Medicare is the federal health insurance program for people age 65 and older, people under age 65 with certain disabilities, and people of all ages with End-Stage Renal Disease or ALS. If you receive Social Security Benefits or Railroad Retirement, you will automatically be enrolled in Medicare starting on the first day of the month you turn 65. If you are under age 65 and disabled, you will be eligible for Medicare after you get disability benefits from Social Security or Railroad Retirement for 24 months. Your Medicare card will be mailed to you about three months before your 65th birthday, or your 25th month of disability benefits.
If you are not getting Social Security or Railroad Retirement benefits, you must enroll in Medicare. Enrollment DOES NOT HAPPEN AUTOMATICALLY. Depending on your work history, you may have to pay a premium to receive Medicare. Also, if you do not enroll in Medicare when you are eligible, you may have to pay a penalty. Different parts of Medicare have different penalties for late enrollment, all of which are substantial.
Parts of Medicare
The different parts of Medicare help cover specific services
Medicare Part A (Inpatient services)
Medicare Part A covers inpatient services in hospitals, skilled nursing facility care, hospice care, and home health care.
The different parts of Medicare help cover specific services
Medicare Part B (Medical Insurance)
Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
Medicare Part C (Medicare Advantage Plans)
A type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. Most Medicare Advantage Plans offer prescription drug coverage. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. Plans must cover all medically necessary services that Original Medicare covers. Plans may also offer some extra benefits that Original Medicare doesn’t cover – like vision, hearing, and dental services.
Supplemental coverage
Medicare Supplement Insurance (Medigap) is extra insurance you can buy from a private insurance company to help pay your share of costs in Original Medicare. Most Medigap policies do not have drug coverage so you would need to take out a “Stand Alone” drug plan.
You get a 6 month “Medigap Open Enrollment” period, which starts the first month you have Medicare Part B and you’re 65 or older. During this time, you can enroll in any Medigap policy and the insurance company can’t deny you coverage due to pre-existing health problems. After this period, you may not be able to buy a Medigap policy, or it may cost more. Your Medigap Open Enrollment Period is a one-time enrollment. It doesn’t repeat every year, like the Medicare Open Enrollment Period. https://www.medicare.gov/health-drug-plans/medigap/basics
Medicare Part D (Prescription Drug Coverage)
Part D adds prescription drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private-Fee-for-Service Plans, and Medicare Medical Savings Account Plans. These plans are offered by insurance companies and other private companies approved by Medicare. Medicare Advantage Plans may also offer prescription drug coverage that follows the same rules as Medicare Prescription Drug Plans.
HSA
Be aware that if you have a Health Savings Account, there is important information to review 6 months before you turn 65 or get ready to take out Medicare. This Fact sheet (https://www.cms.gov/Outreach-and-Education/Find-Your-Provider-Type/Employers-and-Unions/FS4-Medicare-for-people-over-65-nearing-retirment.pdf) can guide you through decisions related to your Medicare and Health Savings Account. For further guidance please reach out to your financial advisor.
Medicare Enrollment
Timing is everything when you are enrolling in Medicare, and a lot depends on your specific situation. Turning 65 is a big life event, and thousands of baby boomers are doing it every day.
Here’s what you need to know to get started
- You can start Medicare benefits at age 65- You may also use your current or former spouse’s work history to get medicare benefits if you have not worked enough quarters to get premium free Part A. Contact Social Security (SSA.gov) to see if you qualify for spousal benefits.
- If you continue to work past age 65, options are available to continue Medicare benefits or opt out of various parts of Medicare.
- You may enroll in Medicare even if you’re not collecting Social Security yet. Be advised that you will be billed quarterly for your Medicare Part B.
Your first chance to sign up for Medicare is called your Initial Enrollment Period. It happens around your 65th birthday and lasts a total of seven months. It includes your birthday month plus the three months before and the three months after. It’s best to sign up early to avoid gaps in coverage and late enrollment penalties.
You may be enrolled in Medicare automatically if you currently receive Social Security or Railroad Retirement Board benefits. You will receive your Medicare card in the mail a few months before your 65th birthday. You still have an initial enrollment period during which you may make Medicare coverage decisions.
Initial Enrollment Period
You have many choices when it comes to Medicare. Your initial enrollment period is the time to make decisions about the kind of coverage you need. You may:
- Enroll in Part A, Part B or both.
- Make other coverage choices if you enroll in both Parts A and B.
You must notify Medicare if you were enrolled in Part B automatically and choose to delay or refuse it. Follow the directions on the back of your Medicare card. Note that you could be charged a Part B premium penalty if you decide to enroll in Part B later, unless you qualify for a Special Enrollment Period.
Working Past Age 65
A lot of people reach the age of Medicare eligibility and continue to work. Many have health insurance through their employers. What about Medicare?
Here’s what you need to know:
- You still have a Medicare Initial Enrollment Period (IEP) when you turn 65. You may want to enroll in Part A during this time. It’s premium free, as long as you or your spouse worked and paid Medicare taxes for at least 10 years.
- You have to be proactive and enroll in Medicare yourself. Medicare doesn’t notify you about your IEP unless you currently get Social Security or Railroad Retirement Board benefits.
- You may qualify for a Medicare Special Enrollment Period (SEP) that allows you to delay enrolling in Part B and Part D without incurring late enrollment penalties. You need to get confirmation of creditable coverage from your employer.
- You may delay enrollment in Medicare if you plan to work past age 65. You must be actively working or have coverage through your spouse’s employer, have creditable employer coverage, and have more than 20 employees in the company. Check with your employer benefits coordinator to see if you qualify for delaying Medicare.
What if I miss my enrollment period?
Medicare provides a General Enrollment Period (GEP) every year for people who missed signing up when they were first eligible. It’s like make-up time for Medicare enrollment.
The General Enrollment Period is January 1 – March 31 every year.
Here’s what you need to know:
- You can enroll in Part A, Part B or both during this time.
- Coverage begins on the first day of the month following enrollment.
- You may have to pay a late enrollment penalty if you don’t sign up for part B or D at age 65 and if you don’t have creditable coverage.
- You may be eligible to enroll in a Medicare Advantage (Part C) or a prescription drug (Part D) plan.
Late Enrollment Penalties
Medicare Part A Premium Penalty
Part A is premium free if you or your spouse worked and paid taxes for at least 10 years or 40 quarters. If you have to pay a premium, the penalty for late enrollment is 10%.
The Part A premium penalty is charged for twice the number of years you delay enrollment. If you wait two years, for example, you would pay the additional 10% for four years (2 x 2 years). The penalty applies no matter how long you delay Part A enrollment.
Medicare Part B Premium Penalty
The penalty for late enrollment in Part B is an additional 10% for each 12-month period that you delay it. If your Initial Enrollment Period ended September 30, 2013, for example, then you enroll in Part B during the General Enrollment Period in March 2016. Your late enrollment penalty would be 20% of the Part B premium, or 2 x 10%. This is because you waited 30 months to sign up, and that time period included two full 12-month periods.
In most cases, you have to pay the penalty every month for as long as you have Part B. If you’re under 65 and disabled, any Part B penalty ends once you turn 65 because you will have another Initial Enrollment Period based on your age.
Medicare Part D Premium Penalty
The penalty for late enrollment in a Part D plan is 1% of the average Part D premium for each month you delay enrollment. You pay the penalty for as long as you are enrolled in a Medicare Part D plan.
You may delay enrolling in Medicare Part D without penalty if you qualify for Extra Help or have creditable drug coverage. If it’s been more than 63 days since you have had creditable coverage, then the penalty may apply.
Changing Your Medicare Plan
Most people keep the same Medicare plan year after year without questioning whether it is still a good choice. That could be a mistake. Changing plans is sometimes a wise thing to do. At SeniorAge, we recommend evaluating your plan each year to ensure you are receiving the best plan and the best rates available.
Plan coverage and costs may change from year to year, and your health care needs could change, too. You can change your Medicare Plan each year during Medicare Open Enrollment or during a Medicare Special Enrollment Period if you qualify.
Medicare Open Enrollment takes place every year, October 15 – December 7. It is similar to the open enrollment you may have experienced with employer coverage, which generally takes place in the fall. A big difference with Medicare is that you are likely to have more coverage options than you did as an employee. Any changes you make will go into effect in January of the following year.
Here are the kinds of changes you can make during Medicare Open Enrollment:
- Change from Original Medicare (Parts A and B) to a Medicare Advantage (Part C) plan or vice versa.
- Switch from one Medicare Advantage plan to a different Medicare Advantage plan.
- Join, switch or drop a Medicare prescription drug (Part D) plan. You may be charged a premium penalty if you drop Part D coverage and want it again later.
Medicare Special Enrollment Period
A Special Enrollment Period (SEP) allows you to join, change or drop a Medicare Advantage (Part C) or prescription drug (Part D) plan outside of Medicare Open Enrollment in certain situations, such as when you move. These situations are called a “qualifying events.”
In general, you have two full months after the month of a qualifying event to make plan changes.
Some common events that may qualify for this Special Enrollment Period include:
- You are moving outside your current Medicare plan’s service area.
- You are moving within your current plan’s service area, but you have new plan options.
- You are moving into or out of an institution.
- You are leaving retiree, union or COBRA coverage.
- You are losing creditable drug coverage.
- Your current Medicare plan stops servicing your area.
Medicare Advantage Open Enrollment Period
- The Medicare Advantage Open Enrollment Period gives you a chance to leave a Medicare Advantage plan and go back to Original Medicare. This time period happens every year, January 1 – March 31st. You may use it to change plans only if you have a Medicare Advantage plan.
- If you go back to Original Medicare at this time, you may enroll in a stand-alone Medicare prescription drug (Part D) plan until March 31st. as well. Drug coverage is not provided with Original Medicare. You may incur a premium penalty if you don’t enroll in a Part D plan at this time and decide you want to later.
CLAIM
CLAIM is the Missouri State Health Insurance Assistance Program. Trained counselors provide free, unbiased advocacy, education and assistance to people with Medicare and those who help them to make informed decisions about Medicare and related health insurance needs.
Visit https://missouriclaim.org/ for more information
Additional Money Savings Programs
SeniorAge can help you put money back into your pocket through these other important money savings programs. PLEASE NOTE – Gross income is the total amount of income before any deductions are applied. Social Security, wages, IRA disbursements, interest income, pensions, etc. are all income considered.
Contact Senior Age Area Agency on Aging to ask questions and find local help.
Extra Help or Low Income Subsidy (LIS)
Reduces Medicare Part D Premiums, deductibles, drug co-pays, and eliminates coverage gap or doughnut holes.
- SINGLE – Gross monthly income less than $1,843 & resources less than $16,660
- MARRIED – Gross monthly income less than $2,485 & resources less than $33,240
Medicare Savings Program (MSP)
Pays Medicare Part B premium.
- SINGLE – Gross monthly income less than $1,660 & resources less than $9,090
- MARRIED – Gross monthly income less than $2,239 & resources less than $13,630
Mo HealthNet (Medicaid for Aged 65+, Blind, Disabled)
Pays medical services (secondary to Medicare). Incomes higher than the amounts listed may qualify as a spend down status (pay a premium before MO HealthNet will pay for services). Do not have to have Medicare to be eligible for MO HealthNet.
- SINGLE – Gross monthly income less than $1,033 & resources less than $5,302
- MARRIED – Gross monthly income less than $1,397 & resources less than $10,604
MO HealthNet (Medicaid for Age Eligible Group Age 18-64)
- SINGLE – Gross monthly income less than $1,616. No resource limit.
- MARRIED – Gross monthly income less than $2185. No resource limit.
Low Income Home Energy Assistance Program (LIHEAP)
Provides one-time payment to the utility company to help with heating costs. Seniors who exceed the guideline are encouraged to apply because they are allowed a medical deduction.
- SINGLE – Gross monthly income less than $2,370 & resources less than $3,000
- MARRIED – Gross monthly income less than $3,099 & resources less than $3,000
Low income Home Water Assistance Program (LIHWAP)
Provides one-time payment to the utility company to help with your water and/or sewer bill.
Max amount one can get is $750
- SINGLE – Gross monthly income less than $2,370 & resources less than $3,000
- MARRIED – Gross monthly income less than $3,099 & resources less than $3,000
Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps)
Provides credits on an EBT card to buy food at the grocery store.
- SINGLE – Gross monthly income less than $1473 & resources less than $4,250
- MARRIED – Gross monthly income less than $1,984 & resources less than $4,250
Missouri Property Tax Credit (MO-PTC)
Must be 65 or 100% disabled and a Missouri resident for the entire year. Rent Rebate: Qualified persons may receive up to $750 based on the rent paid.
- SINGLE – Gross income less than $27,500
- MARRIED – Gross income less than $29,500
Real Estate Property Tax Rebate for homeowners:
May receive up to $1,100.
- SINGLE – $30,000
- MARRIED – $34,000
Home and Community Based Services (HCBS)
Must be 63 or older to qualify. Pays for in-home services and prescription medications tthrough Medicaid.
(Income applies to the person needing services)
- SINGLE – $1,598 with allowable resources less than $5,302
