with their Medicare insurance; that’s what we do 365 days a year! We get paid by the insurance companies, so there is no cost to you.
We would like to earn your business, so we want to make sure you have the best insurance tailored around your needs. Also, we make certain you are within Medicare’s rules so you don’t receive a dreaded penalty letter! So, take a moment and give us a call
By the way, the person you enroll with becomes your agent of record, so choose wisely!
Back in July of 1965, Medicare was signed into law. It is provided by the government and pays fees for your care directly to the doctors and hospitals you visit. Part A helps with hospital costs and Part B helps with doctor and outpatient care.
Part A helps with the cost of your inpatient hospital stays and skilled nursing care after a hospital stay. Medicare Part A premium is free to you, as long as you have worked at least 10 years in this country. Although the monthly premium is free, the deductibles and co-pays are not.
Part B covers doctor visits, including outpatient care and treatment at hospitals and clinics, lab tests, and some skilled nursing care. There is a monthly premium for Part B and most people pay $134 per month, but if you’re single making more than $85,000 per year, or married and filing jointly making over $170,000, you will pay a higher monthly premium. Part B pays 80% of your doctor’s fees, and you are responsible for the remaining 20%. In my experience, the 20% for Part B, for which you are responsible, puts you at unlimited financial risk. We will talk later about ways to avoid risk.
Part D helps with the cost of prescription drugs. Part D plans are sold by private insurance companies and range in price from $22 per month all the way to $100+ per month. WORD OF WARNING: You will read that Part D is optional, and many people do not take prescription medications or very few, so they decide not to enroll. Consequently, by not enrolling when you first become eligible, you will be assessed a penalty and that penalty will stay with you the rest of your life! For example, a person turns 65 and doesn’t take any medications and decides against enrolling in Part D. When that person turns 70, let’s say their doctor prescribes an expensive medication and that person decides to now enroll in Part D. Shortly following, he/she receives a letter from Medicare showing their late enrollment penalty. In this example that person’s penalty would be roughly $25 per month, for the rest of that person’s life.
80% of Your Medical Bills
Original Medicare helps you get coverage you need, however, as stated on the previous page, the 20% for which you are responsible, puts you in a position of unlimited financial risk. Following is a real-world example:
Let’s assume you only have Original Medicare, and a bad test result comes back revealing you have cancer. Your oncologist’s recommendation is a series of chemo and radiation treatments to fight the cancer, and months later the medical costs reach $250,000. Because you only have Original Medicare, your share of that bill would be $50,000. We all know $250,000 is a very conservative number for this situation. I bring this example to light for one reason—it can be very upsetting to meet folks that thought they simply needed to turn on their Original Medicare Parts A and B, and were all set. There are two different ways to protect yourself from that 20% that Original Medicare does not cover.
The next part of this newsletter should be read very carefully. You need to understand the difference between an Advantage Plan and a Supplemental Plan.
(Medicare Part C)
Medicare Supplement Insurance Plans Plans are run by private insurance companies. In San Bernardino County, you have probably heard of UnitedHealthCare, Scan, Humana, Kaiser, etc. These companies offer Advantage Plans you can choose that combine coverage for certain hospital costs and doctor visits, and most include Part D coverage at no additional cost. With these plans you can choose a primary doctor, and your doctor has access to specialists and hospitals within their group. Many plans offer additional benefits not offered by Original Medicare such as, vision, dental, hearing, and gym memberships. Although you continue to pay your Part B premium, many Advantage Plans offer low or even $0 monthly premiums. All plans also offer an annual out-of-pocket limit to protect you financially. Each year you have a chance to change your coverage during the Annual Enrollment Period, which begins October 15 and runs through December 7th.
Medicare Supplemental Plans, sometimes called Medigap Plans, help cover some, or all, of the costs Medicare Parts A and B don’t cover. The good news is you can see any doctor or any specialist in the country as long as that doctor participates in Medicare. Remember, you can still keep paying your Part B premium and with a Supplemental Plan, your Part D premium is separate and not built-in, as most Advantage Plans are. When you turn 65, you have a guaranteed issue in a Supplemental Plan and are ‘Guaranteed Renewable.’ That means the policy renews automatically from year-to-year as long as you pay the premium on time.