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Medicare is made up of four parts. Part A, B, C and D. Original Medicare
is Part A and Part B. To start your Medicare you must contact Social
Security, unless you are already receiving a Social Security check.
The main reason is because they do not know how you plan to pay your
Part B monthly premium. They will wait for you to reach out to them.
Enrollment Periods:
When your Part A and Part B are scheduled to start, you are eligible
for you IEP (Initial Enrollment Period) which is 3 months before your
Medicare begins, the month it begins, and 3 months after it begins.
This is you first opportunity to get into a Part C (Advantage Plan)
or Part D (Stand-alone Drug) plan. Many people who enroll in a stand-alone
Part D plan usually get a Medicare Supplement, but it is not required.
After your IEP if you desire to change your Advantage Plan, or Drug
Plan you must do it during certain times of the year, unless you have
a SEP (Special Enrollment Period) like a permanent move, Medicaid, or
Extra Help with a Drug plan (LIS). The main opportunity to switch to
another plan happens each year during AEP (Annual Enrollment Period)
October 15 through December 7. There is another chance to change for
people who enroll in the Advantage Plans. It is the OEP (Open Enrollment
Period) from January 1 to March 31 each year. They have a one-time opportunity
to change. It is mostly used for people who didn't do their homework
and signed up into a plan which didn't have their doctor in the network,
or maybe one of their prescriptions is not covered in the plans drug
Formulary.
Medicare Part A:
Medicare Part A has three main sections; Inpatient Hospitalization,
Skilled Nursing Facility (for rehab purposes after a 3 day hospital
stay), and Hospice. Usually there is not a monthly premium, however
if you have not paid Medicare taxes for 30 quarters, there would be
a premium.
Year 2025 prices
Inpatient Hospitalization: for
each benefit period
$1676 deductible for days 1 - 60
$419 per day co-pay for days 61 - 90
$838 per day co-pay for days 91 - 150 (60 one-time use lifetime reserve
days)
Beyond lifetime reserve days you pay all costs.
Skilled Nursing facility Stay:
72 hour inpatient hospitalization required for each benefit period
$0 co-pay for days 1 - 20
$209.00 co-pay for days 21-100
Beyond day 100 you pay all costs.
Hospice Care:
$0 co-pay for hospice care.
There may be a fee for each prescription drug or other similar products.
There may be a 5% fee of the Medicare approved amount for inpatient
respite care.
Medicare Part B:
Medicare Part B covers all other Medicare-approved services. There is
a monthly premium for this coverage. The standard rate (2025) is $185.00
per month. Some individual with high incomes will have a higher rate.
Medicare will pay bills based on the "Medicare Approved Amount"
for each service. If a Doctor agrees to take Medicare Assignment, they
have agreed that the Medicare Approved Amount is the final bill. If
a doctor agrees to see someone on Medicare, and does Not take Medicare
Assignment, then they can charge back an extra amount (Part B Excess
Charge) above the Medicare Approved Amount.
Annual Deductible: $257
Co-Insurance after Deductible: 20%
Medicare Part C:
Medicare Part C plans (Medicare Advantage plans) are all run through
private insurance companies. These are the plans that will offer extra
benefits (dental, eye, gym memberships, ect.) beyond what Original Medicare.
When you are in a Medicare Advantage plan you follow the rules and regulations
of the plan you have chosen, not the co-pay and co-insurance amounts
in Original Medicare. The insurance company is responsible to pay all
of the claims, not Original Medicare. CMS (Centers for Medicare and
Medicaid) has rules and regulations that these plans must follow, but
they do not offer an Advantage plan. All of these plans must have a
Maximum-Out-of-Pocket in place. This is a built in safety net for a
bad year. If your In-Network co-pays, and co-insurances on the health
side add up to the Maximus-Out-of-Pocket amount for In-Network, then
the plan will pay co-pays and co-insurance for the rest of the calendar
year. If it is a PPO plan, it will have a Maximus-Out-of-Pocket for
Out-of-Network. To enter a regular Advantage plan you must have both
Medicare A and B, live in the plans service area, and not have ESRD
(end stage renal disease).
HMO - Health Maintenance Organization - You MUST use
In-Network Providers unless it is an
Emergency.
HMO-POS - Health Maintenance Organization with a Point of Service added.
You MUST use
In-Network Providers unless it is an Emergency. However there are some
categories where you can use Out-of-Network Providers for a higher amount.
PPO - Preferred Provider Organization - You can use In- and Out-of-Network
Providers. You
may pay more if you use Out-of-Network Providers.
There are others, but these are the main types you will see.
Some plans are SNP (Special Needs Plans) which have
specific requirements to enter the plan.
C-SNP - Chronic Special Needs Plan - Plan is designed
for only for people with certain chronic
health conditions.
D-SNP - Dual Special Needs Plan - Plan is designed for people with both
Medicare and
Medicaid.
Many Medicare Advantage plans have a Medicare prescription
drug plan added, but not all of them. When looking at a Medicare Advantage
plan you need to look up your doctors, prescriptions, and pharmacy before
signing up into the plan.
Medicare Part D:
Medicare prescription drug plans are all run through private insurance
companies. CMS (Centers for Medicare and Medicaid) has rules and regulations
that these plans must follow, but they do not offer a prescription plan.
There are 3 stages in a Medicare prescription drug plan.
Deductible - You must pay the negotiated amount until
the deductible is met. Not all plans have
deductibles, and some plans only have deductibles on certain Tiers.
Initial Coverage Stage - The plan works like you would expect a prescription
plan to operate.
You pay a co-pay or co-insurance and the plan pays the rest. You and
the plan work together to pay your prescription drug cost. Initial Coverage
stage ends when your Maximum Out of Pocket reaches $2000,
Catastrophic Stage - The plan copay goes to $0 copay for all prescriptions
covered under the plan.
New for 2025 is M3P (Medicare
Prescription Payment Plan) must be offered for all Medicare Drug Plans.
Using this program, you will be billed monthly rather than pay at the
pharmacy. This is designed to help people who are in a plan with a high
deductible, or expensive medications. Your plan and prescriptions will
determine if this actually helps. In some cases, February and March
are low, but your November and December are expensive. People who take
generic prescriptions that do not have a deductible it will not help.
No matter which stage you are in everything resets on
January 1st. The plan will send you reports throughout the year for
several reasons. First to make sure these are your prescriptions, and
someone is not using you card, or pharmacy made a mistake. Second to
inform you what they have paid, what you have paid, and how close you
are to the Coverage Gap stage.
When looking at a prescription drug plan there are 5 basic areas you
must look at. Plan premium, Deductibles, are all my prescriptions in
the plan Formulary (list of covered prescriptions), how much do I pay
during the Initial Coverage stage, and is my pharmacy In-Network.
Medicare Supplement Plans:
There is a difference between an Advantage Plan and a Supplement (Medigap)
plan. With a Medicare Supplement plan, Original Medicare is the first
pay, and the Supplement will all or some of what Medicare leaves behind.
How much is covered depends on which plan you have chosen. Terminology
note: If you hear Part (A,B,C,D) we are talking about Medicare. If you
hear Plan (A,B,C,D,F,G,K,L,M,N) we are talking about a Supplement plan.
Some Supplement companies will of a few added benefits, but not all.
The coverage for a Supplement plan G, and any other plan letter, is
the same regardless of the insurance company. The difference from one
company to another company can come in several categories: initial premium,
added benefits, how the premium is determined, and how often the premiums
are changed.
Because of the MACRA bill, what plan letter you can go into depends
upon when your Medicare started. If your Medicare started after January
1, 2020 you cannot go into a plan that covers the Part B deductible
(Plan C and F). The most comprehensive plan for you is Plan G. If you
started your Medicare before January 1, 2020 you can still get into
a plan that covers the Part B deductible if the insurance company offers
it. If you have ESRD, you are not eligible for a Medicare Supplement
plan. If you are within the first 6 months of starting Medicare Part
B, you are in the Medicare Supplement Open Enrollment and your premium
is not based upon your health. If you have Part B, and are dropping
your employer insurance, or in an Advantage plan and moving outside
the coverage area, you have a Guarantee Issue situation where your premium
is not based upon your health. Again what plans you can enroll into
depends upon when you turned 65, or started your Medicare. This is where
an agent can help guide you. If you are not in your Supplement Open
Enrollment period, or have a Guarantee Issue situation, your premium
will be determined based upon your health.
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