Medicare Does Not Have To Be Hard

“I’ve been researching online for the last 2 weeks and I am more confused now than when I started.”

-Randal W. Houston, TX (actual customer quote)

We have clients who bring out entire bags of mail that they never even opened because the volume was so overwhelming and they didn’t understand what they were reading.

If you are new to Medicare, you might feel the same way. With all the parts and plans to Medicare and the endless commercials and mailings, it can be hard to get things straight in your mind. How does this work?

Who Can Get Medicare?

You must be a citizen or legal residents. A legal resident must have lived in the United States for at least 5 years in a row including the 5 years immediately preceding applying for Medicare. You must also be:

• Age 65 or older or…
• Younger than 65 with a qualifying disability for at least 24 months or…
• Any age and diagnosed with ALS or ESRD

What Are The Parts of Medicare?

There are 4 parts to Medicare: A, B, C, D

Part A
Helps pay for hospital stays, inpatient care, hospice, and skilled nursing.
For most people Medicare Part A is premium free by virtue of a life full of working and paying taxes. In fact, most beneficiaries do not have to pay premium for Part A. The work requirement is working 40 quarters (10 years) and pay payroll taxes. For those that did not work 40 quarters, there will be a premium. The premium charged will depend on how many quarters worked.

Hospital Stay:
• You pay a $1,600 deductible per benefit period (up to 60 days)
• Then $400 per day for days 61-90 of each benefit period
• Additionally, $800 per lifetime reserve day (maximum of 60 days)

Skilled Nursing Confinement:
•Medicare pays all eligible expenses for the first 20 days. You pay a copay of $200 per day days 21 – 100 of each benefit period. You are responsible for all costs each day after day 100 of the benefit period.

**There is NO out-of-pocket maximum limit.

Part B
Helps pay for Doctors and other outpatient care and services
Part B cost is based on your income. Most people pay the standard rate which is $164.90/mo (2023). This premium is deducted from your social security payment of you are receiving benefits. If you haven’t started taking your social security, you will be billed quarterly. For people who earn more, you might be charged an IRMAA (Income Related Monthly Adjusted Amount). Medicare calculates your IRMAA by looking at your Modified Adjusted Gross Income (MAGI) to determine your additional premium. Your MAGI is determined from your IRS tax return from two years prior. Currently about 5% of beneficiaries must pay more than the standard rate.

Deductible: You pay a one-time deductible of $226 per year for 2023. This is subject to change annually.

Other Costs: You must pay 20% of the Medicare-approved amounts for qualifying medical services, plus Excess Charges (if applicable).

**There is NO out-of-pocket maximum limit.

Parts A& B are commonly known as “Original Medicare”

Part C
Combines Part A and B of Medicare into one plan and is offered by private companies. These plans usually include prescription drug coverage.
Part C consists of Medicare Advantage plans. You must be enrolled in both Parts A and B to be eligible for Medicare Part C. You still must pay any premium associated with Parts A&B (including any IRMAA assessed). There could be an additional premium for a Medicare Advantage plan. Premiums for these plans will depend on the type of plan you choose and can range from $0 up to $200/mo or more.

Part D
Helps pay for prescription drugs.
Part D prescription drug plans are offered by private companies contracted by Medicare for this purpose. Part D can be acquired within a Medicare Advantage Prescription Drug Plan (MAPD) or as a stand-alone plan. Within a MAPD plan, the Part D plan may or may not have a monthly premium. As a stand alone plan, premiums can run as low as $7/mo for a basic plan and as high as $100/mo (or more) for plans with enhanced coverage (2023). Which type of plan you enroll in should be determined by a thorough analysis of your prescription drug needs and which type of coverage you desire. Like Part B, people who earn more could have an IRMAA added to the Part D plan premium.

How Do I Enroll?

If you are receiving Social Security or Railroad Retirement Board benefits, enrollment in Medicare is automatic when you become eligible. You will get your card in the mail.

If, however, you are not receiving benefits, you will have to enroll yourself when you become eligible. You can enroll online, call or visit the local Social Security office.