To effectively guide your clients through the maze of Medicare, a deep understanding of its intricacies is essential. You can’t truly help someone without first understanding their unique needs and circumstances. And while reaching the age of 65 might signify Medicare eligibility, it doesn’t mean it’s the right choice for everyone.
The “Medicare and You” handbook is an indispensable resource and, along with AHIP, should be a mainstay in your professional arsenal. Always have it on hand during appointments as you’ll often refer to it.
Understanding Medicare
Medicare is the government’s health insurance plan for individuals 65 and older, those on disability for 24 months or longer, individuals with ESRD, and those diagnosed with ALS (Lou Gehrig’s disease). It comprises two primary segments: Part A and Part B.
- Part A: This covers hospital-related expenses, including in-patient hospital stays, skilled nursing care, and hospice.
- Part B: This is for outpatient services, such as doctor’s visits, tests, therapies, and medical equipment.
Part A usually doesn’t cost anything if Medicare taxes were paid during employment. However, Part B comes with a premium, which might increase for high-income earners. Delaying Part B registration can result in penalties.
Enrollment in Medicare
Although many opt for Medicare at 65, a growing number continue to work beyond this age. Their eligibility for Medicare doesn’t depend on their retirement age for social security.
- Enrollment Timelines:
- Start of the month they turn 65.
- After 24 months of disability.
- On diagnosis of ESRD, after 4 months from the start of dialysis.
- On diagnosis of ALS, when their social security disability begins.
For those turning 65 and already receiving social security, Parts A & B registration happens automatically. Otherwise, you must actively apply through Social Security during the 3 months before or after your 65th birthday.
Remember: Any delay can impact coverage. Understanding the Initial Enrollment Period is critical, especially for clients planning to retire around their 65th birthday.
Initial Enrollment Period
This period is vital for clients turning 65 who aren’t yet receiving social security. Here’s a brief breakdown:
- 3 months before turning 65: Part B begins on the first of their birth month.
- During the birth month: Part B starts the following month.
- 1 month after the birth month: A one-month delay in Part B’s start.
- 2 or 3 months after: A two-month delay in Part B’s start.
Part B Premium and IRMAA
The majority pay the standard premium for Part B. Some may be eligible for state-covered premiums based on income. However, high-income earners might have to pay more due to IRMAA, based on their tax returns from two years prior.
Changes in life circumstances can affect this premium. A decrease might be possible due to events like marriage, divorce, work stoppage, or loss of pension, among others. The SSA-44 form from the Social Security website can be used to appeal based on these circumstances.
Medicare and Employment at 65
For those still working at 65 with employer health insurance, signing up for Part A or B might not be necessary. However, several factors need consideration:
- Employment Status: If retired with insurance, Part B is essential to avoid penalties.
- Employer Size: For companies with fewer than 20 employees, Medicare becomes the primary insurer.
However, having an HSA complicates matters. You can’t contribute to an HSA and have Medicare simultaneously. Thus, if still working and contributing to an HSA, avoid signing up for Medicare.
Final Word: The world of Medicare can be complex, but armed with knowledge and the right resources, you can ensure your clients are well-served. Always stay updated, and don’t hesitate to consult the “Medicare and You” handbook when in doubt.