Medicare 101

What is Medicare?

  • Medicare is health insurance for individuals age 65 and over
  • Medicare is also available to individuals under the age of 65 in the 25th month of receiving Social Security Disability Benefits

When are you eligible for Medicare?

  • Individuals are eligible on the first of the month that they turn age 65
  • Turn 65 on June 24? Your are eligible June 1
  • Turn 65 June 1? You are eligible May 1
  • Eligible due to disability? Your eligibility begins the first of the month of the 25th month that you are receiving disability benefits.

Signing Up – Already Receiving Social Security Benefits

  • Already receiving Social Security Retirement Benefits?
  • You will be automatically enrolled in Medicare Part A and Medicare Part B
  • Your Medicare Part B Premium will be automatically deducted from your Social Security Retirement Benefits
  • Your Medicare benefits will become effective on the first of the month that you turn 65.

Signing Up – Not Receiving Social Security Benefits

  • You are turning 65 and have not signed up for Social Security. When can you sign up?
  • Sign up period: 7 months
  • 3 months before your 65th birthday month
  • The month of your 65th birthday
  • Three months after your 65th birthday month
When you sign up for Medicare When your Medicare will begin
Automatically enrolled/signed up before your 65th birthday month First day of your birth month.
Automatically enrolled/signed up before 65th birthday month BUT your birthday falls on the 1st Your coverage will start on the 1st day of month prior to your birthday
During the 1st month you turn 65 Medicare will start 1 month after you sign up
One month after you turn 65 Medicare will start 2 months after you sign up
2 months after you turn 65 Medicare will start 3 months after you sign up
3 months after you turn 65 Medicare will start 3 months after you sign up
After that time, you can usually only apply during the General Election Period (1/1-3/31) Medicare will start July 1st
How to Sign Up

Sign Up Online
ssa.gov/benefits/medicare

Sign Up Over The Phone
800-772-1213

Sign Up at Your Local
Social Security Office

Social Security Office – Buncombe County
Phone Service Only
800 Centre Park Drive, Asheville, NC 28805
(866) 572-8361
Monday 9 AM – 3 PM
Tuesday 9 AM – 3 PM
Wednesday 9 AM – 12 PM
Thursday 9 AM – 3 PM
Friday 9 AM – 3 PM
Social Security Office – Henderson County
Phone Service Only
205 S Grove St, Hendersonville, NC 28792
(866) 964-5053
Monday 9 AM – 3 PM
Tuesday 9 AM – 3 PM
Wednesday 9 AM – 12 PM
Thursday 9 AM – 3 PM
Friday 9 AM – 3 PM

Medicare Parts A and B

Medicare Part A Hospital Insurance Premiums

  • No Cost! (If you have worked for at least 10 years for which you paid Medicare taxes)
  • If you have worked less than 10 years, you will share in the cost of your Medicare Part A premium.
  • If you are not eligible for a no cost or reduced cost Part A premium, you will have to pay the entire amount. The full cost of the Medicare Part A Premium for 2022 is $ 499.00

A non-working spouse can qualify for no cost Part A at age 65 if their spouse has worked 10 years and is at least age 62.

Medicare Part B Medical Insurance Premiums

  • Monthly Part B premiums are determined by the Social Security Administration and are based on your household taxable income from two years prior (2022 premiums are based on 2020 income)
  • If your income has been reduced due to retirement, working less, changing careers or any other reason, you can appeal this determination. Click here for the form and instructions
Yearly Income and Filing Status for 2020 Part B Premium
for 2022
File individual tax return File joint tax return File married & separate tax return
$91,000 or less $182,000 or less $91,000 or less

$170.10

$91,000 to $114,000 $182,000 to $228,000 Not applicable

$238.10

$114,000 to $142,000 $228,000 to $284,000 Not applicable

$340.20

$142,000 to $170,000 $284,000 to $340,000 Not applicable

$442.30

$170,000 to $500,000 $340,000 to $750,000 $91,000 to $409,000

$544.30

Greater than $500,000 Greater than $750,000 Greater than $409,000

$578.30

Medicare Benefits

Medicare Part A Hospital Insurance Benefits

  • Inpatient Hospital Care
  • Skilled Nursing Facility Care
  • Hospice Care
  • Some Home Health Care

Part A Benefits do not cover all costs. You will pay:

In Patient Hospital

  • $1556 deductible for each benefit period
  • $389 per day for days 61 – 90 of a hospital stay
  • $778 per day after day 90 subject to a 60-day lifetime limit
  • Beyond the lifetime limit: you are responsible for all costs

Skilled Nursing Facility

  • Day 1 – 20: $0
  • Day 21 – 100: $194.50 per day
  • Beyond Day 100: 100% of all costs

Medicare Part B Medical Insurance Benefits

  • Physician Services
  • Outpatient Hospital Services
  • Ambulatory Surgical Centers
  • Comprehensive Outpatient Rehabilitation Centers
  • Preventive Care
  • Ambulance
  • Durable Medical Equipment
  • Limited Outpatient Prescription Drugs

Part B Benefits do not cover all costs. You will pay:

  • $233 Annual Deductible
  • Typically, 20% of the Medicare Approved Amount for Part B Covered Services

Medicare Supplemental Coverage

• There is no out of pocket limit for Medicare Part A and Medicare Part B.
• Medicare Part A and Medicare Part B do not provide prescription drug coverage
• Medicare Supplemental coverage can help you limit your out of pocket medical and help you pay for prescriptions

Path 1 Path 2
Original Medicare
Medicare Supplement and a Part D Prescription Drug Plan
Medicare Advantage

Medicare Supplement Plans

  • Covers your out of pocket costs for Medicare Part A and Medicare Part B.
  • To enroll in a Medicare Supplement plan, you must be enrolled in Medicare Part A and Medicare Part B
  • You will have guaranteed insurability if you enroll within six months of enrolling in Medicare Part B (no medical questions)
  • You must answer medical questions if you change insurance carriers or if you apply outside the six-month window
  • No network. Freedom to choose providers and hospitals.
  • A Medicare Supplement Plan is accepted by any provider that accepts Medicare
  • If the provider does not accept Medicare, you can file a claim with Medicare and the Medicare Supplement insurance plan

Medicare Part D Prescription Drug Plans

  • Medicare Part D is subsidized and tightly regulated by CMS
  • A Medicare Part D Prescription Drug Plan is a private insurance plan
  • Plans compete with premiums, formulary and copays
  • Individuals and couples with higher incomes will pay a higher Part D plan premium
  • Individual: $91,000 and above
  • Couple: $182,000 and above
  • Additional premium ranges from 35% to 85% of the cost of the plan
  • Final cost is determined by CMS
  • If you enroll in a Medicare Supplement Plan, you will need a Medicare Part D Prescription Drug Plan to cover the costs of your outpatient prescription drugs
  • If you do not enroll in a Part D Prescription Drug Plan, you will be accessed a penalty when you do enroll in a plan for each month you were eligible but were not enrolled
  • The penalty is 1% per month of the Part D National Base Beneficiary Premium. The 2021 Part D National Base Beneficiary Premium is $33.37.
  • You can shop for and enroll in a Medicare Part D Prescription Drug Plan through the Medicare Plan Finder at medicare.gov
  • Enter your zip code, prescriptions and pharmacy
  • Website will display all available plans in your zip code and your total out of pocket costs for prescriptions and your premium
  • Click enroll next to the plan you select
  • After you determine your plan, you can also enroll through these pathways
  • Call 1-800 MEDICARE (800-633-4227)
  • Call the insurance company

Annual Open Enrollment

  • You can change plans every year
  • The Annual Notice of Coverage for your current plan will arrive by September 30
  • You can start shopping for coverage on October 1
  • Open Enrollment is October 15 – December 7

Medicare Advantage Plans

Replaces Medicare Part A and Medicare Part B with traditional medical plan benefits from a private insurance company.

A Medicare Advantage Plan has:

  • Copays
  • Coinsurance
  • Out of pocket maximums

With a Medicare Advantage Plan

  • You still pay your Medicare Part B Premium
  • You can enroll in a plan with or without prescription coverage
  • You must use a provider that is in the plan network
  • Most insurance companies offer a HMO and PPO plan design
  • Some plans cover out of network benefits
  • If you enroll in a plan without prescription coverage (Medical Only Plan), you cannot enroll in a Medicare Part D Plan
  • If you enroll in a Medical Only Plan, you will be subject to the Part D penalty when you enroll in a Medicare Part D Prescription Plan or a Medicare Advantage Plan that includes prescription coverage. The penalty is 1% per month of the Part D National Base Beneficiary Premium. The 2021 Part D National Base Beneficiary Premium is $33.37.
  • If you enroll in a Medical Only Plan and then enroll in a Medicare Part D Prescription plan, you will be dis-enrolled from the Medical Only Plan.

How do I enroll? A local insurance agent can:

  • Help you decide if a Medicare Advantage Plan is right for you
  • Check your providers to make sure they are in the plan network
  • Check your prescriptions
  • Explain benefits and out of pocket costs

Annual Open Enrollment

  • You can change plans every year
  • The Annual Notice of Coverage for your current plan will arrive by September 30
  • You can start shopping for coverage on October 1
  • Open Enrollment is October 15 – December 7
  • Your local agent can help you with your Annual Open Enrollment decisions

Income Related Premium Adjustments for Medicare Part D and Medicare Advantage with Part D

  • Like Medicare Part B, monthly plan premiums for Medicare Part D and Medicare Advantage with Part D (MAPD) are determined by the Social Security Administration and are based on your household taxable income from two years prior (2022 premiums are based on 2020 income)
  • If your income has been reduced due to retirement or working less, you can appeal this determination. Click here for the form and instructions. The adjustment, if approved, will affect your Part B and Part D / MAPD premiums
Yearly Income and Filing Status for 2020 Part D and Medicare Advantage with Part D Income Related Monthly Adjusted Amount 2022
File individual tax return File joint tax return File married & separate tax return
$91,000 or less $182,000 or less $91,000 or less

$0

$91,000 to $114,000 $182,000 to $228,000 Not applicable

$12.40

$114,000 to $142,000 $228,000 to $284,000 Not applicable

$32.10

$142,000 to $170,000 $284,000 to $340,000 Not applicable

$51.70

$170,000 to $500,000 $340,000 to $750,000 $91,000 to $409,000

$71.30

Greater than $500,000 Greater than $750,000 Greater than $409,000

$77.90

Medicare and Employer Sponsored Health Insurance

I am turning 65.
My employer or my spouse’s employer has fewer than 20 total employees.
I am enrolled in my employer’s group plan or my spouse’s employer plan.
What do I need to do?

  1. You must enroll in Medicare Part A and Medicare Part B when you turn age 65.
  2. Group health plans for employers with less than 20 total employees are not a valid waiver for Medicare Part B.
  3. You can stay on the group health plan but it will be secondary to Medicare (Medicare pays first, the group health plan pays second).

I am turning 65.
My employer or my spouse’s employer has 20 or more total employees.
I am enrolled in my employer’s group plan or my spouse’s employer plan.
What do I need to do?

  1. Consider enrolling in Medicare Part A when eligible
  2. If your employer offers an HSA eligible plan, enrollment in Part A will make you ineligible to contribute to your Health Savings Account. If contributions to your Health Savings Account are an important component of your financial planning and / or your employer contributes a matching or annual amount to your HSA, you may consider delaying enrollment in Medicare Part A so you can continue making HSA contributions.
  3. Delay enrollment in Medicare Part B until you leave you employer plan or your spouse’s employer plan.
  4. You can enroll in Medicare Part B at any time without penalty while you are covered by the group plan
  5. The enrollment date in Part B may affect your ability to enroll in a Medicare Supplement plan on a guaranteed issue basis. You have six months after enrolling in Part B Medicare to enroll in a Medicare Supplement plan without answering medical questions.
  6. You have 8 months to enroll in Medicare Part B without penalty after you leave the employer plan as an ACTIVE employee or the spouse of an active employee.
  7. COBRA coverage is NOT considered a valid waiver for Medicare Part B. You MUST enroll in Medicare Part B within 8 months of leaving your employer plan as an active employee. This also applies if you were on your spouse’s group health plan.
  8. If you do not enroll in Medicare Part B within 8 months of leaving employer coverage, you will have to wait to enroll in Medicare Part B during the next Medicare Part B enrollment period (January 1 to March 31 with an effective date of July 1).
  9. The enrollment date in Medicare Part B after you leave the employer health plan will affect your ability to enroll in a Medicare Supplement plan on a guaranteed issue basis. You have six months after enrolling in Part B Medicare to enroll in a Medicare Supplement plan without answering medical questions.

I am turning 65
My employer or my spouse’s employer has 20 or more total employees.
I am enrolled in my employer’s group plan or my spouse’s employer plan.
I think I could get a better deal with Medicare.
What should I do?

Analyze Cost and Benefits!

What benefit package can deliver the most benefits at the lowest cost?

Original Medicare

Your Employer Plan Medicare / Medicare Supplement / Part D
  • Pay period deduction – what is the total monthly cost?
  • Pretax Benefit. The cost of your health insurance is deducted on a pretax basis.
  • Prescription coverage is included and goes to the annual out of pocket maximum of your health plan. What are you paying each month for your prescriptions?
  • What is the employer’s health plan deductible?
  • Are there plan copays? Do you find these helpful?
  • Your employer plan has an annual out of pocket maximum for medical and prescription costs. This is not true for a Medicare Part D plan; there is no cap on annual prescription out of pocket costs.
  • Determine the cost of your Medicare Part B Premium, including any applicable income related monthly adjustment amount
  • Add the cost of the Medicare Supplement Plan Premium
  • Add the cost of a Medicare Part D Prescription plan.
  • Medicare Part B, Medicare Supplement and Medicare Part D premiums are paid with post tax dollars.
  • If you are self-employed, these premiums can be deducted as self-employed health insurance (consult your tax professional).
  • Plan benefits. Medicare + Medicare Supplement + Medicare Part D may offer a richer benefit for a lower cost.
  • Does a Medicare Part D plan lower your monthly prescription cost compared to your employer plan?

Medicare Advantage

Employer Plan Medicare Advantage
  • Pay period deduction – what is the total monthly cost?
  • Pretax Benefit. The cost of your health insurance is deducted on a pretax basis.
  • Prescription coverage is included and goes to the annual out of pocket maximum of your health plan. What are you paying each month for your prescriptions?
  • What is the employer’s health plan deductible?
  • Are there plan copays? Do you find these helpful?
  • Your employer plan has an annual out of pocket maximum for medical and prescription costs. This is not true for a Medicare Advantage plan; there is no cap on annual prescription out of pocket costs.
  • Determine the cost of your Medicare Part B Premium, including any applicable income related monthly adjustment amount
  • Add the cost of the Medicare Advantage Plan Premium
  • Medicare Part B and the Medicare Advantage premiums paid with post tax dollars.
  • If you are self-employed, these premiums can be deducted as self-employed health insurance (consult your tax professional).
  • Medicare Advantage plans have copays, per day costs and coinsurance.
  • Medical Out of Pocket Maximum: How does it compare to the employer plan?
  • Does a Medicare Advantage plan lower your monthly prescription cost compared to your employer plan?
  • Are your doctors in the Plan Network?

Helpful Documents

Medicare and You This is the official U.S. government Medicare handbook. Choosing a Medigap Policy A Guide to Health Insurance for People with Medicare. Published by the Centers for Medicaid and Medicare services and the National Association of Insurance Commissioners.

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