When Eligible

The first day of the month that one is turning age 65 is the eligibility date. If one is awarded Social Security Disability, then Medicare Parts A and B usually become available upon two years of SSD no matter the age.

When to Apply and How

You may apply 3-months before your 65th birthday month (Eligibility date), birthday month, and 3-months after the month you turn 65.

If already receiving Social Security retirement benefits, you will be automatically enrolled in Medicare and sent an application packet.

Apply online at www.ssa.gov/medicareonly/ or go to www.socialsecurity.gov for more information on Medicare and other social security benefits. Another excellent site is www.medicare.gov which has almost everything one needs to know about Medicare.

It is recommended to apply to Medicare before considering any of the below Medicare Plans. In other words, You need to be enrolled in Medicare Part A and Part B before considering options of Part C or Part D.

If you are planning to continue working for your employer after obtaining 65 and receive employer-based healthcare coverage, you may wish to enroll in Medicare Part A only as there is no cost to you for that. After you lose "creditable" insurance from your past employer, then you need to enroll in Medicare Part B and pay the monthly Part B premium or pay a financial penalty. If you can get your health insurance through your spouse's employer, it may be cost-effective to go through them or at least until it no longer becomes less expensive than Medicare.

How to Apply if Retirement is After Attaining Age 65

If you previously chose to continue employment and received employer-based healthcare insurance benefits, you have several options. 1) Your employer may be willing to transfer the insurance premium dollars the company has been paying on your behalf as a monthly cash benefit (subject to taxes) provided you switch to Medicare-based healthcare insurance. 2) You plan to retire months or years after turning 65, and your employer-based healthcare insurance will disappear upon retirement. You plan to replace it with Medicare-based healthcare insurance.

First, you will need to complete the form "Proof Creditable Healthcare Insurance for SEP" that you may open at the bottom of this web page. Your employer will need to fill it out. It proves to Medicare that you did have creditable insurance coverage between now and your 65th birthday. Without this form, there is a financial penalty.

Second, you will need to complete the form "Enrollment Medicare Part B" that you may open at the bottom of this web page. You fill in the form. Then take the completed "Proof Creditable Healthcare Insurance for SEP" and "Enrollment Medicare Part B" forms to your Social Security Administrations' local office. Enrollment usually can not be by mail or the internet. You may make an appointment with the SSA office over the internet to avoid hours of waiting if walking into the office.

You will receive both forms back, stamped, received, and processed. Estate Financial Services will need a copy of both these forms to open up a SEP (Special Enrollment Period) that allows enrollment into a Medicare Supplement or Medicare Advantage plan.

Medicare Plans

Lyndon Johnson enacted in 1965 Original Medicare consisting of Part A and Part B. Bill Clinton added Part C in 1997. George W. Bush added Part D in 2003.

Medicare Part A

For American citizens who have worked, Part A is without cost as the premium is $0. If you do not qualify for social security benefits, you may have to pay $426 per month for coverage.

Medicare Part A only covers a part of the below medical services.

• Hospital inpatient costs

• Skilled nursing facility care

• Home Health services

• Hospice care

What share of the covered services is every Part A covered person liable for?

• If admitted to the hospital, the patient must pay about $1,408 per admission. After 60 days in the hospital, the patient must pay about $352 per day until day 90 and then $704 per day. (Cost goes up each year).

• One must pay 20% of Medicare-approved durable medical equipment.

• Under Hospice, the patient cost is 5% of Medicare-approved inpatient respite care. Medicare does not cover any room and board costs for hospice patients in a nursing home.

• For mental health, inpatient stay costs are like other hospital stays, except patients pay 20% of Medicare-approved mental health services from doctors or other mental health providers while hospitalized.

• Skilled nursing costs zero dollars days 1-20; $176 days 21-100; and the entire cost beyond day 100 is born by the patient. Medicare has specific definitions of what is allowed to be called skilled nursing.

Part A does not cover doctor fees while in hospital (Hospitalist, Internist, Surgeon, Radiologist, Pathologist, Consultants). Nor does Part A cover any costs in the clinic, outpatient surgery center. It does not cover ambulance or ER costs.

Medicare Part B

Medicare Part B can be chosen at the time of registering for Part A. It can be deferred if one continues to be employed and covered under "creditable" health insurance. One can elect not to buy it, but that is not recommended as a financial penalty is associated with that choice. Medicare Part B costs 2021 $148 per month. Or it costs $828 per month if income as an individual over the last two years is above $214,000 annually. I recommend the premium be deducted from one’s Social Security monthly retirement check every month because the cost of living adjustment can reduce the premium. If not taken out of Social Security Income, please pay your Part B premium every quarter or monthly. If you miss a payment, Medicare cancels Part B and may delay reinstatement until the next calendar year. The other option is to have the premium automatically paid from your checking account.

Part B covers a portion of the inpatient Physician costs and outpatient costs such as Physicians, ER, Durable Medical supplies, Physical Therapy, Occupational Therapy, Speech Therapy, and Ambulance. However, there are Co-Pays, Co-Insurance, and Deductibles that the patient must pay.

What do one's financial obligations besides the premium cost?

• Annual deductible of $203. Before Medicare Part B covers anything, the patient must pay all costs up to the deductible threshold. Then it covers the following:

  • 100% for Medicare-approved clinical laboratory services.

  • 100% for home health care services

  • 80% of the Medicare-approved amount for durable medical equipment

  • 80% of the Medicare-approved amount for most doctor services while in hospital and as an outpatient.

  • 80% outpatient therapy but limits set on physical therapy, occupational therapy, speech therapy.

  • 80% of mental health services, provided they are Medicare-approved doctors or health care providers to diagnose or treat outpatient mental health services. It may also cost a co-payment and up to 40% if outpatient services are received in a hospital outpatient clinic.

  • 80% or more for any outpatient hospital services (Facility Charge). (Because hospitals, even in their outpatient departments, are allowed to charge higher fees.)

Financial Liability

As outlined above, Medicare Part A and Part B are a great deal as the premium price is most reasonable. Still, there is no financial protection from catastrophic financial losses if you really get sick. 20% of a lot of money is a lot of money. To protect one’s financial assets, there are many private insurance companies that, for a fee, will significantly limit one’s financial risk. There are options to choose Original Medicare Parts A & B and add a Medicare Supplement to cover the major gaps. Or one can choose Medicare Part C (Medicare Advantage) to cover the major gaps. Both options will be addressed in the following web pages.

Medicare Part D

“D” stands for “Drugs”. If one is covered under Part C, the drug coverage may be automatically part of the covered service. If one is covered under Part A and Part B, then you must find a private insurance company to provide Part D coverage and pay that company monthly. If you do not enroll in Plan D, there are financial penalties added to every future premium. In other words, if you are healthy at age 65 and take no medications, it makes financial sense to buy a Part D plan to protect you in the future as the financial penalties are severe. The penalty is significant enough to force everyone into getting pharmaceutical cost coverage. Basically, every year not on Part D, you will add about $35 per month to your Part D premium.

Go to www.medicare.gov and click on “Drug Coverage” and fill out the requested information (Zip Code, your medications, strength, dosage, pills per month, and the pharmacy you use) to find a list of plans in your State. Also, write down the numeric ID code so that you may return in the future and edit your list of medications. Record the ID code and the password for future access.

Standard Part D plan coverage: You pay 25% +- of your prescriptions until Out of Pocket (OOP) is greater than $4,130, and then you pay 25% of your prescriptions costs until you reach OOP greater than $6,550, and then you pay 5% of your prescription drug cost or $3.70 to $9.20 each.

Plans place all medications in four tier levels. First-tier is inexpensive generic medications and a month costs $3 to $10 for a month, depending on the policy. Second-tier is more expensive generics, and Third and Fourth tier drugs cost more and are not generic. Some new biologic drugs can have a retail cost of $3,000 to $8,000 or more per month. These end up in the 4^th tier and may require pre-authorization for coverage.

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