Frequently Asked Questions - All FAQs

Health insurance provided by the Federal Government to pay the costs of medical treatment for Americans age 65+ and those with certain disabilities who are younger than age 65.

• PART A is intended to pay for medically necessary hospital charges, skilled nursing care and hospice, generally those treatments administered in an inpatient setting.  It is one half or original Medicare.

• PART B is generally intended to pay for medically necessary outpatient doctor fees, office visits, preventive care, laboratory testing, durable medical equipment, some drugs administered in an office or hospital setting on an outpatient basis plus some mental health, home health and ambulance services.  It is the other half of original Medicare.

• PART C refers to Medicare Advantage (MA) plans (as distinct from Medicare Supplement plans). These plans replace original Medicare and are mandated to provide the same or better protection as Medicare Parts A & B. Medicare Advantage plans are all operated as managed care organizations, either PPOs or HMOs. Under an HMO, the subscriber must seek treatment from the insurance company’s list (network) of providers in order to have their care paid for. Under a PPO, the subscriber is allowed somewhat more freedom to seek treatment from providers outside the network, but will be reimbursed at a lower level.  This is optional insurance coverage sold by private companies; it is not required by nor is it provided by the government. Prospective subscribers have an AEP (Annual Enrollment Period) each fall during which they may enroll in a Medicare Advantage plan or switch from one MA plan to another.

• PART D refers to prescription drug plans (PDP). As with Part C (MA) plans and Medicare Supplement plans, this is optional coverage purchased from a private insurance company. If one does not purchase a PDP when first eligible, a small but growing penalty will be assessed each month for life starting when that person eventually decides to buy. For that reason, I generally advise clients to purchase a PDP when first eligible, even if they are not taking any prescription drugs at that time.  Elsewhere on this site you will find my steps for easily selecting the lowest cost PDP available in your local market, based on your current prescription drug usage.

• My goal is simplification of an otherwise complex government program. The Medicare Supplement plans are simple to explain and understand. They provide the best available coverage, complete freedom of choice and operate exactly the same everywhere in the U.S. and possessions.
• Medicare Advantage (MA) plans all have restrictive HMO and PPO networks of medical providers, which makes them unsuitable for those whose favorite doctors and hospitals do not belong to those networks as well as those whose providers change networks or resign from a particular network.
• MA HMO plans pay out-of-network expenses only for emergency treatment. This may lead to disputes in which the burden of proof on the insured person to show that a genuine emergency existed. Additionally, permission must be obtained in advance before a subscriber can seek covered treatment from a network specialist.
• MA plans may have low or zero cost premiums and may include some type of limited dental and vision coverage, but often impose very high out-of-pocket charges in the event that expensive medical treatment is needed.
• MA plans generally rely on government payments to the insurance company to keep the premium cost low and the agent’s commission high. If or when the government decides to cut back on this financial support, participants in the plans will likely be expected to increase their premium payments or find replacement coverage.

YES! Part A only helps pay for inpatient treatment and Part B only helps pay for outpatient treatment. Unless you can predict the exact type of medical treatment you will need in the future, both Parts A & B are necessary for complete protection.

• Original Medicare Part A is free of charge for most Americans when they reach age 65, so long as they or a spouse has had 10 years (40 quarters) of taxable earnings.
• Original Medicare Part B monthly premium (in 2019) is $135.50 for most but will be higher if IRMAA (the success penalty) is triggered.
• Medicare Supplement plans vary widely in cost based on company, state, and sometimes ZIP code, sex and tobacco use. The plans I recommend most enthusiastically are likely to cost less than $100 per month; the most comprehensive protection will often cost between $150 - $250 per month.
•  Prescription Drug Plans (PDP) are constantly in flux. The monthly premium can be as low as $18 if no drugs or only generic drugs are purchased. This is why I recommend taking a short time every fall to execute my short eight-step process to find the least expensive PDP available to you.
• SUMMARY: If you enjoy an average income and follow my advice to buy a high deductible Medicare Supplement and a PDP, your monthly premium will probably be slightly in excess of $200. If you purchase the most comprehensive Supplement, expect your monthly cost to be between $300 and $350 in many areas of the country. As the saying goes, your results may vary.

• Sometimes referred to as the “success penalty”, it is an additional dollar amount added to the monthly premium as a result of reporting higher than average MAGI (modified adjusted gross income) on tax returns two years prior.
• IRMAA can be added to the premium of both Medicare Part B and Prescription Drug Plans (PDP).
• If circumstances cause a decrease in reportable income, it would be advisable to contact www.SSA.gov/medicare to report this change in an effort to have the IRMAA reduced or eliminated as soon as possible.
• Charts showing the current year’s IRMAA penalty are available elsewhere on this site as well as in my book, “Medicare for the Lazy Man 20XX”

• Very little you do here is irrevocable, assuming you do not incur the lifetime penalties for late enrollment in Medicare Part B or a Prescription Drug Plan.
• An Annual Enrollment Period (AEP) exists from October 15th to December 7th for those who wish to acquire Medicare Advantage and Prescription Drug plans, or to switch away from the plans they already have.
• Medicare Supplement Plans are generally allowed to request evidence of insurability (i.e. proof of good health) for applicants who are not in a “guaranteed issue” period. This is not always the case but the exceptions can be complex rare. Therefore, I recommend that Medicare Supplement shoppers select their plan carefully because they are likely to have it for the balance of their lives.
• Special Enrollment Periods (SEP) can arise during the course of a year other than during the Annual Enrollment Period (AEP) in the fall. An SEP will allow the insured to purchase a Medicare Supplement plan without answering the insurance company’s health questionnaire. Some events that may trigger an SEP are: losing employer group coverage through retirement, voluntary termination or plan termination, losing eligibility for Medicaid benefits, or are in one of a handful of states that offer a “birthday rule” type of opportunity.
• SEPs or guaranteed issue opportunities can be triggered when one has a Medicare Advantage plan and certain things happen: within the first year you are dissatisfied and decide to change to a Medicare Supplement, you move out of the MA plan’s service area, suffer a reduction in MA benefits or have a substantial change in providers in the MA plan.
• It is always advisable to check with a local expert to confirm the best action for your situation, or go to www.ssa.gov/medicare, click on “search” and enter “special enrollment period” in the search field.

• When planning to enroll in Medicare at age 65, one has an initial enrollment period beginning three months before the birth month and extending three months after the birth month.
• If the actual date of birth is on the first (1st) of a month, these dates are shifted ahead one month.
• Planning to quit an employer group plan when older than 65? You will have an eight-month window in which to arrange for Medicare coverages, but speed is important. Avoid a lapse in coverage by applying for Medicare Part B and your Medicare Supplement to both begin the 1st of the month following your termination from the group plan.
• Both parts of Medicare must be in place before you can apply for a Medicare Supplement policy from an insurance company.
  With very few exceptions in some states, there is no annual open enrollment for Medicare Supplement plans.
• In more complicated situations, or if there is any question as to the best course of action, I always recommend the prospective enrollee seek advice from their company HR department, the Social Security Administration (www.SSA.gov) or experts in the plans available locally who can assist in determining the ideal timetable for Medicare and Supplement enrollment.