Understanding Medicare

Signing up for Medicare and making choices about which option to choose can seem overwhelming.  While there are a few decisions to make, let’s break it down here into small simple steps.

Do I qualify for Medicare?

Most Americans do qualify for Medicare coverage.  However, some will pay different premiums based on the number of quarters they paid into the Medicare system (i.e. through Medicare taxes).

When does Medicare start?

Most individuals qualify for Medicare at age 65.  However, it is important to do your homework early because you want to be covered when any other insurance ends.  Experts recommend starting your research at age 64 and a half – six months before your 65th birthday.

How do I learn about Medicare?

First, you’ll want to educate yourself on how Medicare works.  Here are the basics, but ask us if you need additional resources.

Medicare itself is comprised of two parts:

  • Part A – Hospitalization: this includes inpatient care at a hospital, hospice care, home health care, nursing home care (but not including any custodial or long-term care expenses).
    • Part A is typically free of charge, except in the case where you did not pay into the Medicare system for a period of time during your working years.
  • Part B – Medicare Insurance: this includes services or supplies that are needed to diagnose or treat a medical condition and preventative services.  Examples include ambulance services, inpatient and outpatient mental health, and durable medical equipment.
    • Part B can cost as low as $144.60 per month up to $491.60 per month, depending on income and tax filing status.
  • Part C – Medicare Advantage (optional alternative)

If you choose, you can stop right here and use only Plan A and Plan B for your health insurance needs.  However, most individuals proceed to sign up for a Medicare Supplement policy, Prescription Drug policy, or they choose the route of a Medicare Advantage plan.

Should I get a Medicare Supplement policy?

Medicare Supplement policies are just that – a policy offered by private health insurance companies to supplement expenses that are not covered by Medicare Part A or Part B.  These policies are often referred to as “Medigap” policies: they fill in the gaps that A and B don’t cover for the patient, including co-payments, co-insurance, and deductibles.

A few things to know about a Medicare Supplement policy:

  • You are only eligible for a policy if you have Medicare Part A and Part B. You must show proof of this coverage when you apply for a supplement policy.
  • Supplement plans are required to be standardized – they must offer the same basic benefits, but the premiums differ based on the insurance company that offers it.
  • You pay a monthly premium for the policy, in addition to the premium for Medicare Part B.
  • Medicare Supplement policies only cover one person, there is no option for family coverage.
  • Policies range from option “A” to option “N,” depending on the amount of coverage preferred. Option G is the plan most individuals choose.

Do I need a Prescription Drug plan (Part D)?

Individuals eligible for Medicare are also offered the optional benefit of a prescription drug coverage.  This is typically most useful for people that require expensive prescriptions.

If you decide not to get a prescription drug plan when you are first eligible for Medicare, you will likely pay a penalty when you finally sign up for one.  This penalty could apply as long as you have Medicare prescription drug coverage.

When applying for Plan D, you’ll need to give information about all the prescriptions you currently take and a plan will be offered based on your specific medications.

Is there an alternative to Medicare, Medicare Supplemental plan, and a Prescription Drug plan?

Medicare Advantage is an “all in one” alternative to Medicare Part A and B and a supplemental policy.  It is offered by private insurance companies that have been approved by Medicare.  Medicare Advantage plans can have different out-of-pocket costs, and they have different rules for services compared to Original Medicare Part A and Part B (and these rules can change each year).  Most Medicare Advantage plans include a prescription drug plan.

Where do I get more information about Medicare?

This article only aims to provide the basics of how Medicare works: it not an exhaustive resource.  We cannot stress it enough: understanding Medicare is important!  Please reach out to an expert to see how Medicare might apply specifically for your personal situation.

  • Medicare.gov is a website that offers the basics of how Medicare works.
  • If you prefer to meet with someone, here are several resources in the Asheville area:
  • Raymond James also has an agreement with HealthPlanOne, an organization that educates people about Medicare polices and offers competitive quotes. Let us know if you would like to contact them.

-Jennifer Adams

Any opinions are those of Jennifer Adams and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notices.