Medicare Explained

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Medicare is a FEDERAL health insurance program for people in the U.S. who are age 65 and older as well as some younger people with disabilities,  

kidney failure  or ALS.

The term "ORIGINAL MEDICARE" refers to Medicare Part A (hospital coverage) 

and Part B (medical coverage). 

People enrolled in ORIGINAL Medicare can see ANY DOCTOR and go to ANY HOSPITAL in the U.S. that accepts Medicare.

Find HELPFUL CHARTS here

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Call me to learn WHEN and HOW 

to sign up for Medicare

 Medicare Part A covers INPATIENT care in a hospital or skilled nursing facility. 

It Does NOT cover custodial or 

long-term care.  

Part A also helps pay for hospice care and some home health care. 

Medicare Part A has a DEDUCTIBLE 

and COINSURANCE, which means patients pay a portion of the bill.

Find HELPFUL CHARTS here

The Deductible is a Benefit Period Deductible, which means it can occur multiple times in a year.

Part A is earned and paid for with your FICA payroll taxes.

Most U.S. workers will earn 

Premium-Free Part A by the time 

they reach age 65.

Medicare Part B covers doctor visits, surgeon services, diagnostic tests and other Medically Necessary services 

and supplies. That includes preventive services or health care to prevent illness, as well as emergency ambulance services, durable medical equipment, mental health coverage and certain types of outpatient prescription drugs. 

Medicare Part B requires a MONTHLY PREMIUM that everyone must pay.

People with higher incomes may 

pay more.  See IRMAA Chart

Medicare Part B has an 

Annual DEDUCTIBLE.

After the deductible, patients typically pay 20% of the Medicare-approved amount for the services and supplies with No Dollar Limit on their out-of-pocket responsibility.

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It is important to note that 

you CAN also incur Part B expenses 

while in the Hospital.

This can be during an Emergency Visit 

or while in the hospital 

Under Observation.

Also from doctors and surgeons who 

bill separately for their service

Medicare Supplement insurance (also known as Medigap insurance), is an additional health insurance policy you can buy from a Private Insurer to help pay many of the out-of-pocket costs not covered by Medicare Part A and Part B, such as deductibles and the 20% coinsurance. Some plans even cover Foreign Travel Emergencies.

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Medicare Supplement plans are accepted by ANY Doctor or Hospital in the U.S. that accepts Medicare.

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There are NO Networks to worry about 

and NO Referrals needed

to see a specialist.

You must have Original Medicare Part A and Part B to purchase a Medigap policy.  

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A Medigap policy CANNOT be purchased 

with a Medicare Advantage  plan. 

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Medicare Supplement plans are STANDARDIZED by Federal Law.

So, plans are EXACTLY the same from company to company.

Only the cost for the plan can 

be different.

See Medicare & You, Section 5, pg. 76

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*There are 3 states (Massachusetts, Minnesota and Wisconsin) that do not follow the federal standard and have their own standardization.

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The benefits of each Medicare Supplement plan stay consistent from year to year and plans are guaranteed renewable as long a premiums are paid.

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Medigap plans can be purchased 

ALL Year Round 

(365 days per year).

Certain rules and restrictions apply.

Medicare Advantage (MA), also known as Medicare Part C, are  Managed Care health plans offered by Private Insurance Companies that provide 

similar benefits of Part A and Part B 

and often include Part D (prescription drug coverage) as well. 

Medicare Advantage Plans are sometimes referred to as Medicare Replacement Plans because when enrolling in them, you will no longer use your Original Medicare Part A 

and Part B coverage.

These bundled plans may also offer additional coverage, such as vision, basic hearing and basic dental care. 

Medicare Advantage plans are typically HMOs or PPOs that require members 

to utilize Networks of contracted Doctors and Hospitals.  

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Because Medicare Advantage plans are Managed Care plans, the insurance companies get to decide whether or not to cover various treatments or procedures.

Denials are a part of life under Managed Care and members must navigate the company's appeals process when attempting to get denials overturned. 

Coverage for many services and procedures requires  Prior Authorization from the plan. 

HMO's usually require your primary care doctor's Referral to see specialists before they will pay for services. 

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Medicare Advantage plans have a Maximum Annual Out Of Pocket limit 

(MOOP) on out-of-pocket costs. 

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*Please Note that the Annual out-of-pocket limit does NOT include the cost of prescription medications or Dental, Vision or Hearing benefits!

So, it is possible to spend more than the Maximum Annual Out-Of-Pocket Limit if you take expensive prescription medications, or utilize the other extra benefits of the plan.

Benefits provided by Medicare Advantage plans CHANGE from year to year and doctors and hospitals may leave plans or be dropped by plans 

at any time.

Some changes may be good 

and some may not.

For this reason each plan must 

provide it's members an 

ANNUAL NOTICE OF CHANGE 

(ANOC).

This means that these plans come with HOMEWORK, and if you do not do your HOMEWORK, you may find yourself looking for a new doctor or being surprised with unexpected bills.

You MUST read and be aware of the SUMMARY OF BENEFITS for your plan.

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When signing up for a Medicare Advantage plan, you are choosing to Give Up your Original Medicare for a Private, Managed Care program.

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With Medicare Advantage plans there are strict rules governing when you can purchase, leave or change a plan.

Medicare Supplements are for seniors who want NATIONWIDE Coverage with the ability to go to ANY DOCTOR and ANY HOSPITAL, that accepts Medicare, throughout the ENTIRE 

United States.

With Medicare Supplements, when Original Medicare covers a given benefit, so does the Medicare Supplement.

Medicare Supplement policy holders never have to get involved in whether those bills get paid. 

With Medicare Supplements it is automatic. In fact, Medicare actually tells the Supplement carrier company what to pay. Providers such as Doctors and Hospitals do not have to bill supplement plans separately.

Medicare Supplement policy holders never have to worry from year to year whether their doctor, specialist or hospital is still on their plan.

There are No Networks to worry about.

Medicare Supplements are Federally Standardized as to what they cover and the insurance companies that sell them cannot decide to cover less than the Federal Standard for each plan.

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Owners of Medicare Supplement plans can sleep well knowing that their healthcare is on "cruise control" or as some say; "set and forget", because they NEVER have to worry about any Annual Changes or Annual sign ups.

With a Medicare Supplement plan, you know exactly what your plan covers, 

and as long as premiums are paid, 

Medicare Supplement Plans will NEVER CHANGE and they are Guaranteed Renewable from year to year.

Medicare Supplements are for those who DO NOT want to be limited by the constantly changing,  Managed Care systems that may restrict their access,  deny procedures, require referrals, 

require prior authorizations, 

 or drop providers from networks.

 Private, For-Profit insurance companies that sell Medicare Advantage plans often Require prior authorizations 

in order to:

See Specialists, 

Get Out-of-Network Care, 

Get Non-Emergency Hospital Care, 

and more. 

Each Medicare Advantage plan has Different Requirements, 

so members should check their Summary of Benefits or contact their plan to ask if and when prior authorizations are needed.

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Recently, The American Association of Family Physicians (AAFP) and nearly 100 other medical professional organizations asked the Federal Medicare Administrator at CMS to provide appropriate direction to Medicare Advantage plans on their use of prior authorizations because they find Prior Authorizations to be  restrictive and burdensome.  Link to article.

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Original Medicare, on the other hand, historically, has rarely required prior authorization. Originally, the Social Security Act did not authorize Any form of prior authorization for Medicare services, But the law has subsequently been changed to allow prior authorization for certain limited items of Durable Medical Equipment. 

Despite this change, there are still very few services requiring Prior Authorization in Original Medicare. Enrollees in traditional Medicare Parts A and B can generally see specialists, visit hospitals, get care out of state, and so on, without having to ask Medicare's permission. 

When looking at Medicare Advantage plans, take time to carefully review the Summary of Benefits for any plan you are considering. This is where you will find the costs of the various Copays 

that you will incur as you use the

 plan services. 

Here are some Copay examples from a typical plan. (These are just Examples and every plan may have different dollar amounts (higher or lower)).

Emergency Ambulance....$300

Hospital Stay.....$250 per DAY for the first 5 days of a benefit period

Diagnostic Radiology.....Up to $150

Lab Services.....Up to $200

Outpatient X-Rays.....Up to $125

Kidney Dialysis.....20% of the cost

Injected Chemotherapy.....20% of cost

Again, these are only Examples,

However, the 20% Copay on Chemotherapy is pretty standard and that's only if you use  in-network providers. Some plans may charge 50% out of network and some may not cover out of network at all leaving you 

to pay 100% out-of-pocket.

 These Examples demonstrate how Medicare Advantage  

out-of-pocket costs can quickly add 

up over the year if you experience a serious illness or accident.  

 Inpatient Care is the care you receive in a hospital once you have been 

formally Admitted to the hospital.

Inpatient hospital services include:

• Semi-private rooms
• Meals
• General nursing
• Drugs provided or administered during your inpatient stay
• Other hospital services and supplies

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 Some people will get Medicare Part A and Part B  automatically and other people have to sign up for it. 

In most cases, it depends on whether you are already getting 

Social Security benefits. 

See this page on Medicare.gov

If you are NOT one of the people getting Medicare Automatically then you will have to sign up for it during your Initial Enrollment Period (IEP).

The IEP is a 7 month period that includes the 3 months Before your 65th Birth Month, Includes your 65th Birth Month, and the 3 months Following your 65th Birth Month.

Exception: If you are working past age 65, please see that section

 If you sign up for Medicare Part A (Hospital) and/or Medicare Part B (Medical) during the first 3 months of your Initial Enrollment Period, your coverage starts the first day of the month you turn 65. If your birthday is on the first day of the month, your coverage starts the first day of the prior month. 

See Medicare.gov for more information on when coverage starts based on 

when you sign up.

It is usually best to sign up during 

the 3 months prior 

to your 65th Birth Month. 

Sometimes, however, it might be to your advantage 

to delay Part B enrollment.  

See Medicare & You, Section 1, Page 19, Should I get Part B?

If you are covered by an Employer Group Health Plan and you continue to work past age 65, the SIZE of the company determines whether you must sign up for Medicare. 

People who work at small employers with fewer than 20 employees will 

need to sign up for Medicare at age 65. This is because Medicare becomes their Primary coverage.

If the company has 20 or more employees, you can generally delay signing up for Medicare Part B .

However, you Must check with your HR department or benefit coordinator to be sure that the employer coverage is considered CREDITABLE in order to avoid Late Enrollment Penalties. 

When you ultimately stop working or lose employer coverage, (whichever happens first), you will have 8 months to enroll in Medicare Part B without penalty, and just 63 days to enroll in a Part D Prescription Drug Plan.

However, to avoid GAPS in coverage, 

it is best to plan ahead

Here is the link to the Social Security Administration (SSA) website: SSA.gov/benefits/medicare

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People who already have Part A and need to sign up for Part B will need to fill out Form CMS 40B.

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People who sign up while employed, or during the 8 months after their employment or group coverage 

ends will need  to fill out 

Form CMS 40B and also need to request their employer to fill out 

Form CMS L564 

  Part B Late Enrollment Penalty:

If you don’t sign up for Part B when you’re first eligible, you may have to pay a Late Enrollment Penalty for as long as you have Part B. 

However, there are situations that allow you to postpone taking Part B without penalty.

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  Part D Late Enrollment Penalty: 

The late enrollment penalty is an amount that’s Permanently Added to your Part D premium. You may owe a late enrollment penalty IF at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don’t have Part D or other CREDITABLE prescription drug coverage. You’ll generally have to pay the penalty for as long as you have Part D coverage. 

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Budgeting for healthcare with 

Medicare Advantage vs. Medigap (Medicare Supplements).

Since Medicare Advantage Plans are "Pay As You Go" health coverage, budgeting for healthcare is DIFFICULT. Unexpected, serious health issues can leave you with thousands of dollars of medical bills that you may not be prepared for.

With Medicare Supplements, you know what your monthly premium is and what your annual deductible is. You also know exactly what is covered by your plan. This makes budgeting for healthcare EASY.

A common Misconception and Mistake that people make is thinking that they will save money by enrolling in a low cost or Zero premium Medicare Advantage plan when they are younger and still healthy, then if major health issues arise, they could always switch to a Medicare Supplement plan.

This is FALSE.

While Medicare Advantage plans have no underwriting requirements 

(meaning that an applicant's health status is not a consideration 

for acceptance), the same is 

generally NOT the case 

for Medicare Supplement plans.

Medicare Supplement plans generally DO require Medical Underwriting with the following exceptions:  

There is no medical underwriting during your Medicare Initial Enrollment Period and during 

Guaranteed Issue situations.

At ALL other times, Medicare Supplement plans require applicants to answer and pass numerous health history questions.

The answer is NO. 

Medicare only covers individuals, 

NOT families.  Each person must have their own Medicare coverage with their own unique Medicare Number.

Each person qualifies on their own.

Each pays their own Part B premium.

However, one spouse may qualify for Medicare based on the work history of the other spouse.

 To qualify for premium free Medicare Part A benefits at age 65 based on your spouse’s work history, you must meet one of the following 3 requirements:

1. You have been married to your spouse who qualifies for Social Security benefits for at least 1 year before applying for Social Security benefits.

2. You are divorced, but were married to a spouse for at least 10 years who qualifies for Social Security benefits 

and you are now single and 

have  not remarried.

3. You are widowed, but were married for at least 9 months before your spouse died, and they qualified for Social Security benefits. 

You must now be single.

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