Background on Medicare
Medicare is a federal health insurance program that pays for a variety of health care expenses. It's administered by the Centers for Medicare & Medicaid Services (CMS),a division of the U.S. Department of Health & Human Services (HHS). Medicare beneficiaries are typically senior citizens age 65 and older. Adults with certain approved medical conditions (such as Lou Gehrig's disease) or qualifying permanent disabilities may also be eligible for Medicare benefits.
Similar to Social Security, Medicare is an entitlement program. Most U.S. citizens earn the right to enroll in Medicare by working and paying their taxes for a minimum required period. Even if you didn't work long enough to be entitled to Medicare benefits, you may still be eligible to enroll, but you might have to pay more.
There are four different parts to the Medicare program. Parts A and B are often referred to as "Original" Medicare or "Fee for Service" Medicare. Medicare Part C, or Medicare Advantage, is private health insurance. Part D is outpatient drug coverage and is offered through private insurance carriers.
You can learn more about Medicare at www.medicare.gov, which is the official site of CMS. Medicare & You 2019 is the official government handbook with information about Medicare, and the 2019 version was published in late September..
Medicare Overvew FAQs
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1. What Is Medicare Part A?
Medicare Part A is hospital insurance. Part A covers inpatient hospital care, limited time in a skilled nursing care facility, limited home health care services, and hospice care.
2. What Is Medicare Part B?
Medicare Part B is medical insurance. Part B covers certain medical expenses like doctor's office visits, blood tests, x-rays. diabetic screenings and supplies, Medicare approved preventive care services, and outpatient care.
*On all Medicare-covered expenses, a doctor or other healthcare provider may agree to accept Medicare assignment. This means the patient will not be required to pay any expense in excess of Medicare's approved charge. The patient pays only 20% of the approved charged not paid by Medicare.
Physicians who do not accept assignment of a Medicare claim are limited as to the amount they can charge for covered services. The most a physician can charge for services covered by Medicare is 115% of the approved amount for nonparticipating physicians. Note: In New York, the most a physician can charge for services covered my Medicare is 105% of the approved amount for nonparticipationg phyisicians. For routine office visits covered by Medicare, a nonparticipating physician can charge up to 115% of the fee schedule amount.
3. When Is Enrollment In Medicare Automatic?
Enrollment in Parts A and B is automatic when you're 65 and receiving Social Security or Railroad Retirement benefits (of if you have Lou Gehrig's disease or have received Social Security disability benefits for 24 months). If you're automatically enrolled, you'll receive your red, white, and blue Medicare card in the mail 3 months before your 65th birthday or your 25th month of disability.
4. What Must I Do If I'm Not Automatically Enrolled In Medicare?
You need to sign up for Parts A and B if you aren't already receiving Social Security or Railroad Retirement benefits.HOW TO SIGN UP FOR PART B IF YOU'RE NOT AUTOMATICALLY ENROLLED.
We recommend you start the process the first of the month three months before your birthday month (your birthday month is always considered the first of the preceding month if your 65th birthday is on the first of the month).
When you're first eligible for Medicare, you have a 7-month Initial Enrollment Period ("IEP") to sign up for Part A and/or Part B. This period begins three months before your 65th birthday month and ends the last day of the third month after your birthdate month. Unless you're enrolled in a group plan there will be a penalty and also a restricted enrollment period between January 1 and March 31 if you don't enroll during the IEP.
5. When Am I Eligible For Medicare?
Use this CALCULATOR to get an estimate of when you're eligible for Medicare.
6. What Can I Do If I Didn't Sign Up For Medicare When First Eligible?
If you're eligible for premium-free Part A (see question 8 for a definition of "premium free" Part A) because you or your spouse have paid Medicare taxes for at least 40 quarters (10 years), you can sign up at any time.
If you have to buy Part A and/or Part B, you can only sign up during a valid enrollment period. If you don't enroll when you're first eligible [generally three months before and up to three months after your 65th birthday month (there are special rules for individuals who don't enroll because they had group coverage)]. In most cases you can only enroll between January 1 and March 31 (the "general enrollment period") and coverage will start July 1. There's a late enrollment penalty if you don't sign up for Medicare Part B when first eligible.
Note: If you enrolled for Part A or B of Medicare during the general enrollment period, you need to enroll between April 1 and June 30 for a July 1 effective date for a Medicare Advantange (MA) or Medicare Advantage Prescription Drug (MAPD) plan. If you delay until July 1 or later, you can only enroll in one of these types of plans if you have a Special Enrollment Period or during the Annual Enrollment Period that runs between October 15 and December 7.
You have six months from your Part B effective date to enroll for a Medicare Supplement plan without having to answer medical questions. Otherwise you can enroll at any time.
You can enroll for a Part D drug plan three months before and up to three months after the month of your Part A OR Part B effective date, whichever is earlier. Otherwise, you can enroll in a Part D plan ONLY if you have a Special Enrollment Period or during the Annual Enrollment Period.
See the Medicare Supplement, Medicare Advantage (Part C) and/or Part D Prescription Drug plan pages for additional details or call us at 877-734-3884 for more information because the rules for enrolling in one of these plans when you've enrolled for Part A or B during general enrollment (or when leaving an employer group plan) are unique and not well understood.
7. What If I Didn't Sign Up For Medicare Because I Had Group Coverage Based on Current Employment?
If you didn't sign up for Parts A and/or B because you had employer group coverage based on current employment and your employer has more than 20 employees, you can enroll in Parts A and/or B any time as long as you or your spouse are working and are covered under group coverage.(If your employer has 20 or fewer employees you should sign up for Part B when first eligible or you will be assessed a late enrollment penalty when you finally sign up.)
If your employer provides group coverage and you are enrolled in an employer group plan, you also have an 8-month period to sign up for Part A and/or B that begins the month after employment ends or the group health plan insurance based on current employment ends. There's no penalty providing you sign up within 8 months after the loss of group coverage.
LEARN MORE about signing up for Medicare Part B. Most individuals of employers with 20 or more employees who are about to retire and have had employer coverage will have been enrolled in Medicare Part A but not Part B, and it's important to sign up through your local Social Security office before the first of the month of retirement and to request that effective date in order to avoid a gap in coverage. You'll need to:
- Complete an Application for Enrollment in Part B (Form CMS-40B); AND
- Complete the top portion and have your employer complete and sign a Request for Employment Information (Form CMS-L564).
8. How Much Are Medicare Premiums?
Most Medicare Part A beneficiaries don't have to pay a monthly premium to receive coverage under this part of Original Medicare; this is called "premium-free Part A." Generally, if you've worked at least 10 years (40 quarters) and paid Medicare taxes while you worked, you're eligible for premium-free Part A. Otherwise, you pay a monthly premium.
You can purchase Part A if you are a U.S. citizen or lawful resident. In 2019 you may have to pay up to $437 each month; premiums are determined based on your quarters of Medicare credit. In most cases you must also enroll in Part B and pay monthly premiums for both.
You pay a monthly premium for Part B of Original Medicare. The fee can be higher for people with high incomes. A different government program, Medicaid, can help cover Medicare Part B premiums for low-income beneficiaries.
Beneficiaries new to Medicare in 2016 and later pay $135.50 for Part B in 2019. (This is called the "standard" Part B premium.)
Because of what is called the "hold harmless" provision, many beneficiairies who became eligible for Medicare before 2016 paid $109.00 for Part B in 2017 instead of the "standard" Part B premium. Under the "hold harmless" provision, increases in Medicare premiums can't cause a person's Social Security benefits to decline from one year to the next. Social Security cost of living increases were $0 in 2016 and .3% in 2017, so increases in Part B premiums were either eliminated or reduced for most of the 70% of Medicare beneficiaries who have Part B premiums automatically deducted from their monthly Social Security payments.
Social Security benefits increased 2% in 2018 and will increase 2.8% in 2019, so the "hold harmless" reductions disappeared in 2018 for most people.
Here's how to determine how this will affect you in 2019. Subtract your current Part B premium from $135.50. Then multiply your current monthly Social Security benefit by 2.8%%. Your 2019 change will be the smaller of these two numbers. Add this figure to your 2018 premium to determine your 2019 premium.
Beneficiaries with Modified Adjusted Gross Incomes (MAGI) above a certain amount (see answer to question 9) pay a higher amount, The tables upon which this amount is based for 2019 were modified because of changes made in the Bipartisan Budget Act of 2018.
9. What Are Part B and Part D Premiums For People With High Incomes?
Individuals filing single returns (as well as married individuals who file separate returns) with income over $85,000 and joint filers with income over $170,000 pay additional premiums both for Medicare Part B and for Part D Prescription Drug plans. These additional premiums are called the "Income Related Monthly Adjustment Amount" (or "IRMAA") and are adjusted annually. Estimates are that 5 to 6% of all Medicare beneficiaries are affected.
IRMAA Changes for 2019
Changes in Part B and D IRMAA's were made in the Bipartisan Budget Act of 2018. A sixth income bracket (above $500,000 for individuals filing singly, $750,000 for couples filing jointly, and $415,000 for married couples filing separate returns) will be added for 2019, and the two income level brackets below the new top bracket will be compressed.See these charts for 2019 IRMAA Part B premiums and for 2019 IRMAA Part D premiums.
Individual filers earning below $500,000 and joint filers earning below $750,000 will see a slight decrease in their Part D IRMAA payments for 2019. Those in the top IRMAA bracket for 2019 will pay $77.40 plus their Part D premium; the highest Part D IRMAA payment for 2018 was $74.80.
See this article for a summary of the changes that have been made for 2019.
IRMAA paymentws affect about 7% of all Medicare beneficiaries. The government is shifting increasing amount of Medicare Part B and D payments to seniors, and IRMAA calculations have changed significantly each year over the past several years.
Individuals who hav experienced one of the following life changing events can file a fom SSA-44 to request a reduction in their IRMAA if one of the following events occurs:
- Death of a spouse
- Work stopage
- Work reduction
- Loss of income-producing property
- Loss of pension income
- Employer settlement payment
If you have more than one life changing event, have any questions, or need help in applying for a reduction, call Social Security at 800-772-1213.
10. How Can I Estimate My Medicare Part B Premium If I Have High Income?
Use this CALCULATOR to determine your Medicare Part B Premium.
11. What Are Part A and B Enrollment Requirements For Medicare Supplement, Medicare Advantage, And Part D Prescription Drug Plans?
You must be entitled to Part A and enrolled in Part B to buy a Medicare Supplement plan. If you're buying a plan during open enrollment or have a guaranteed issue right, there are no health questions to answer. Otherwise, you must pass the carrier's medical underwriting requirements to be eligible. You can buy a Medicare Supplement Plan any time during the year. LEARN MORE ABOUT MEDICARE SUPPLEMENT PLANS.
You must be entitled to Part A AND enrolled in Part B to enroll in a Medicare Advantage plan. There are no medical requirements, except a question about end stage renal disease. Generally, if you have ESRD, you can't buy a plan from a carrier unless you/ve had continuous coverage from that carrier prior to applying for a Medicare Advantage plan from that carrier. You can buy a Medicare Advantage plan only (1) when you are first eligible; (2) between October 15--December 7 for a January 1 effective date; or (3) during a Special Enrollment Period. You can change to a different Medicare Advanatage or Medicare Advantage Prescription Drug Plan between January 1-March 31, 2019 if you already have a Medicare Advantage or Medicare Advantage Prescription Drug Plan as of January 1, 2019. LEARN MORE ABOUT MEDICARE ADVANTAGE (PART C) PLANS.
You must be entitled to Part A OR enrolled in Part B (whichever occurs first) in order to buy a Part D Prescription Drug plan. There are no medical questions. You can only buy a Part D Prescription Drug plan when you're first eligible, between October 15--December 7 for a January 1 effective date, or during a Special Enrollment Period. LEARN MORE ABOUT PART D PRESCRIPTION DRUG PLANS.
12. How Can Someone Save Money On Health Care Or Drug Costs?
You may qualify to save money on health care and/or drug costs if you are eligible for any of these programs.