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Medicare Surprises: Three Medicare Surprises No One Told You

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Medicare surprises can catch you off-guard if you are not prepared for them. Most people do not study or think about Medicare until they begin to approach their 65th birthday. Because of that, in addition to the abundance of misinformation out there about Medicare, there are several Medicare surprises that most people discover as they approach their 65th birthday.

Medicare can be a welcome relief for many people who are turning 65, particularly if you have been paying the high premiums for your for own individual health insurance the last few years. But, here are three Medicare surprises that you may not know prior to researching and understanding Medicare.

  1. MEDICARE SURPRISE #1: IT’S NOT FREE.

    Sure, you have been paying for Medicare your whole working life in the form of payroll deductions. Surely, the Federal Government has been safely storing your money in a bank somewhere to be used to “give” you Medicare when you turn 65, right?Medicare has a premium

    Well, not exactly. Medicare Part A (hospital) is premium-free currently, as long as you have worked 10 years and paid into the “system”. However, there is a premium for Medicare Part B. Currently, the standard Medicare Part B premium is $148.50/month (for 2021), although the exact premium you will pay is determined in some part by your income. If you fall into a higher income category, you could be responsible for IRMAA. And, if you fall into a lower-income category, you may be eligible for assistance in paying for Part B premiums.

  2. MEDICARE SURPRISE #2: IT DOES NOT COVER EVERYTHING

    Medicare is certainly comprehensive coverage – in fact, over 75% of people who are on it are “very satisfied” with it according to a 2016 study by the Kaiser Family Foundation. That said, a number of those 75% have some sort of supplemental insurance or additional plan(s) to go with Medicare. Medicare, in and of itself, is not 100% full coverage.medicare surprises - how to get medicare coverage

    On the contrary, Medicare has deductibles and co-pays that are not covered by traditional Medicare. If you have “only” Medicare and no other types of supplemental or group coverage, you are responsible for a Part A  deductible ($1484/benefit period for 2021), Part B deductible ($203/year for 2021) and an uncapped 20% coinsurance. The “uncapped” is the key word in the previous sentence because it represents unlimited medical costs if you were to have hefty medical bills.

    This is also why such a large number of people (approximately 25%) purchase Medigap plans. Another quarter of the people, roughly speaking and based on 2019 figures, are enrolled in a Medicare Advantage plan. These number don’t include or account for another quarter of people who are dual-eligible for Medicare and Medicaid.

  3. MEDICARE SURPRISE #3: IT IS NOT A ONE-TIME DECISION

    This Medicare surprise catches you off-guard. Most people spend hours on their Medicare-related decisions leading up to their 65th birthday. Then, they think they are finished for the rest of their lives. You certainly can do it that way; however, it is not prudent financially to do so.

    Some types of plans change over time – Part D prescription plans, in particular, which can have dramatic costs and formulary changes annually. Others, like Medigap, never change coverage but can change premiums over time. If you use a “set it and forget it” methodology when it comes to Medicare, you will almost certainly be paying too much by the time you are 70 years old.

    The best course of action is to periodically review your plan choices – annually or bi-annually usually works best – to make sure that you have the best available deals for your specific needs (Is Plan G a better deal than Plan F?). A good independent broker should proactively contact you or stay in touch with you in order to help with this.

Medicare surprises are not out of the ordinary – instead, they are pretty commonplace, as most people do not think about Medicare until it is time for them to receive it. These are three common, unexpected surprises that people receive when they do reach the golden age of 65.

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65Medicare.org is a leading, independent Medicare insurance agency for people turning 65 and going on Medicare. If you have any questions about this information, you can contact us online or call us at 877.506.3378.

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Is Medicare Renewed Automatically Each Year?

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Medicare Parts A and B:

Once you are enrolled in Medicare Parts A and B, you never have to renew them.  You can “stop” Medicare Part B if you wish to do so (i.e. if you get a job that offers group insurance and want to disenroll from Medicare).  But if you do nothing, Medicare will always continue without a need for annual, or periodic, renewal.

Medicare Advantage and Part D:

These plans renew their contract with Medicare each year – Medicare must approve the plan design each year.  If it is approved by CMS (Medicare), and you want to keep the plan, you do not have to do anything.  But the plan contract with Medicare IS renewed annually.  You will receive a notice each year around late September/early October about the plan’s status for the following calendar year. This also contains information about how the plan is changing (premiums, coverage, etc) for the following year. See below for more information about what happens if/when your plan is not renewed for the following year. What are the differences in Medigap and Medicare Advantage

Medicare Supplement (Medigap) Plans:

Medigap plans renew each time the premium is paid.  If you pay monthly, they are renewed monthly. You do not have to do anything annually to renew them, and there is no annual open enrollment period for Medicare Supplement plans. They have the benefit of being “guaranteed renewable”.  It will continue indefinitely unless you don’t pay the premium. However, if your policy does lapse, you will generally have a grace period and/or a reinstatement period. It is very easy for this to occur if for instance, you are traveling for an extended period, you are moving to a new location, you are experiencing a long illness, or changing your autopay source. Your Medigap carrier cannot drop you from your plan or make changes to your plan (i.e. downgrade your benefits) because of any changes in health.

IMPORTANT: Just because Medigap plans have the benefit of renewing indefinitely, does NOT mean that you should put them on auto-pilot and never check pricing. In fact, the opposite is true. Rates go up on Medigap, considerably so with some companies, and it is always prudent to check pricing annually or bi-annually. You can request 2020 Medigap rates here.

What Happens If My Medicare Advantage Plan or Medicare Part D Plan Are Not Renewed?

If your Medicare Part C (Medicare Advantage) or Prescription Drug Plan (Part D) plans are not renewed (in other words, they are no longer approved/offered in your area), you will have a Special Election Period (SEP). During a SEP for a Medicare Advantage non-renewal, you can sign up for a Medicare Supplement plan or change your Medicare coverage to a new Medicare Advantage plan. If your Part D plan non-renews for the next year, you can choose a new Part D plan – if you don’t do so, you may be without drug coverage for the following year. Besides the SEP granted to people in a non-renewing plan, there are also different SEPs applied to different circumstances.  Listed below are a few SEP scenarios and their corresponding time frame:

  • You moved and your plan is not offered in your new service area – if you notify your plan prior to your move, you can switch the month before the month you move; it continues for 2 full months after you move. But, if you tell your plan after you have moved, you will be able to switch plans beginning the month you tell your plan, plus 2 more full months.
  • The Medicare contract for your plan is not renewed for the upcoming year – December 8 to the end of February.
  • Your plan leaves the Medicare program in mid-year – your SEP begins the month in which you are notified and continues for two more months.
  • Medicare terminates its contractual agreement with your plan – you have two months before and one full month following the end of the contract.

In addition to the above situations, there are life changing events that would allow for SEPs. Each qualifying life event has a different SEP.  For more information about SEPs, call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048, or go to www.Medicare.gov.

Even if you do not need to renew your Medicare coverage, it is prudent to review your coverage every year.  Your plan benefits may change. In addition, provider and pharmacy networks may be added or taken off your list.  Drug formularies may change too. This especially may have a big impact on the cost effectiveness of your plan along with cost sharing. These can all change from year-to-year and affect your out-of-pocket costs.  Comparing plans on an annual basis is an excellent idea to ensure that your coverage continues to be in alignment with your budget and your health needs.

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65Medicare.org is a leading, independent Medicare insurance contact us blueagency for people turning 65 and going on Medicare. We have worked with 10,000+ Medicare-eligible individuals over the last 10+ years, assisting with understanding and comparing the plans. You can get a list of Medigap quotes in your area. Or, if you have any questions about this information, you can contact us online or call us at 877.506.3378.

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Supplemental Insurance for Medicare

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There are several types of supplemental insurance that work with Medicare. Medicare is a government-sponsored health insurance program for those who are 65 years old or older, or those who are disabled or qualify because of end-stage renal disease (permanent kidney failure requiring continuous dialysis treatment or a kidney transplant) or Lou Gehrig’s disease (amyotrophic lateral sclerosis). The basic program is called Original Medicare and includes Part A (hospital insurance) and Part B (medical insurance).  However, Medicare only covers 80% of your hospital or medical costs.  There are a few options for you to consider when deciding whether you need more coverage or not.  It is all up to you.  Those options are listed below.

  • Keep Original Medicare (Parts A and B) and do not get additional supplemental insurance. The 20% of out-of-pocket costs that Original Medicare doesn’t pay for will be your responsibility.  You will pay your monthly Part B monthly premium.  Some people may “opt out” of Part B if they have group coverage through their employer (see below)
  • Stay with Original Medicare and enroll in a stand-alone Medicare Part D Prescription Drug Plan, since Original Medicare does not include prescription drug coverage. These plans are available from private, Medicare-approved insurance companies.
  • If you choose Medicare Part C, you can get your Medicare Part A and Part B benefits through a Medicare Advantage plan. Many Medicare Advantage plans also cover routine vision or dental care or other benefits. Hospice care is covered directly by Medicare Part A when you have a Medicare Advantage plan.  In this scenario, your Medicare Advantage plan acts as your insurance provider, not Original Medicare.  However, you would continue paying your monthly Medicare Part B premium, in addition to the premium your Medicare Advantage plan charges.
    • The types of Medicare Advantage plans available in your area (they vary according to which county you live in) may include Preferred Provider Organization (PPO) plans, Health Maintenance Organization (HMO) plans, Medical Savings Account plans (MSA) and others.
    • Most Medicare Advantage plans include prescription drug coverage; these are called Medicare Advantage Prescription Drug plans
    • Additional benefits, for example, vision and dental coverage are offered by most Medicare Advantage plans.
    • The out-of-pocket expenses may vary from plan to plan.

Please note that if you enroll in a Medicare Advantage Plan, you cannot also purchase a Medicare Supplement Plan (Medigap). 

  • Stay with Original Medicare and add a Medicare Supplement (Medigap) plan to help pay for Original Medicare’s out-of-pocket costs, which may include copayments, coinsurance and deductibles. Medicare supplement insurance companies can only sell you a standardized Medicare supplement policy. They are standardized because they must offer the same basic benefits, no matter which insurance company sells it. Administrative costs and the customer service they offer, are usually the only difference between Medicare supplement policies sold by different insurance companies.
    parts of medicare

Should I Enroll in Medicare Part B?

Should I Enroll in Medicare Part B If I Have Group Employer or Union Coverage?

  • If you or your spouse (or family member if disabled) are still working, you may have the choice of staying on your employer’s/union group health plan or not.  You will need to contact your employer or union benefits administrator to find out whether you must drop your present coverage and get Medicare Part B (medical insurance) or not.  This includes federal or state employment, coverage through SHOP (Health Insurance Marketplace Small Business Health Options Program), and those serving in the military on active duty.  Delaying your enrollment in Part B may be more beneficial.
  • You can sign up for Medicare Part A and/or Part B, during a Special Enrollment Period if you or your spouse are still working (or if you are disabled, a family member’s):
    • While you are still covered by a group health plan
    • During the 8-month period beginning the month following the termination of your employment or coverage, whichever occurs first
  • Please note that group/union coverage excludes the following:
    • COBRA
    • VA coverage
    • Retiree coverage
    • Individual health coverage

Should I Enroll in Medicare Part B If I Have a Plan Through the Health Insurance Marketplace?

  • If you have your coverage through an Individual Marketplace plan, it might be advantageous for you to enroll in Medicare during your Initial Enrollment Period (the 7-month period beginning 3 months before the month you turn 65, including the month you turn 65, and ending 3 months after the month you turn 65), to avoid paying a late enrollment penalty for Medicare coverage in the future.
  • If you continue getting help paying your Marketplace plan premium after you enroll in Medicare, you might be penalized by having to pay back that extra help when filing your faxes.  You can visit HealthCare.gov to find out more.

 Should I Enroll in Medicare Part B If I Have TRICARE?tricare

  •  If you are active duty military (including your family), you will have the health care program called, “TRICARE.”  Be aware that you must enroll in Medicare Part A and B during your Initial Enrollment Period, to keep this coverage. If you have Medicare Part A, you must also have Medicare Part B to remain eligible for TRICARE, including prescription drug coverage.
  • You do not need to sign up for Part B if you’re:
    • An active duty service member
    • An active duty family member
  • Enrolled in TRICARE Reserve Select, TRICARE Retired Reserve, TRICARE Young Adult, or the The US Family Health Plan.

 Should I Enroll in Medicare Part B If I Have a Health Savings Account?

Once your Medicare coverage starts, you will not be able to contribute to your HSA.  If you do contribute after that, you may be obligated to pay a tax penalty.  DO NOT APPLY FOR MEDICARE, SOCIAL SECURITY, OR RAILROAD RETIREMENT BOARD BENEFITS IF YOU WOULD LIKE TO CONTINUE CONTRIBUTING TO YOUR HSA!

Before you make any decision about which option to choose for your health insurance coverage, learn as much as you can about what is available to you.  An independent broker can help you to compare coverages, and get information on benefits, and estimated costs, to help you find a suitable plan that will meet your needs.

You can also call Medicare at 1-800-MEDICARE (1-800-633-4227).  TTY users call 1-877-486-2048

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Does Medicare Cover Preventive Care?

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Preventive care to avoid illness can be achieved in numerous ways, i.e. exercising, living a healthy lifestyle, not smoking, eating right and maintaining a healthy weight.  However, another important way of keeping illness at bay, is by having preventive screenings for diseases.  Medicare offers a multitude of screenings to help discover disease and health problems early.  It is in the early stages of a disease that treatment works best.  Some of these screening services include wellness exams, vaccinations, laboratory tests and screenings for cancer and other diseases (see below).  In addition, there are counseling programs to educate you on your health and programs for tracking your health.

HOW MUCH OF THE COST WILL BE COVERED BY MEDICARE?preventive care covered by Medicare

If you are enrolled in Medicare Part B, these preventive care services will be covered.  However, what you pay out of pocket for them varies depending on if you have Original Medicare or a Medigap plan or Medicare Advantage plan.  You will pay more if you see health care providers who do not accept assignment.  However, for some preventive screenings, you will have to pay a deductible, coinsurance or both.  Assignment is an agreement by your doctor, provider or supplier to be paid by Medicare, to accept the amount that Medicare deems reasonable for the service, and not to bill you for any additional amounts other than the Medicare deductible and coinsurance.

Once you enroll in Medicare Part B (Medical Insurance), you are entitled to a “Welcome to Medicare” preventive visit.  It is a one-time preventive care measure, which has to be performed within the first 12 months that you are enrolled.  Not only is it an excellent way to catch up on all your important screenings and vaccinations, but at the same time you can discuss with your doctor, your family history and how to stay in good health.

After you have had Medicare Part B longer than a year, you will be eligible for a yearly “Wellness” visit.  There is no cost to you if your doctor accepts assignment.

At this visit, you will be able to:prevent illness with Medicare-covered screenings

  • Review your family history, discuss your medical history,
  • Review and update your current providers and medications
  • Have your weight, height, blood pressure and other routine measurements taken
  • Test for any cognitive impairment
  • Receive a personalized assessment for your health
  • Risk factors and treatment options
  • A preventive care screening checklist for which tests you can have and when they should be performed

Please note that you do not need to have a “Welcome to Medicare” visit prior to getting your yearly “Wellness” visit.

Preventive care & screening services

As mentioned above, Medicare covers several screening and preventive care exams, some of which are outlined below:

  • Abdominal aortic aneurysm screening:

This is a preventive care ultrasound for people at risk. A referral from a doctor or other practitioner is required.  You are at risk if you have a family history of abdominal aortic aneurysms, or you are a male 65-75 and you have smoked at least 100 cigarettes in the past.  This is a one-time screening.

  • Bone mass measurement (bone density):

A bone density test determines if you have osteoporosis, which would cause your bones to become more fragile and more likely to break.  It is covered once every 24 months (more often if medically necessary).

  • Breast cancer screening (mammograms):

If you are age 40 or older, Medicare covers screening mammograms once every 12 months to check for breast cancer.  In addition, Medicare also covers a baseline mammogram for women 35-39. Note: If medically necessary, diagnostic mammograms are covered under Part B, more than once every 12 months.  However, you will have to pay 20% of the Medicare-approved amount including the Part B deductible.

  • Cardiovascular disease screenings:

Once every 5 years, Medicare covers the following preventive care screenings to detect conditions that may result in heart attacks or strokes – cholesterol, lipid, lipoprotein, and triglyceride levels.

  • Cervical and vaginal cancer screenings:

Pap tests and pelvic exams are covered by Medicare Part B, once every 24 months.  This also includes a clinical breast exam.  If you are at high risk, or you are of child-bearing age and had an abnormal pap test in the past 3 years, then Medicare covers these screenings once every 12 months.

  • Colorectal cancer screenings:

One or more of the following preventive care tests may be covered to detect precancerous growths or cancer early:

  • Multi-target stool DNA test (generally covered once every 3 years if you meet certain conditions)
  • Screening fecal occult blood test (covered once every 12 months if you are 50 or older)
  • Screening flexible sigmoidoscopy (generally covered once every 48 months if you are 50 or older or 120 months following a screening colonoscopy).
  • Screening colonoscopy (generally covered once every 10 years or high risk, every 24 months); or 48 months following a flexible sigmoidoscopy. There is no minimum age.  Note:  If a polyp or other tissue is removed during colonoscopy, you may have to pay 20% of the approved amount for the physician’s services, in addition to a copayment if in a hospital as an outpatient.
  • Screening barium enema (generally covered once every 48 months if you are 50 or older, or high risk every 24 months), if used instead of sigmoidoscopy or colonoscopy. As above, you may have to pay 20% of the approved amount for physician’s services and a copayment in an outpatient hospital setting
  • Prostate cancer screenings:

The PSA (Prostatic Specific Antigen) test and digital rectal exam are covered by Medicare once every 12 months for men over 50 years old (starting the day after your 50th birthday).  The PSA test is at no charge.  However, the digital rectal exam is covered up to 80%, and you pay 20% of the Medicare approved amount, plus Part B deductible.

Please contact Medicare for a complete list of the preventive screenings available to you.MyMedicare.gov

You can find personalized Medicare information online by registering at “MyMedicare.gov”.  There you will have access to your preventive care health information, 24/7, every day.  You will be able to monitor your preventive care services, and get a list of Medicare-covered tests and screenings that you are eligible for.  You can even print out an individualized “on-the-go” report for your next doctor’s appointment.  This report comprises the preventive services and other services available to you which detect and prevent illnesses from progression.

Another way of getting access to your health information is by utilizing Medicare’s “Blue Button.”  This feature enables you to download claim information for a period of 12-36 months for Parts A and B and 12 months of claim information for Part D.  This is a useful tool for gaining knowledge about your health care and help you make more informed decisions.

You can always call Medicare at 1-800-633-4227 and get information 24 hours/day including weekends.  TTY users call 1-88-486-2048.
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65Medicare.org is a leading, independent Medicare insurance contact us blueagency for people turning 65 and going on Medicare. We have worked with 10,000+ Medicare-eligible individuals over the last 10+ years, assisting with understanding and comparing the plans. You can get a list of Medigap quotes in your area. Or, if you have any questions about this information, you can contact us online or call us at 877.506.3378.

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Five Things You Must Know When You Are Turning 65

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Turning 65 is a whirlwind.

You may be retiring or thinking about retiring soon, and you’re probably getting hounded with emails and mail about Medicare and what you should do about it.

If you’re trying to figure it all out on your own… well… you don’t have to.

Our agents are ready to give you a hand at absolutely no cost to you whenever you’re ready.

But, if you’re just starting to get a feel for your new responsibilities, here are 5 things that all 65ers need to know.

5. Enroll in Medicare Part A and Part B.turning 65 paperwork

When you turn 65, Medicare is officially available to you. You’ve been paying into it for long enough, so why not reap its benefits?

Part A cover inpatient care, and it’s completely free. No monthly premium for you.

Part B covers outpatient care, and it’s monthly premium, as of 2017, is $134. Note: that cost is higher if you make more than $85,000 per year (or $170,000 per year as a household).

If you’re on group coverage, and you’re still working, you need to weigh your options. You can read more about that here: https://65medicare.org/should-you-keep-your-group-insurance-when-you-turn-65.

Here’s what your timeline looks like:

→ 3 months before you turn 65, your birthday month, and 3 months after you turn 65.

If you miss this 7-month window, you’re going to be hit with some late enrollment penalties.

Here’s how to sign up, straight from Medicare.gov:

You can choose to opt out of Medicare Part B if you want, but you should discuss it with your agent first.

4. Look into Medicare Part C (Medicare Advantage).Medicare Advantage vs. Medigap

Medicare Advantage is an alternative to Medicare and Medigap plans. It often has a very low monthly premium, but it also comes with its downsides.

The first problem is the limited network. There are a lot of doctors that don’t accept Medicare Advantage. It could leave you with either no doctors in your area, or a doctor that’s not your favorite.

Also, the premium may look like a good sticker price, but there’s still hefty deductibles and co-pays. We’ve seen those range anywhere from $3,000-$7,000.

Medicare Advantage can be a good option for those in large cities. Large cities often have more doctors to choose from.

If you’re in a smaller city, you may not have any doctors, meaning you’ll have to drive a distance to see a doctor.

It’s always best to weigh your options  (Read our Medicare Advantage vs. Medigap article), so don’t rule anything out until you check out your own situation and your own network of coverage.

3. Sign up for Medicare Part D.

Medicare Part D, also called a prescription drug plan, or PDP for short, helps a lot of people save money on drug costs.

The dilemma here is that many turning 65 aren’t on any prescriptions yet. Why then would you pay a monthly premium for drug coverage that you don’t need?Part D Plans

Great question, and here’s the answer: For every month you delay signing up for Part D, you receive a 1% penalty on the premium.

We realize that may sound a little confusing, so here’s an example.

If you had signed up for Part D when you turned 65, let’s say your monthly premium would’ve been $50.

For each month you delay signing up, your monthly premium goes up by $0.50. So, by the end of the year — 12 months later — your premium has gone up to $56. Now, you’re not paying that premium yet, but when you do sign up for Part D, that penalty will go into effect.

If you had signed up for Part D, your premium would’ve stayed at $50.

It’s often a choice that takes time to make. If you end up needing prescriptions and you don’t have a Part D plan in place… well, we all know how expensive prescriptions are. It’s a gamble — are you willing to take the risk? And the penalty?

2. Choose a Medigap plan.

Medicare does cover a good portion of your medical expenses, but you’re still left behind with a nice chunk of risk.

To put things simply, Medicare covers about 80% of your medical expenses. A Medigap plan picks up that other 20%. That’s a generalization, and it’s more complicated than that, but that’s the simple way of putting it.

To “fill in the gaps of Medicare,” many will buy a Medigap plan. This is also called a Medicare Supplement.

You can buy a policy of your choice up to 6 months after you enroll in Medicare Part B. After that — you guessed it — penalties.

One of our agents can help you choose a plan that fits your budget.

1. Consider long-term care insurance.

Long-term care insurance is a big decision to make, and it definitely shouldn’t be made in haste. However, as time goes on, your ability to even purchase it starts to decrease.

Long-term care is only available to  those that can pass the rigorous health questions. As we get older, that becomes less likely, and some carriers even cap off the age you can apply right around 65.

Also, the other you get, the more expensive it gets. After the age of 65 or so, long-term care insurance starts to become very pricey, often more than many are willing to pay.

Long-term care itself is extremely expensive — it can be around $100,000 a year in many cases — so if you’re interested in getting some insurance coverage, you ought to start thinking about it now.

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65Medicare.org is a leading, independent Medicare insurance contact us blueagency for people turning 65 and going on Medicare. We have worked with 10,000+ Medicare-eligible individuals over the last 10+ years, assisting with understanding and comparing the plans. You can get a list of Medigap quotes in your area. Or, if you have any questions about this information, you can contact us online or call us at 877.506.3378.

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