Medicare Basics and Choices
Original Medicare is divided into hospital insurance (Part A) and medical insurance (Part B), which are run by the federal government. Medicare Parts C and D are provided by private, Medicare-approved insurance companies.
Part A (hospital Insurance) helps cover inpatient care in a hospital (but not physician's fees), a limited amount of post-hospital care in a shilled nursing facility, hospice care, and some home health care.
Part B (medical insurance) helps cover physicians' services, inpatient and outpatient services, outpatient hospital care, and diagnostic tests.
Part C (Medicare Advantage) plans provide benefits and services covered under Parts A and B and usually offer additional coverage such as vision, hearing, dental, and/or health and wellness programs. They also impose a liability cap for the beneficiary. Most plans include prescription drug coverage.
Part D (prescription drug coverage) plans help cover the cost of prescription drugs and are available for an additional premium.
When you become eligible for Medicare, you may choose the following ways to receive benefits:
Original Medicare Parts A and B, with optional
Medicare Supplement (Medigap policy), and optional
Prescription Drug plan (Part D), or a
Medicare Advantage plan (Part C), with Rx
What's Right for You?
Most Medicare beneficiaries choose to go beyond Medicare Parts A and B. Part A has hospital deductibles and Part B has a 20% co-insurance liability, with no limit on your out of pocket expenses. Medicare Supplement and Medicare Advantage plans eliminate or reduce the co-insurance and deductibles under Medicare and place a cap on liability. Each individual and/or family situation is unique. We can guide you through the Medicare Maze, simplifying the process so that you end up with your most efficient plan(s).
Enrollment Periods for Parts A and B
If you are receiving Social Security or Railroad Retirement Board (RRB) bnefits when you turn 65, you will be enrolled automatically in Medicare Parts A and B.
If you do not want to enroll in Parts A or B, you should decline coverage by following the instructions on your Medicare card.
About 99% on Medicare beneficiaries receive premium free Part A hospital insurance. If you are among this group, there is probably no reason to decline Part A coverage.
Part B requires premium payments that vary based on income. If you don't decline coverage, the Part B premium will be deducted automatically from your Social Security or RRB benefit.
If you are not yet receiving Social Security or RRB benefits when you turn 65, you have to enroll in Medicare. There are three enrollment periods for Medicare Parts A and B.
Initial Enrollment Period - To avoid penalties, you should enroll during your initial enrollment period, which starts three months before the month you turn 65 and ends three months after the month you turn 65. Depending on when you enroll, coverage will start on the first day on the month after enrollment.
Annual Election Period - In the Fall of each year during AEP (October 15 to December 7), you may change from Original Medicare to a Medicare Advantage plan, or change Medicare Advantage plans. The new coverage would begin on January 1 the following year.
Special Enrollment - Employer based coverage - If you didn't sign up for Medicare Part A and/or Part B when you were first eligible because you were covered under a group health plan based on your current employment (or your spouse's), you can enroll at any time you have coverage as follows:
During the eight month period that begins the month after the employment ends or the group health plan insurance coverage ends, whichever happens first.
Premiums for Parts A and B - Medicare Part A is generally premium-free if you or your spouse paid Medicare payroll taxes for at least 10 years (40 fiscal quarters).
Part B Premiums - Medicare Part B requires premium payments that are based on Modified Adjusted Gross Income. In 2019, the following monthly premiums apply, based on your Modified Adjusted Gross Income on your 2018 tax return:
File Individual Tax Return File Joint tax return File Married & separate tax return You pay each month
$ 97,000 or less $194,000 or less $91,000 or less $164.90
$ 97,000 up to $114,000 $194,000 up to $246,000 not applicable $230.80
$123,000 up to $153,000 $246,000 up to $306,000 not applicable $329.70
$153,000 up to $183,000 $306,000 up to $366,000 not applicable $428.60
$183,000, up to $500,000 $366,000, up to $750,000 $91,000, less than $409,000 $527.50
$500,000 or more $750,000 or more $409,000 or more $560.50
For complete info on Part B costs, go to Medicare.gov, Medicare Costs, Part B costs