Medical doctor holding hands of senior patient with insurance form.

Medicare Basics

Medicare Parts A & B Plus Medicare Advantage plans

Medicare generally starts at age 65 while Social Security can begin at any age between 62 and 70. You will need to make decisions regarding if you wish to enroll in Medicare Part B, Medicare Advantage or Medigap (Medicare Supplements). You will also need to decide if a prescription drug plan is right for you, either a Medicare Part D or a MAPD plan. You could also choice to remain in original Medicare Parts A & B. Note that delaying your decisions could significantly and permanently increase your cost of coverage. Thus, make these decisions early and carefully.

Medicare Part A covers most in hospital charges and is available at zero cost for most people once they turn 65 years old, regardless of income. (some disable people, people with ALS, and End-Stage Renal Disease may qualify before age 65)

Medicare Part B covers most costs associated with outpatient services, doctor visits, lab work, etc.  Most people must apply to get this insurance. There is a cost of $144.60/month in 2021. (Higher monthly charges may apply for high-income individuals.) Suppose you do not apply for Part B during your Initial Enrollment Period and have not had other credible coverage. In that case, you may be subject to a Part B late enrollment penalty.

If you miss your IEP, unless you are eligible for a Special Enrollment Period, you must wait for the next General Enrollment Period (January 1- March 31). The coverage will start July 1.   It’s important not to wait to avoid a gap in coverage and the late enrollment penalty.

You can apply for Part B on the website: Part B Application or at your Social Security office

Medicare Part C is often known as Medicare Advantage Plan or MA plan. MA are private health insurance companies that administer Medicare A & B benefits. These plans typically offer significantly more services than Medicare parts A and B alone. You must be enrolled in Original Medicare Parts A & B to be eligible for such plans. MA plans cover many of the deductibles and co-pays required by original Medicare Part A and B.  Additional benefits such as vision, dental, and hearing are just some of the supplemental benefits available in MA plans.

There are several types of Medicare Advantage plans, and the most popular are HMO and PPO plans. Medicare Advantage HMO plans often have a low or zero premium cost and protect your expenses with an annual out-of-pocket limit. Generally, you will get care from in-network providers and facilities, except for emergency care, available in or out of network. You will select a primary care provider (PCP) who coordinates your care, including referrals to specialists. 

Some Medicare Advantage PPO and POS plans may have a more extensive selection of doctors, allow for out of network doctors, and allow self-referrals.  Medicare Advantage Plans vary by company and region.

Most Medicare Advantage Plans have limited coverage outside of their coverage area. They may be less suitable for people who frequently travel or live in multiple states. You can sign up for Part C plans (MA plans) during your Initial Enrollment Period or the Annual Open Enrollment Period, AOEP, (October 15 to December 7). You can also switch between Medicare Advantage plans during the Open Enrollment Period, OEP, (January 1 to March 31).

Most Medicare Advantage Plans have an option to include prescription drugs (Medicare Part D) as part of the plan. These plans are known as MAPD plans. (You typically cannot purchase a Medicare Advantage plan and separate Part D plan.) The MA only programs (without drug coverage) may be well suited when paired with plans with other drug coverage, such as VA coverage.

Medicare Part D Plans (PDP) help cover prescription drug costs. If you desire drug coverage, you must select an MAPD plan or a private insurance company’s standalone Part D plan.  You are eligible for a standalone Part D plan with either Part A or B or both Part A & B.  You cannot have both a Part D and an MAPD plan.

If you do not apply for Part D or an MAPD during your Initial Enrollment Period, you must wait for the next Annual Enrollment Period (October 15 to December 7) to get Part D prescription coverage unless you qualify for a Special Election Period.  Every month you wait will add 1 percent to your monthly premium for each month you do not have Part D coverage, so don’t wait. (If you have “creditable” drug insurance through yours or your spouse’s current work, the penalty will not apply providing you sign up within 63 days after your other coverage ends.)

Medicare Supplement Insurance also known as Medigap

Medicare Supplement Insurance is also known as Medigap. Medigap is an alternative to Medicare Advantage. You cannot have both. While Medicare Parts A and B (also called “Original Medicare”) cover some healthcare costs, they do not pay for everything. Medigap from private insurers complement your Medicare coverage and help pay for some of your out-of-pocket expenses not paid by Medicare. Standardized Medicare supplement insurance plan benefits are established by the federal government and regulated by the state. That means the basic benefit structure for each plan is the same, no matter which insurance company sells it to you, but prices vary. Do not confuse the Medigap “Plan” letters (i.e. A, N, G, F) with the Medicare “Part” letters. Often a person with a Medigap plan will also buy a Medicare Part D plan to gain prescription drug coverage.

Medicare Supplement Insurance or Medigap plans may be purchased without underwriting during the six-month period that begins the month you are 65 or older and enrolled in Medicare Part B. If you delay enrollment due to having other credible coverage, you still have the guaranteed issue right within 63 days of when you lose or end your coverage.  If you previously had a Medicare Advantage Plan and you move out of the plans service area, or lose coverage at no fault of your own, you can buy a Medigap policy.

You can buy a Medigap policy outside of these protected periods, but you may be denied based on health underwriting, or there may be waiting periods for pre-existing conditions.  In California, you can change Medicare Supplemental policies with a guarantee issue during the period 60 days after your birthday each year.  However, you are limited to moving to a like or lesser plan.

Some advantages of a Medicare Supplement Insurance as compared to Medicare Advantage Plans include:

  • Keep your own doctor without network restrictions, as long as they accept Medicare patients.
  • Coverage goes with you when you travel in the U.S., ideal for multi-coastal people.
  • You may visit any specialist who accepts Medicare patients without a referral.
  • Ideal for people who receive medical treatment in multiple states or areas.

Medicare Enrollment Timing

Initial Enrollment Period (IEP) (age 65) is a 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65 and ends 3 months after you turn 65 (waiting until later can increase your cost of Part B and Part D)

Annual Open Enrollment Period (AOEP) (Oct. 15 to Dec. 7) also known as the Fall Open Enrollment. During this time, anyone with Medicare Parts A & B can add a Medicare Advantage, MA, plan or can switch between Medicare Advantage plans or if already in a MA plan can switch back to Original Medicare Parts A & B. This is also the time you can enroll in Medicare Part D provide you are not in a Medicare Advantage Plan. Multiple changes are allowed but the last coverage you select during this period becomes enforce on the following Jan 1st.

General Election Period (Jan 1st to Mar. 31) This is the period you can sign up for Medicare Part B if you did not already sign up during your Initial Election Period. If you initially sign up for Medicare Part B during this period, your Part B coverage will begin on July 1. 

Medicare Advantage-Open Enrollment Period (MA-OEP) (Jan. 1 to Mar. 31st) you can only use this enrollment period if you are already enrolled in a Medicare Advantage Plan. You can opt out of a Medicare Advantage plan switch to a different Medicare Advantage plan or return to the original Medicare program Part A & B. During this period, you can also join a stand-alone Part D drug plan if you are dis-enrolling from a Medicare Advantage plan. Unlike AOEP, only one change is allowed during this period. Your new coverage will begin the very next month.

Special Medicare Enrollment Periods

Special Enrollment Period (SEP) allows you to join, switch or drop Medical Advantage plan or a Medicare prescription drug plan, Part D, if one of many special circumstances apply to you. Common SEP include:

  • You move outside the coverage area
  • Your plan changes coverage area or stops coverage 
  • You lose coverage from yours or your spouse’s employment health plan
  • You become eligible for a Special Needs Plan (SNP)
  • You wish to enroll in a five-star plan
  • You have consistently been in a low-performing Medicare Advantage or Part D Plan
  • You become eligible for Medicaid (Medicaid is for lower income people)
  • And many others

This is only a summary of few of your Medicare options. Other options include PACE programs and Medicaid, Medicare Spending Programs. There is no substitute for talking to a trained Medicare expert for selecting your Medicare options.

Go to the calendar link below to schedule an appointment with an expert, Curtis Hill. Discover how a discussion with the right person can make a difference in your coverage and in your insurance and medical costs. Learn how “Not the same old advice” can benefit you.