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Turning 65

Turning 65 is like becoming a celebrity. Everyone sends you mail and calls you, even if you don’t know who they are. So what are you to do? Who are you to trust?? Both are important questions and can have life-altering financial consequences if you choose wrongly. I say that not to scare you but to encourage you to think carefully about Medicare choices and seek information and advice from reputable insurance agents. Throughout this document, I have links to other helpful content. The links will open in a new tab so that you can quickly return to this guide.

Suppose you are turning 65 like most people taking this step. In that case, you’ll be eligible for Original Medicare Part A and Part B.  Original Medicare is for all people 65 or older and those under 65 who have specific disabilities. So let’s start making Medicare clear right here from the beginning.

  • Medicare Part A provides hospital and other inpatient coverage.
  • Medicare Part B provides outpatient medical coverage, like doctor’s office visits.  
  • Both Parts A & B have gaps in their coverage, which are what supplemental insurance covers. Additional policies are called Medigap policies and cover things like deductibles, co-insurance, and charges from a doctor that are beyond what Medicare accepts.

Medicare Part A and Part B are standard for all subscribers. Medigap policies that you purchase to cover the gaps are multiple, and each Medigap policy covers slightly different pieces of the holes and charges additional fees for their coverage.

How Much Does Medicare Cost

The costs associated with Medicare change every year. Congress determines them based on what the Medicare Trustees Board recommends. Most of us don’t like that, but that’s how it works. Medicare Part A, for most people, is paid for in total if you worked 40 quarters (10 years) and settled into Medicare through payroll taxes or self-employment tax. Most Medicare Part B is born the same way, typically covering 75% of the cost, leaving you with 25%. Easy peasy, right? Nope! This changes yearly based on your income: If you make more than their standard, you will pay more.

2019 Medicare Costs
2023 Medicare Costs

I have a FREE ebook I put out every year describing the costs associated with Medicare. You can register to receive it or download it here.

Will I be Automatically Enrolled in Medicare

Medicare already knows about you if you signed up to take Social Security earlier than age 65. They will automatically sign you up for both Parts A & B and send your Medicare card three months before your 65th birthday. Included with your Medicare card will be a way to opt out of Medicare Part B.

How do I know if I should opt out of Part B (outpatient care)? You might want to opt out if you continue working and have health coverage through your or your spouse’s employer. There would be some problematic consequences if you were opt-out without sufficient coverage. We would strongly advise consulting with us about your situation.

If you are automatically enrolled in Medicare, your effective date will be of the 1st day of the month of your birthday. For example, if your birthday were August 21, your Medicare coverage would start on August 1. However, to confuse you more, if your birthday falls on the first of the month, your Medicare coverage will begin the prior month. For example, if your birthday is on August 1, your Medicare coverage will start on July 1, the month before.

Manually Enrolling in Medicare

If you are not taking Social Security, Medicare doesn’t know about you. I don’t know how not, but that’s a different question for another time. It is a relatively easy process if you manually enroll in Medicare. I have had clients in my office go through the process in roughly 10 minutes. (Not too bad for a government process!) You can read about this process, if you would like, by clicking the following link: https://www.avenueinsuranceplanners.com/how-to-enroll-into-medicare/   

Please make a note on your calendar. You will want to start this process three (3) months before your 65th birthday to ensure coverage by your birth month.

Note:  Start the Medicare enrollment process three months before you are 65

How to Fill in the Gaps of Medicare

Wowee! You’ve enrolled in Medicare! Some clients have told me that this is where it becomes indisputable that they are getting old, and I don’t know about that because the people I’m around who are over 65 seem to be having much more fun. But I digress! You can now choose whether to stay with Original Medicare and a Medigap plan (Medicare Supplement) or a Medicare Advantage plan (Part C). The diagram below, put out by Medicare a couple of years ago, walks you through this choice. Following the chart, I give you some examples to make it all more understandable.

Medicare Choice, Do you go with Original Medicare with a Medigap, or a Medicare Advantage

Original Medicare and Medigap

Clear as mud? Just read on, and hopefully, these examples will clarify for you. On the left side is Original Medicare. This allows you to go to any doctor or hospital that takes Medicare in the USA, Guam, Puerto Rico, and the US Virgin Islands. Original Medicare operates most closely to a PPO (Preferred Provider Organization) plan where you control who you want to see and don’t need a referral. I like that last part: if you need to see a podiatrist for a foot issue, you can see a podiatrist. You don’t need to seek the approval of your primary care doctor or your insurance company. Your choice of supplemental coverage (Medigap plan) will determine what costs you want the insurance company to pick up versus how much you are willing to pay out of your pocket.

If you decide to skip the country, Medicare has no coverage outside the United States. However, some of the Medigap plans do. Look at our travel page.

Medicare Part C (Medicare Advantage)

On the right side of the diagram above is Medicare Advantage or Part C. This is where you assign (give) your Medicare benefits to an insurance company. Medicare Advantage plans are typically HMO (Health Maintenance Organization), but some are PPO or PFFS (Private Fee For Service). If you choose this route, you will normally have a designated network of doctors and hospitals that you must use for services. You will most likely have some sort of co-pay, or co-insurance, to pay when you receive the service. In addition, you will have an out-of-pocket maximum. All of these costs are in addition to the premiums you pay for the plan.

However, these plans have to pay as well as Medicare, which may offer some extra benefits. I think these plans are over-marketed due to the money the insurance carrier and agent make by selling the project.  

Medicare marketing guidelines do not allow detailed discussion of these plans in public spaces like this blog. However, if you call or meet with us in person, I can and will talk about the Medicare Advantage Plans in great detail.

You may also want to check out the difference between Medigap and Medicare Advantage.

What about Medicare Part D

Medicare Part D is the prescription drug plan. Usually, if you choose a Medicare Advantage plan, it will include Part D coverage. However, if you choose Original Medicare, you should also select a Part D plan. I’m frequently asked, “What if I don’t take any prescriptions? Do I need a Part D plan?” My answer is a resounding “Yes!”

We buy insurance for the future, not necessarily the present. Regarding a Plan D, it is essential to know that Medicare will ding you with a penalty if you don’t get a Part D plan when it is first available, but wait until later. This penalty is applied to your Part D premiums for the remainder of your life and is not a one-time charge.

Since these Part D plans are constantly changing, we work with our clients annually to help them choose the best Medicare Part D plan. We would love to work with you as well.

Why Choose Us

That is a fair question! Brian Gruss, the owner of Avenue Insurance Planners and www.Justmedigap.com, has been specializing in Medicare since he was licensed as an insurance agent by the State of Washington in March of 2007. He is now licensed in most states and works with clients nationwide. Brian operates as an independent broker, which means he doesn’t have to sell one insurance carrier but can find the best of many. Since Brian spends an average of 150 hours a year researching and studying Medicare, he is known as an expert resource for Medicare to other insurance agents. Brian receives referrals from current clients, CPAs, doctors, and financial planners. Learn more about Brian Gruss and Avenue Insurance Planners by clicking on the About Us page on the menu bar above.  

Medicare Resources