MEDICARE BASICS

What is Medicare

Medicare is a comprehensive health insurance program offered by the U.S. federal government, primarily for individuals aged 65 and older, as well as for certain younger individuals with disabilities and specific illnesses.

Who qualifies for Medicare

Most people become eligible for Medicare at age 65 when they are U.S. citizens or lawful permanent residents who have lived in the U.S. at least 5 continuous years prior to the month of filing an application for Medicare. Those with certain disabilities and illnesses or who have received Social Security disability benefits for at least 24 months also qualify.

When to Enroll in Medicare

These are just guidelines. For specific advice, schedule an appointment to discuss your personal situation.

If you are 65 and retiring, you should sign up for Medicare Parts A & B to ensure you have adequate health coverage and avoid late enrollment penalty.

If you are still working, either self-employed or employed by a company with fewer than 20 employees, you should enroll in Medicare Parts A & B to cover your healthcare needs and avoid late enrollment penalty.

If you continue to work for a large employer with 20 or more employees and you have creditable coverage, you do not need to sign up for Medicare Part B right away.

Please keep in mind. If you enroll in Medicare Part A and/or B, you can no longer contribute pre-tax dollars to your HSA. This is because to contribute pre-tax dollars to an HSA you cannot have any health insurance other than an HDHP

See the page When To Enroll for more information on deciding when to enroll in Medicare.

New to Medicare

The only parts of Medicare you will enroll in with the Social Security office are your Original Medicare Parts A & B. All other Parts and supplemental coverage enrollments are done through an insurance agent or agency.

How: To sign up for Original Medicare (Part A & B), you can either complete the process online through the official Medicare website or schedule an appointment at your local Social Security office. If you have other creditable insurance coverage, you might be able to delay Medicare past age 65 without a penalty.

When: Most people sign up for Medicare during their 7-month Initial Enrollment Period. The Initial Enrollment Period (IEP) is your first chance to sign up for Medicare. It starts 3 months before your 65th birthday, includes the month you turn 65, and ends 3 months after the month you turn 65 to avoid late enrollment penalties. Ideally, you should enroll 3 months before the month you turn 65 to to ensure your benefits begin on time.

If you don't sign up for Part B (Medical Insurance) during your IEP, you can only sign up for Part B during the General Enrollment Period between January 1 - March 31 each year. Your Part B coverage will start the month after you sign up, and you may have to pay a late enrollment penalty for not enrolling in Part B when you were first eligible. Learn more about how to sign up and the late enrollment penalty.

Automatic Enrollment
If you receive Social Security benefits or RRB Benefits at least 4 months before you turn 65
You’ll get Part A (Hospital Insurance) and Part B (Medical Insurance) and a welcome package with your Medicare card 3 months before your Medicare coverage starts

See the page Applying for Medicare for detailed instructions on the application process.

Is Medicare Mandatory at Age 65?
No, enrolling in Medicare at age 65 is not mandatory. However, if you delay enrollment without having other credible medical coverage, like insurance from a large employer, you may face significant penalties.

Setting Up Medicare Easy Pay
If you haven't started receiving Social Security payments yet, you'll be billed quarterly for your Medicare Part B premium by mail.

If you are already receiving Social Security benefits, your Medicare Part B premium will automatically be deducted from your monthly Social Security payment.

To simplify this process, you can set up Medicare Easy Pay. This service allows your monthly premiums to be directly withdrawn from your bank account each month, ensuring timely and hassle-free payments.

UNDERSTANDING MEDICARE COVERAGE

Original Medicare Coverage
Original Medicare consists of only Part A and Part B, typically covering 80% of approved medical costs. Beneficiaries are responsible for the remaining 20%, which can result in substantial out-of-pocket expenses.

Coverage for Gaps in Medicare
While Original Medicare provides substantial coverage, it does not cover all healthcare expenses. Beneficiaries must still handle deductibles, co-pays, and co-insurance, leading to significant out-of-pocket costs. To manage these additional expenses, many individuals seek coverage beyond Original Medicare. The two main options are:

Medicare Supplement Plans (Medigap): These plans help cover the gaps left by Medicare Parts A and B, including deductibles, co-pays, and co-insurance. Medigap plans are standardized and offered by private companies.

Medicare Advantage Plans (Part C): These plans replace Original Medicare and offer additional benefits. They combine Parts A and B and often include Part D (prescription drug coverage), along with extra benefits like vision and dental coverage.

PARTS OF MEDICARE

Part D (Prescription Drug Coverage) Prov

Medigap (Medicare Supplement Insurance):

Not part of Medicare, but works alongside Original Medicare
Sold by private insurance companies
Helps cover out-of-pocket costs not covered by Parts A and B, such as copayments, coinsurance, and deductibles

Medicare Part A – Hospital Insurance
Medicare Part A helps cover the costs of inpatient care, skilled nursing facility stays, hospice, and home health care. It generally covers the cost of your hospital room and board, including the cost of a semi-private room. However, Part A does not cover all treatments in a hospital or clinical setting, such as outpatient surgeries, which may fall under Part B. Part A is typically free at age 65 if you’ve earned at least 40 work credits by paying Medicare taxes during your working years. It may also be available for free through a spouse’s or ex-spouse’s work history. If you don’t qualify for premium-free Part A, you can get it by paying a premium.

For more details on the cost of Part A, visit our Medicare Part A page.

Medicare Part B – Medical Insurance
Medicare Part B covers outpatient medical services, including doctor visits, lab tests, preventive services, ambulance services, and outpatient surgeries. It also covers essential treatments like cancer therapy and kidney dialysis. The cost of Part B is set by Social Security and adjusts annually. Individuals in higher income brackets pay more than those in lower income brackets, with premiums determined by your modified adjusted gross income reported to the IRS.

If you have a high income, you may pay a higher monthly premium for Part B and Part D, known as the IRMAA (Income-Related Monthly Adjustment Amount) charge.

For more details on the cost of Part B, visit our Medicare Part B page.

Medicare Part C – Medicare Advantage
Medicare Part C, Medicare Advantage, is an alternative to Original Medicare (Parts A & B) offered by private insurance companies. These plans must provide coverage that is at least as good as Original Medicare and often include deductibles, co-pays, and network options like HMOs and PPOs.

To enroll in a Part C plan, you need to be enrolled in both Parts A and B first, enroll during a valid election period, and live in the plan’s service area. Costs for Part C vary by carrier, location, and plan. Even with a low premium Part C plan, you still pay for Part B premium. Your Medicare coverage will come from the Advantage plan, not directly from the government. Enrolling in Part C is optional, and many people prefer Original Medicare with a Medigap plan and a separate Part D plan for drugs.

For more information, visit the Medicare Part C page.

Medicare Part D – Prescription Drug Coverage
Medicare Part D covers prescription drugs to provide insurance for outpatient prescription medications. You can enroll in a stand-alone Part D plan to complement your Original Medicare or Medigap plan, or choose a Medicare Advantage plan that includes Part D coverage.

Part D plans have a monthly premium and co-pays, which vary based on the drug’s tier. Higher-income individuals pay more for Part D based on their modified adjusted gross income reported to the IRS. To find the right plan, use Medicare’s prescription drug finder tool or consult an agent to analyze your specific medication needs.

Enrolling in a Part D plan is essential to avoid penalties for not having creditable prescription drug coverage and to help minimize your out-of-pocket costs for medications.

For more information, visit the Medicare Part D page

WHAT MEDICARE DOESN'T COVER?

Long-term care

Hearing aids

Routine dental care

Routine vision care

Medical care outside of the U.S.

Dentures

Plastic and/or cosmetic surgery

Massage therapy

CHOOSE A MEDIGAP OR ADVANTAGE PLAN

Original Medicare has many gaps in coverage, so most people choose to supplement it with private insurance plans. There are two main options to consider:

Medicare Supplements (Medigap):

These plans work alongside Original Medicare Parts A & B to cover the “gaps” in coverage.
Pros: Comprehensive coverage (Plans G & N), no networks.
Cons: Higher cost, separate drug plan required.

Medicare Advantage (Part C):

These plans replace Original Medicare as your primary insurance, offering co-pays and coinsurance for various services.
Pros: Low monthly premiums, includes drug plans, additional benefits like dental and gym memberships.
Cons: Network restrictions, potentially high co-pays when sick.

For a detailed comparison, visit our page on Supplement vs. Advantage to understand their differences and determine which type suits you best.

Select and Enroll in Your Plan

Once you decide between Medicare Advantage and Medicare Supplement, it's time to choose the right plan. Plan availability and options vary by zip code and state. We are licensed in state of California and can guide you through your options to find the right fit for you.

There is no universally “best plan,” but there is a right plan for your unique situation. It’s essential to compare available options in your area, especially if you are new to Medicare.

Using our advanced Medicare software quoting system, we can input your information to generate a list of available plans in your area. We’ll help you narrow down this list based on factors like your doctors, medications, and travel habits, and provide a recommendation based on our experience with these companies.

Once you’ve chosen the right plan for you, we’ll assist you in completing the enrollment process.

Prescription Drug Coverage
Avoid penalties from Medicare by ensuring you have credible prescription drug coverage.

For Medicare Advantage plans: Typically, these plans include prescription drug coverage. It's rare that we would recommend a plan without this feature.

For Medicare Supplement plans: These plans do not offer prescription drug coverage. You’ll need a separate policy for this. We will use your list of prescriptions to identify a plan that minimize your copays and out-of-pocket expenses for the year.

Refer to the Medicare Part D page for more details.

Additional Coverage Options
You're nearly finished! Now, consider if you need any additional coverage. Popular choices among our clients include:

Dental or Vision Insurance: While this is often included in employer plans, it is not part of Medicare. A stand-alone dental or Vision plan will cover routine and comprehensive dental and vision care. Ideal for those with Medicare Supplement plans.

Final Step – Receiving Your Cards
After enrollment, expect your insurance cards and policy documents to arrive by mail within 10-14 days. Coverage starts on your policy's effective date, so even if your Medicare begins in a few months, you can arrange everything in advance.

Talk to an Expert 626-640-5595

PARTS OF MEDICARE