Medicare is our government’s health insurance plan for people age 65 or older (with exceptions). There are four parts to Medicare; Part A (Hospital Insurance), Part B (Medical Insurance), Part C (Medicare Advantage plans) and Part D (Prescription drug coverage). Understanding Medicare can be complicated and frustrating for many people.
Here are some important tips, information and nuances about Medicare which can be helpful:
- If you are not currently receiving Social Security retirement, apply for Medicare Part A three months before you turn age 65. Delaying your application (“window” is three months before and after your 65th birthday) will delay your coverage and result in higher premiums.
- If you are already receiving Social Security retirement, you will be contacted by Medicare before your eligibility date and automatically be enrolled in Medicare Part A and Part B. If you do not want Part B, there will be cancellation instructions on your card, which you will send back. If you keep the card, you keep Part B.
- Failure to enroll in Medicare Part B during the enrollment “window” will increase your monthly premium by 10% for each 12 month period you did not enroll in. Some special exceptions do apply for persons covered by an employer health care plan.
- Premiums for Medicare Part B are based upon your taxable year’s Modified Adjusted Gross Income (MAGI) and can range from $104.90 to $335.70 per month. They may change from year to year depending on your MAGI.
- Failure to enroll in Medicare Part D when you are eligible and not covered by another prescription drug coverage plan will trigger a penalty of 1% (of the national base beneficiary premium which is $32.42 in 2014) for each month you delayed your application after becoming eligible. This penalty is added to your monthly premium and will remain for as long as you have a Medicare drug plan. Regular premiums are based upon your MAGI from 2 years ago and persons with a higher MAGI will pay an income related monthly adjustment amount (IRMAA) in addition to their plan premium. IRMAA can range from $0 to $69.30 and could change annually depending on your MAGI.
- Admission to a hospital under “observation” status instead of “inpatient” can result in substantially higher out of pocket charges. Medicare Part A will not pay for observation status admission to a hospital. Furthermore, follow up nursing home care and prescription drugs administered during the stay are not covered by Medicare for patients under “observation” status.
- If you want a family member or friend to call Medicare on your behalf, a specific Authorization form must be filled out (can be printed off the Medicare website). Otherwise, health information can only be given directly to you.
- Consider signing up for MyMedicare.gov, which is a secure online service where you can access your personal Medicare information directly, track your health care claims, find out information about your Medicare health plans and other information.
Be sure to verify that your situation pertains to the information in this blog. A great source for information is available online at www.medicare.gov which outlines all aspects of Medicare including the application process, coverages, claims and appeals and publications. Specific questions can be answered by calling 1-800-Medicare.
The author of this article, George S. Urist, MBA, CFP® is President and Owner of Urist Financial and Retirement Planning, Inc., located in East Syracuse, New York. George Urist has been a CERTIFIED FINANCIAL PLANNER™ practitioner and Registered Representative with LPL Financial for over 26 years. George can be followed on twitter @gurist and can be reached at 315-445-2147 or george.urist@lpl.com. Company information can be found at www.uristfinancial.com. Securities offered through LPL Financial. Member FINRA/SIPC