When to Sign Up for Medicare

It's important to know the deadlines for when to sign up for Medicare.
It’s important to know the deadlines for when to sign up for Medicare.

It’s important to know the deadlines for when to sign up for Medicare and the penalties that can be imposed for late enrollment.

Here are the important dates for Medicare enrollment:

  • You can initially enroll in Medicare during the seven-month period that begins three months before you turn 65.
  • If you continue to work past 65, sign up for Medicare within eight months of leaving the job or group health plan or penalties apply.
  • The six-month Medicare Supplement Insurance enrollment period starts when you’re 65 or older and enrolled in Medicare Part B.
  • You can make changes to your Medicare coverage during the annual open enrollment period, from Oct. 15 to Dec. 7.
  • Medicare Advantage Plan participants can move to another plan from January 1 to March 31 each year.

Medicare Parts A and B Deadline. Individuals who are getting Social Security benefits, may be automatically enrolled in Parts A and B, and coverage starts the month they turn 65. However, those who haven’t claimed Social Security must proactively enroll in Medicare. You can first sign up for Medicare Part A hospital insurance and Medicare Part B medical insurance during the seven months that starts three months before the month you turn 65. Your coverage can start as soon as the first day of the month you turn 65, or the first day of the prior month, if your birthday falls on the first of the month. If you fail to enroll in Medicare during the initial enrollment period, you can sign up during the general enrollment period between January 1 and March 31 each year for coverage that will begin July 1. Note that you might be charged a late enrollment penalty when your benefit begins. Monthly Part B premiums increase by 10% for each 12-month period you delay signing up for Medicare, after becoming eligible for benefits.

If you or your spouse are still working after age 65 for an employer that provides group health insurance, you must enroll in Medicare within eight months of leaving the job or the coverage ending to avoid the penalty.

Medicare Part D Deadline. Part D prescription drug coverage has the same initial enrollment period of the seven months around your 65th birthday as Medicare Parts A and B, but the penalty is different. It’s calculated by multiplying 1% of the “national base beneficiary premium” ($32.74 in 2020) by the number of months you didn’t have prescription drug coverage after Medicare eligibility and rounding to the nearest 10 cents. That’s added to the Medicare Part D plan that you choose each year. As the national base beneficiary premium increases, your penalty also goes up.

Medicare Supplement Insurance Plan Deadline. These plans can be used to pay for some of Medicare’s cost-sharing requirements and some services that traditional Medicare doesn’t cover. The enrollment period is different than the other parts of Medicare. It is a six-month period that starts when you’re 65 or older and enrolled in Medicare Part B. During this open enrollment period, private health insurance companies must sell you a Medicare Supplement Insurance plan, regardless of your health conditions. After this enrollment period, insurance companies can use medical underwriting to decide how much to charge for the policy and can even reject you. If you miss the open enrollment period, you’re no longer guaranteed the ability to buy a Medicare Supplement Insurance plan without underwriting, or you could be charged significantly more, if you have any health conditions.

Medicare Open Enrollment Deadline. You can make changes to your Medicare coverage during the annual open enrollment period from October 15 to December 7. During this period, you can move to a new Medicare Part D prescription drug plan, join a Medicare Advantage Plan, or stop a Medicare Advantage Plan and return to original Medicare. Changes take effect on January 1 of the following year.

Medicare Advantage Open Enrollment Deadline. Participants can move to another plan or drop their Medicare Advantage Plan and return to original Medicare, including purchasing a Medicare Part D plan, from January 1 to March 31 each year. You can only make one change each year during this period, and the new plan will begin on the first of the month after your request is received.

Reference: Yahoo News (July 27, 2020) “Medicare Enrollment Deadlines You Shouldn’t Miss”

 

Continue Reading When to Sign Up for Medicare

Medicare Basics: What to Know

Many clients who are retiring or suffering job loss face key decisions about their healthcare. These Medicare basics will help make those decisions.

Medicare is a commonly misunderstood government benefit.  With so many baby-boomers retiring and especially with the impact of COVID-19 on the economy, many clients are faced with important decisions on their healthcare.  For that reason, I wanted to cover some Medicare basics to help readers understand these issues.

If you’re 65 or older and lose your job, you can keep your employer-based health insurance under a federal law known as COBRA. However, it also could be more expensive. In addition, COBRA coverage isn’t qualifying insurance in place of Medicare, and if you miss some deadlines for enrolling in Medicare without having the right coverage, you could pay life-lasting penalties, explains CNBC’s recent article entitled “What to know about getting Medicare if you are 65 or older and lost your job.”

Another critical Medicare basic is that Medicare isn’t free. However, if you find yourself currently with no employer-based insurance, it may be your best option. There are also ways to lower your costs, if your income has dropped a lot.

Provided that you have at least a 10-year work history, you’ll have no premiums to pay for Medicare Part A, which covers hospital stays, skilled nursing, hospice and certain home health services. If you don’t satisfy the eligibility requirements for it being premium-free, you could pay up to $458 per month for coverage. Either way, Part A’s deductible is $1,408 per benefit period, with some caps on benefits.

Part B covers outpatient care and medical supplies. It has a standard monthly premium of $144.60 in 2020, but higher earners pay more. There is also a $198 deductible in 2020. Once you meet the deductible, you’ll typically pay 20% of covered services. You are allowed eight months to sign up for Part B, once you lose workplace coverage.

You can get a standalone plan to have with original Medicare, or you can get an Advantage Plan (Part C). These plans are offered by private insurance companies and typically include prescription drug coverage. If you select this, your Parts A and B benefits will be delivered via the insurer offering the plan (which may or may not have a premium).

A Part D drug plan covers prescriptions. The average cost for this coverage in 2020 is roughly $42 a month, but high earners pay extra for their premiums. The maximum deductible for Part D is $435 in 2020.

If you already have Part A and are enrolling in Part B because of a job loss, there is a form that you and your ex-employer should complete to avoid late-enrollment penalties, by making certain that you had qualifying coverage during the period of time you were eligible for Part B but weren’t enrolled.

Another important issue of Medicare basics is what Medicare excludes from cover.  Consider how you’ll pay for items like dental work, routine vision, or hearing care. It also excludes long term care, cosmetic procedures and overseas medical care.  Clients often mistaken the skilled nursing facility rehab component of Medicare with long term care insurance, so see here for more detail on that.  https://www.galliganmanning.com/long-term-care-whats-it-all-about/ 

Seniors frequently use original Medicare and a supplemental policy (“Medigap”) to help cover out-of-pocket costs, such as deductibles and coinsurance. Medigap policies are standardized, regardless of which insurance company sells them and your location. However, the premiums can differ from insurer to insurer and among locations. Therefore, it is critical that you know the differences you may see when evaluating your options. Look at a carrier’s premium rating system, its claims history and its customer service ratings.

If you go with an Advantage Plan, dental and vision coverage may be included. Note that these plans have their own copays, deductibles and out-of-pocket maximums.

Reference: CNBC (June 26, 2020) “What to know about getting Medicare if you are 65 or older and lost your job”

Continue Reading Medicare Basics: What to Know

Does Medicare Cover COVID-19-related Medical Expenses?

Seniors need to know what Covid-19 related expenses are covered by Medicare.
Seniors need to know what Covid-19 related expenses are covered by Medicare.

Knowing the way in which Medicare is offering coverage for COVID-19 can help seniors protect their health and their finances at the same time.

Motley Fool’s recent article entitled “How Will Medicare Cover COVID-19? Your Top Questions Answered” answered some common questions seniors have about the COVID-19 pandemic.

Will Medicare cover COVID-19 testing? The testing for the coronavirus can be difficult to obtain, depending on where you live. However, the good news is that Medicare Part B will pay for this. In addition, Medicare Advantage plans must also cover COVID-19 testing.

How much must Medicare enrollees pay to get tested? While COVID-19 testing may be a stressful process, if you’re on Medicare, you won’t pay to get the results. There’s no cost for your actual test and no co-pay for seeing a doctor who can order one.

Does Medicare pay for COVID-19 treatment? There’s no standard treatment for the coronavirus, but some patients with severe symptoms are being hospitalized. Medicare Part A will usually cover inpatient hospital treatment. As a result, if you’re admitted because of COVID-19, you’ll have your normal deductible under Part A ($1,408 per benefit period). Note that coinsurance won’t kick in during your first 60 days of consecutive hospital care, but beyond that, you’ll pay $352 per day until you reach the 90-day point in the hospital. If you have supplemental insurance, your Medigap plan may cover the cost of some of the out-of-pocket costs you have for getting hospital treatment.

Does Medicare cover a COVID-19 vaccine when it’s available? While a vaccine is at least a year out, if one becomes available, it will be covered by Medicare Part B and you won’t have a copay for it.

Will Medicare cover mental health services? Many seniors are having a hard time coping with the pandemic and its effects. Some are feeling isolated in their homes, and others are feeling anxious. Medicare does cover mental health services, and you may be able to meet with a professional remotely via telemedicine. Generally, you will be subject to your Part B deductible, plus 20% coinsurance. Seniors who are struggling with mental health issues can also call the Substance Abuse and Mental Health Services Administration’s Disaster Distress Helpline at 1-800-985-5990.

The COVID-19 crisis has been especially tough on seniors.

Knowing what to expect from Medicare could make a this a little easier.

If you’re interested in the CDC’s recommendation for Care Plans for older adults, see https://www.galliganmanning.com/covid19-update-cdc-recommends-care-plans-for-both-older-adults-and-caregivers/

Motley Fool (April 30, 2020) “How Will Medicare Cover COVID-19? Your Top Questions Answered”

 

Continue Reading Does Medicare Cover COVID-19-related Medical Expenses?