Original Medicare (Part A & B)

Generally, Medicare requires beneficiaries to be 65 years old to be eligible for Parts A & B. There are some circumstances when individuals on disability under the age of 65 can enroll. If you’ve received Social Security Disability Income (SSDI) for at least 24 months, you qualify for Original Medicare.

Once you meet the age, residency or disability/diagnostic requirements, you will automatically qualify for Medicare health coverage.

Income is NOT a factor in determining Medicare eligibility. You are entitled to coverage as long as you have met the basic eligibility requirements outlined above.

Your income WILL detemine how much you pay for your coverage. If you have an annual income over a specific limit, you will be responsible for additional premiums based on IRMAA (Income Related Monthly Adjustment Amount). This will affect the premiums paid for Part B (Medical) and Part D (prescription drug plans). With original Medicare Parts A and B, you can go to any doctor at any hospital in the country that works with medicare – there are no “network” coverage restrictions.

When you’re first getting started with Medicare there can be a lot to learn and consider and it might seem overwhelming let’s start at the beginning with the ABC’s and D of Medicare.

While Original Medicare Parts A & B may cover most medical expenses for some, there are certainly risks involved given the required co-payments once you reach your initial deductible.

Part C coverage come from private insurance companies that take on your risk from the gaps in Original Medicare. Also known as Medicare “Advantage” plans, these policies go beyond Original Medicare by offering additional benefits ranging from prescription drug coverage, dental, vision, hearing while some also offer gym memberships and over the counter (OTC) medications and supplies.

If you choose Medicare Part C, you can get a basic Medicare Advantage plan (MA) which would mean you are eligible for a sepearate Part D prescription drug plan OR you can include prescriotion drug coverage in what is known as a Medicare Advantage with Part D (MAPD) plan. In most cases, whether you select MA or MAPD, you’ll need to use doctors who are in the plan’s network.

Part C plans are required to at least match the coverage found in Original Medicare and will then become your primary source of health insurance. Since there are several Part C plan types, costs may vary widely. One benefit of Part C plans is that they are guaranteed issue when you become eligible – there are no health questions and you cannot be denied coverage for any reason. If you wait to enroll after your initial eligibility period, you will be subject to this is not the case.

Medicare Part A and Part B are both under what’s called Original Medicare and provide basic hospital and doctor coverage. If you want drug coverage too, then you can join a separate Medicare Part D plan. Medicare Part D coverage is provided by private companies that offer a range of coverage options. You’ll pay a monthly premium that depends on the plan option you choose. Remember to consider your plan options when you’re first eligible to avoid late enrollment penalties.

The Part D coverage gap (aka “donut hole”) officially closed in 2020 as a result of passage of the Inflation Reduction Act and changes will roll out slowly until fully implemented.

Medicare beneficiaries will see a Part D deductible up to $505 in 2023, followed by an Initial Coverage Period in which they will be responsible for 25% of costs up until they reach the threshold of $4,660 spent on prescription medications.

As illustrated by this chart, total out-of-pocket costs will need to reach $7,400 before a beneficiary reaches the Catastrophic Benefit Period.

Your Medicare Part D costs for prescription drugs may change throughout the year in phases depending on where you stand in meeting your plan’s deductible and coverage limitations. The four phases are:

1. Deductible (if applicable, may vary by plan)
2. Initial Coverage
3. Coverage Gap* (aka The Donut Hole)
4. Catastrophic Coverage*

* Catastrophic Coverage phase will be removed in 2024 and the Coverage Gap will be removed in 2025 due to the passage of the Inflation Reduction Act.

It is essential to be aware of your enrollment deadlines when you first become eligible for Medicare. Initial enrollment begins three months before you turn 65. Enrollment remains open during your birthday month and then closes at the end of the third month following your birthday. For example, if your birthday is in May, your initial enrollment period would begin in February and extend through August. If you fail to enroll for any of the plans during this window, you will be assessed a penalty on that plan.

Late Enrollment Penalties

Part A: If you fail to enroll during your enrollment window, Medicare will assess a 10% monthly premium penalty on top of your monthly premium for 2x the number of years you delayed enrollment.  If you delayed enrollment for 3 years, you will pay an additional 10% penalty on top of your premium for 6 years.

Part B: Similar to Part A, Medicare will assess a 10% penalty in additional to your monthly premium for every year you delay enrollment BUT this penalty will last for as long as you have Medicare Part B. Using the previous example, if you delay enrollment for 3 years, you will be assessed a 30% penalty on top of your monthly premium for as long as you are on Medicare Part B.

initial Although no part of Medicare is mandatory, there are consequences for delaying prescription drug coverage. If you defer enrollment without creditable drug coverage (meaning as good as Medicare part D), Medicare will assess a monthly penalty for as long as you have Medicare Part D overage. Medicare

WHAT LIES AHEAD:

• Happy Birthday! You just turned 64 – time to get ready!
• When you turn 64 ½, you will be swamped with phone calls, letters and postcards from national call centers trying to get your information so they can sign you up with one of their plans.
• BE ADVISED: Medicare does NOT make outbound calls. Medicare will ONLY initiate communication with beneficiaries through the mail. DON’T be tricked by official looking postcards or letters – carefully review the contents to ensure it is only “official federal government” communication.
• When in doubt – call your trusted Best Senior Health Plans representative at (248) 770-7553.  
• These call centers use fear tactics to make you think you are missing out on special coverage. They will then direct you to one of their health plans that may or not be in your best interest. If they do not identify themselves by name as your Best Senior Health Plans representative, hang up.
• You may see a flood of TV ads during either:
  • Medicare Annual Enrollment (October 15^th – December 7^th for those who have Medicare and are looking to make a change) or
  • Medicare Advantage Open Enrollment (January 1^st – March 31^st) for those who have Medicare Advantage and may want to try another MA/MAPD plan.
• Countless TV ads featuring professional athletes or popular Hollywood stars will try to get you to call one of their national call centers. These centers use fear tactics to make you think you are losing coverage or can find a better deal elsewhere. This is seldom the case. You may save premium but often at the expense of losing much needed coverage.
• The national call centers represent only a select few national carriers – and they may or may not be the best options for your specific area. It is always best to allow your trusted independent agent to review all of your options with you before making any changes.