Medicare

The easiest way to describe this is to say that a Medicare Advantage Plan is a primary insurance plan and you do not need any other plan with it. They take over your Medicare benefits and agree to pay all of your claims, so Medicare can no longer be billed. Some Medicare Advantage plans will also include drug coverage for no extra cost. A Medicare supplement plan is a secondary insurance plan and is billed secondary to Medicare. Supplement insurance plans will only cover Medicare covered medical items and, depending on which plan you choose, help either cover some or all of the deductibles or co-insurance that Medicare doesn’t cover. Supplement plans do not include drug coverage. If you want prescription drug coverage then you will need to enroll in a Stand Alone Prescription Drug plan.

You can read more about this on https://Medicare.gov

As long as you have worked in the United States for ten years and paid into Medicare taxes, you will be enrolled into Part A at no cost. Part A will start on the first day of the month of your 65th birthday. However, if your birthday falls on the 1st day of the month, then your benefits will start on the first day of the previous month. 

If you do not qualify for Part A at no cost, e.g. you didn’t work here long enough to pay into it, then it can be purchased. 

If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $458. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $252.

The late enrollment penalty is calculated by multiplying the amount of months you did not have creditable prescription drug coverage when you were eligible to, under a Part D plan, by 1% of the national average drug price. Medicare will contact your Medicare prescription drug plan and tell them the proper penalty to charge you. This penalty never goes away. As long as you have a drug plan, you will have to pay this penalty, in addition to the monthly Part D premium.

The best way to avoid this penalty is to make sure that when you are first eligible,  you either enroll in a Medicare Advantage plan that includes drug coverage, enroll in a Stand Alone Prescription Drug Plan, or make sure your employer drug coverage qualifies as creditable drug coverage with Medicare. You have 63 days once your Part A or Part B starts to enroll in a creditable prescription drug plan to avoid paying the penalty.

"Avoid a Medicare Penalty,  Sign Up at Age 65. Even if you don’t plan to receive monthly benefits, be sure to sign up for Medicare three months before turning age 65. If you don’t sign up for Medicare Part B (medical insurance) when you’re first eligible, your coverage may not start right away and you may have to pay a late enrollment penalty for as long as you have it. You can apply online.   Please visit www.socialsecurity.gov/medicareonly for more information and to apply." 

There are two time frames you will want to follow to apply for Part B:

The first would be up to three months before you turn 65. If you are either retired, planning to retire, not receiving social security benefits yet or if your employer requires you to enroll in Part B. If this fits your needs then you can apply online to start Part B.  However, the quickest way to enroll in Part B is to apply in person at  your local social security office three months before you turn 65, so that you begin your coverage effective on the first of your birthday month.

The second would be if you have worked past age 65 and were not required to have been on Medicare by your employer. Now you will have to apply in person at a local social security office to start your Part B and have it start the month following your retirement. You will need a two part form to be able to do this. One form is to be filled out by your HR department to prove you had creditable medical insurance coverage. The other form is one you fill out and submit to the social security office.  If you need this form, please contact us and we will provide it for you.

Additionally, if you are already drawing social security benefits before you turn 65 you will be automatically enrolled in Part B. You will receive your Medicare card in the mail with both Part A and Part B on it.  The card is mailed approximately 3 months prior to the effective date of coverage.

The Part B penalty is a 10% higher Part B monthly payment for every 12-month period that you could have had Part B but didn’t sign up for it. The best way to avoid this is to either sign up for Part B when you are first eligible or make sure that you have creditable medical coverage through your employer.

The standard amount for 2020 is $144.60. This is based off of Modified Adjusted Gross Income (MAGI) of $87,000 or less for individuals or $174,000 or less for married couples . 

The Part B premium may be higher if your income falls above these levels.  Also your Part D premium may be higher if your income falls above these levels.

Please see the most up-to-date income charts below: