Medicare is a rather complicated program. When you are new to it at 65, it can be especially confusing. Fortunately, if you master some of the basics, everything gets easier from there.
These are the most important things you should know about Medicare in 2019.
Medicare Costs Money
Medicare has two parts and while one of them has a $0 premium for most people, the other does not. During your working years you pay taxes toward your future hospital benefits, and this is why Part A costs $0 at age 65 for about 99% of all beneficiaries.
However, Parts B and D have premiums that you’ll pay the entire time you are enrolled. The standard base premium is $135.50 in 2019, and about 95% of all beneficiaries pay this amount. However, some individuals with higher annual household incomes will spend more. Social Security assesses an adjustment for people in these income categories.
Part D is Medicare’s drug program. On average, most people spend around $35/month for their drug coverage. However, there are dozens of plans to choose from in each state, so you can shop for the plan that is the most cost effective for your medications.
Enrolling Late Can Cause Penalties
Medicare beneficiaries have an initial enrollment period that lasts for 7 months. It’s important to enroll in this window unless you have other creditable coverage such as through an employer group health plan.
If you don’t have any other creditable coverage and you skip enrolling in Medicare during this window, Medicare will assess a late penalty of 10% per year for every year that you wait to enroll.
There are Two Main Types of Additional Coverage
Since Medicare only covers about 80% of your costs, most beneficiaries enroll in some sort of supplemental coverage to help them pay for the other 20% and for their deductibles and copays. Medigap plans, or Medicare Supplements, are a form of coverage that pays after Medicare to cover some of your cost-sharing. Medicare Advantage plans, on the other hand, are a form of private insurance that pays instead of Medicare. You can only enroll in one type of additional coverage or the other, so it’s important to read up on how both types of coverage work.
A Popular Medigap Plan Is Ending In 2019
Medicare supplements are standardized by the federal government. The most comprehensive plan you can buy in 2019 is Plan F. It covers all of your Medicare cost-sharing. However, as of January 1st, 2020, new Medicare enrollees will no longer be able to buy this plan or Medigap Plan C. These two plans are being phased out for new enrollees, but beneficiaries who are enrolled in Medicare prior to 2020 will be grandfathered and will still be able to buy these plans.
You Must Make Changes During Valid Election Periods
The Annual Election Period is a window of time each year during which seniors can make changes to their Medicare Part D and/or Medicare Advantage coverage. This window runs from October 15th to December 7th. During this election period, you can enroll in new coverage, change from one plan to another or disenroll from coverage that you no longer want.
The fall election period, however, is not an opportunity to change your Medicare Supplement plan without answering medical questions. Changing from one Medigap plan to another can be done any time of year. However, in most states, you will go through medical underwriting to see if you qualify for a new plan.
There is also a new election period for 2019 called the Open Enrollment Period. This period will last from January 1st to March 31st, and during this window, Medicare Advantage members can make a one-time switch. You can change from your existing Medicare Advantage plan to another Advantage plan. You can also choose to disenroll and return to Original Medicare and a Part D drug plan.
Always Check with Your Doctor to Confirm Participation
While around 90% of physicians do accept Medicare, there are some who don’t. There are also many doctors who participate in Original Medicare but do not participate in certain Medicare Advantage plans. Advantage plans have networks.
So, before you enroll in any coverage, be sure to ask your providers if they accept Traditional Medicare and/or if they participate in any of the Medicare Advantage plan networks. This will help to ensure that the coverage you choose is coverage that allows you access to your favorite providers. You can also check the plan directories online.
If your provider accepts Original Medicare, then he or she plan will also accept any Medigap plan. These plans can be used nationwide, no matter which carrier you buy the coverage from. It’s only the Advantage plans that have networks.
However, Medigap plans are different than Medicare Advantage plans. Your Medigap plan pays after Medicare. Therefore, your doctor never bills your carrier directly; Medicare does. The only question you need to ask your doctors is if they accept Original Medicare. Because if they do, they will accept your Medigap plan, regardless of which company you bought it from.
