Eligible for Medicare

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Let’s clear something up right here at the beginning of your Medicare Education!

The government, in its infinite wisdom, long ago chose to use the exact same letters of the alphabet to mean entirely different things. Notice, in the links above, that I have placed links to my explanations of Medicare Parts A, B, C & D. These are the four Parts of the Medicare Program, a Federal insurance program for our Nation’s Seniors and certain other, primarily disabled, persons in our population.

Then, in 1990, when the government instituted standardization of Medicare Supplement policies (a good thing in and of itself), they used some of the exact same letters to designate the different Medicare Supplement policies that could be sold to the general Medicare Aged population. They are called Medicare Supplement Plans.

All I can recommend you do, to save you a lot of confusion, is to become familiar with the terms.  A Part of Medicare refers to one of the four basic parts of Medicare. They are:

Medicare Part A (Hospital Insurance),

Medicare Part B (Medical, which means “Doctors” in the insurance language but also covers Hospital Outpatient such as an Emergency Room, Ambulance and Rental of Durable Medical Equipment or DME)

Medicare Part C (Medicare Advantage, a combination of Medicare Parts A & B, and is actually Medicare replacemnet coverage) and

Medicare Part D (Prescription Drug Coverage).

Medicare Supplement Plans are private insurance policies that supplement, i.e. pick up, where Medicare leaves off and they are known as:

Plan A, Plan B, Plan C, Plan D, Plan F, Plan G, Plan K, Plan L, Plan M and Plan N.

Medicare further confuses things by using some of these same letters as part of your Medicare Number. Let me try to sort it out for you.

If the letter at the end of your Medicare Number is an A, it simply means that your Social Security benefits are based on your earnings over your working lifetime and your Medicare Number is, actually, your Social Security Number with the addition of the letter. If the letter is a B, it means that your Social Security benefits are based on someone else’s (usually a spouse’s) earnings.

You may also notice that, if your Medicare Number ends in a B, the number, itself, isn’t your Social Security Number, but your spouse’s. If your Medicare Number ends in a D, that means that the spouse, from whose earnings your benefits are derived, has passed away.

If your Medicare Number ends in a T, that means that, while you do have Medicare coverage, you do not presently get a Social Security benefit so there is nothing from which Social Security can deduct your Medicare Part B premium. So you have to pay Social Security for Medicare Part B out of your personal funds. Once you begin to receive your Social Security benefit, Social Security will deduct the cost of your Medicare Part B coverage from your Social Security Benefit before depositing that money in your bank account.

You will get a new Medicare Card and the letter at the end of your Social Security Number will have changed to an A. There are other letters that Medicare uses but these are the four most common.

So, because of the way it has all developed over time, you could have Medicare Part A, Medicare Part B, have a Medicare Number that ends in an A or a B and also have a Plan A or a Plan B Medicare Supplement. Small wonder that people get so confused over all of this.

OPEN ENROLLMENT

Turning 65 is a magic moment for you with regard to your health coverage. Not only can you qualify for Medicare Part A & B (as well as Medicare Part D which is discussed in another article on this website), but you will have a 6 month Open Enrollment Period within which you can sign up for any Medicare Supplement with any insurance company that offers them and you cannot be turned down! They’re not even allowed to ask you any health questions. They have to take you! You could be lying on your deathbed, dying of cancer, and they would still have to accept you as a client. Moreover, most of the better companies do not impose a waiting period for pre-existing conditions. Your coverage begins with the policy effective date. Period.

If you are coming onto Medicare before age 65 due to a disability, this Open Enrollment Period also applies to you. By law, every insurance company that sells Medicare Supplement policies must make an A Plan Medicare Supplement available to people who are covered under Medicare by virtue of a disability. But they don’t all have to offer it at the same price.  And, here’s that part that we Agents are not too crazy about, they don’t all pay the same commission to the Agent.  In fact, I received correspondence from one insurance company recently that reduced the commission to $5. Most Agents will not sell the A plan for that insurance company.  I dare say that most of us won’t sell any plans offered by that company.  That is the risk the insurance company took when they made that decision.  We’ll see how it works out for them.

Most Medicare Supplement insurance companies would rather not have to offer coverage to people who are disabled because, statistically speaking and practically speaking, disabled people will have more health insurance claims than the rest of the general population.

So, in part because the claims ratio is disproportionately higher on A Plans owned by disabled people and, in part because these insurance companies tend to want to discourage disabled people from applying for an A Plan, the premiums for these plans are much higher than the premiums charged to others who have simply aged into Medicare.

But, high premiums or not, the coverage is available to you only if you apply during your 6 month Open Enrollment Period. Once that 6 months is up, however, even if you can answer “No” to all of the health questions on their application, most Medicare Supplement insurance companies will not take you.  That doesn’t mean that you will lose the coverage after 6 months.  It means that you can buy it during your first 6 months of eligibility for Medicare and you can keep it as long as you pay the premium.  But, if you are on Disability Medicare and you allow that first 6 months to go by without taking this plan out, you will not be able to buy it even if you can legitimately answer all of the health questions “No”.

When you do actually turn 65, you will get another 6 month Open Enrollment Period, another bite at the apple so to speak, and you can, at that time, apply for any Medicare Supplement sold by any insurance company.

Another important point: If you are Medicare age and, even though you remained on your group plan at work, you’re already enrolled in Medicare Part B but you did that so long ago that you no longer qualify for the 6 month Open Enrollment Period, don’t fret if you lose your Employer Sponsored Group Health Insurance. You will have a 63 day right to get a Medicare Supplement beginning with the lapse date of your coverage with your group plan, usually the last day of the month that your employment ended. This 63 day period is known as the Guaranteed Issue Period.

The only policies available during this Guaranteed Issue Period are the A Plan, the B Plan, the C Plan or the F Plan. That’s important to know if you have significant health problems when you leave your Employer coverage. If your health is good, however, and you can answer “no” to all of the health questions on an insurance company’s Medicare Supplement application, you can get a G Plan if you want it. Some folks do for reasons of premium savings. More on that later, too.

There are a total of ten standardized Medicare Supplement plans to choose from:

They are all grouped together on one page…a chart, if you will…and you can view that chart by clicking here. Also, of the 10 available plans, I have a link for the A Plan, the B Plan,, the “C” Planthe F Plan (which includes information of the High Deductible F Plan), the G Planthe “K” Planthe “L” Plan and the N Plan. Clicking onto any of those links above or in this paragraph will take you to an Outline of Coverage for that particular Plan.

Of those ten, there are really only two or, at the most, three that you should concentrate on…the “F” Plan and the “G” Plan and perhaps the “N” Plan. The rest are such poor coverage and the minimal premium savings from those plans does not begin to make up for the lack of coverage on things you really need coverage for.

The “F” Plan Medicare Supplement pays everything Medicare does not pay. That’s a little overly simplistic but it is, generally, true. Two examples of things Medicare will not pay for are X-Rays that are performed in a Chiropractor’s office and read by the Chiropractor and ambulance charges for anything but a trip to the hospital or from the hospital to another hospital.

Medicare believes that only a Radiologist is qualified to read an X-Ray. Most Chiropractors know this so they farm their X-Rays out to a Radiologist. Medicare has some very restrictive rules on which ambulance charges they will cover and I go over that in some detail on the button entitled “What Is Medicare Part B and How Does It Work”.

Other than those two things, Medicare will cover the overwhelming majority of the medical expenses you have beginning with the first day of the month in which you qualify for Medicare Part A & B. Usually, that coincides with the month in which you turn age 65 but it can be earlier or later depending on circumstances I discuss at some length in the buttons marked:

  • What Is Medicare Part A and How Does It Work?
  • What Is Medicare Part B and How Does It Work?
  • What Is Medicare Part C and How Does It Work?
  • What Is Medicare Part D and How Does It Work?
  • What Is Medicare Disability and How Does It Work?

Be sure to read those pages.

A “G” plan Medicare Supplement pays everything Medicare doesn’t pay except a one-time-per-year deductible on Medicare Part B expenses (generally, Doctors but can also include Hospital Outpatient, which usually means Emergency Room), and rental of durable medical equipment (DME) expenses as well as ambulance bills. That deductible for 2017 is $183. Interestingly, that deductible in 1967 was $50. It didn’t go up every year, like the In-Patient Hospital Deductible has, but, by 2011 it had climbed to $162. The reduction in 2012 to $140 was the first year in Medicare’s history that the Part B deductible actually went down. Must have been an election year, ya think?  It has since gone up but only to $147 in 2013, 2014 and 2015 and now $183 in 2017.

Other than that, the policies are identical except in price. Generally speaking, comparing the “F” Plan to the “G” Plan, the “G” Plan saves you more in premium than you lose in benefits by having to pay the deductible if and when you have Medicare Part B expenses. Of course, if you don’t want to have a deductible to have to keep up with, there’s absolutely nothing wrong with the “F” Plan. It is the plan most people have chosen in the past.  I firmly believe that, if they knew more about this subject, they’d opt for the “G” Plan.

I write extensively on how all four parts of Medicare, A, B, C & D, work elsewhere in this website and I strongly urge you to read those pages. They will give you a plain English understanding of how Medicare works and you will profit from that knowledge. You’ll find that it’s not quite as mysterious as it might have seemed to you at first glance.

One way you can save some money on your Medicare Supplement premium is to buy what’s known as a “Medicare Select plan”. This is a Medicare Supplement like any other but it has one significant drawback in how the hospital is covered. A Medicare Select plan pays nothing on the In-Hospital Deductible unless your hospital admittance is on an emergency basis.  In 2017 it is $1,316. As long as you use a hospital that is in that plan’s network, that hospital will waive the deductible so you’ll see no difference in your cost at the hospital.  Your insurance company will notify you, when you buy the policy (and, besides, your agent should know) what hospital(s) in your area is/are in their network.

Network Hospitals can change so be very careful.  If you buy one of these policies, you need to periodically check with your insurance company to find out which hospital(s), if any,  in your area are considered Network Hospitals.  I have seen one case in particular where a lady had a Medicare Select policy and one of the hospitals here in Amarillo was a Network Hospital for this company at the time she bought the policy and, at some point in time, ceased to be a Network Hospital and the insurance company failed to contract with another hospital in Amarillo and, most egregiously of all, failed to notify their Medicare Select clients that there was no longer a Network Hospital in Amarillo.  The nearest one was in Lubbock.  Somebody at that insurance company should have been taken out behind the woodshed over that.

If you use any other hospital, however, you will be responsible for that In-Hospital Deductible (all $1,316 of it) unless you are admitted on an emergency basis. And, remember, an emergency in the insurance language means a threat to life or limb. A tummyache or even a migraine headache are examples of things you can be admitted to the hospital for that are not considered emergencies. For those of you who have suffered migraine headaches, when you get one, you probably don’t think you’re going to die…you just wish you could!

Medicare Select premiums are less than standard Medicare Supplement premiums but your savings will simply evaporate if you need to be hospitalized in a non-network hospital for a non-emergency condition such as a knee replacement or a hip replacement or any number of other non-emergency diagnoses.

Medicare Select plans do not affect your Medicare Part B (Doctors, ER, DME or Ambulance) coverage, only what hospital you can use. But, remember this: Not all Doctors have privileges at all hospitals. The Doctor you want to use for a particular procedure may not have privileges at your Network hospital. That’ll cost you, so caveat emptor (buyer beware) and choose wisely if you decide to buy a Medicare Select Plan Medicare Supplement.

Another money saving option is a “High Deductible” plan. Traditionally, these are “F” plans, just like any “F” plan but you will be responsible for the first $2,200 of your own medical expenses that otherwise would have been covered by the policy.

With the “K” Plan and the “M” Plan Medicare Supplements, you would be responsible for one half of the In-Patient Hospital Deductible. If you have multiple Benefit Periods in the same year (unlikely, but it does happen), that responsibility would be capped at $4,960. With the “L” Plan, you would be responsible for 25% of that deductible and, in the event you have multiple benefit periods in the same year, that 25% responsibility on your part would be capped at $2,480.

While any of these strategies can save you some premium dollars, the savings can disappear entirely if and when you actually use the policy. Keep in mind, the whole reason you’re buying a Medicare Supplement is because you may need it some time. So, my opinion has always been, if you don’t think you’re ever going to need health insurance, why buy any health insurance at all? The truth is, none of us have a crystal ball. I don’t know what the future holds for any of us. So, I believe it is better to have the coverage and not need it, than to need it and not have it. For whatever my opinion is worth to you, buy the best coverage you can afford. You will be very glad you did.

It is for these reasons that I generally do not recommend the Medicare Select Plans, the High Deductible plans or either the “M” or “L” Plans.

The “N” Plan has some redeeming features and some drawbacks, as well. First, the “N” Plan is relatively cheap in premium so that’s a plus. The “N” Plan does NOT cover the Medicare Part B Deductible ($183 for the year 2017), but neither does the “G” Plan. The “N” plan also requires that you pay a copay of up to $20 for each Office Visit you have. That does not include Radiology charges, Diagnostic Pathology or rental of Durable Medical Equipment (DME) or Ambulance charges. The copay is only charged for an actual office visit but it is charged for each an every one of them.

Let’s explore that for a moment.  If you have an Office Call charge of, say, $75 and Medicare approves $60 on that charge.  Let’s further stipulate that you had already met your $183 Medicare Part B Deductible earlier in the year.  Medicare is going to pay 80% of the Medicare Approved Charge, or $48.  The remainder of that bill is $12.  But, since $12 is less than the $20 copay your “N” Plan Medicare Supplement requires you pay for an Office Visit, that $12 is your responsibility.

Let’s use a somewhat larger example.  Let’s say you had a Doctor’s Office Visit charge of $200 (as some Specialists charge) and Medicare approved $150 and you had already met your Medicare Part B Deductible of $183 earlier in that year.  Medicare will pay $120 on that bill leaving a balance of $30.  Your N Plan Medicare Supplement will pay the part of that bill that exceeds $20, in this case $10, and you will have to pay your $20 copay under that plan.  Suffice it to say that, in both of these examples, you will have paid more than your Medicare Supplement policy (for which you are paying good money) paid.  These two examples should convince you that the “N” Plan is one of the lest desirable Medicare Supplements to have.  Still, some people think it’s a good plan and, like my Daddy used to say when I was a kid, “To each their own, said the lady as she kissed the cow.”

Moreover, if your Doctor does not accept assignment from Medicare, he or she can charge you an extra 15% above the amount Medicare approves on his or her charges. That extra 15% is NOT covered by the “N” Plan. It IS covered by the “F” Plan and the “G” Plan. In that event, you would be responsible for that extra 15% unless you can work out an arrangement with your Doctor(s).

Additionally, with an “N” Plan you would be responsible for a copay at an Emergency Room of up to $50.  And 20% of $250 is $50.  Believe me, very few Emergency Room bills will be $250 or less, if any.

None of these are large sums of money but, taken together, they can add up to a point where you are actually paying more on your Doctor’s bills than your plan is and that will seem troubling to you, especially if you are engaged in a long term series of treatments such as cancer care.

Again, for whatever my advice is worth to you, the only plan that saves you enough money to warrant taking less than 100% coverage, which is what the “F” Plan does for you, is the “G” Plan. I would limit my consideration to those two choices.

Can I ever disenroll from Medicare Part B and, if I do, can I get back in?

Yes and yes. But it’s a little more involved than that. Medicare part B is completely voluntary. You must pay a premium to Social Security in order to have that coverage. The minimum monthly premium is $134 currently. If you enroll when you first become eligible for Medicare Part B (usually on the first day of the month in which you turn 65) and then later decide to disenroll, you can do that and you must contact the Social Security Administration (National Number 1-800-772-1213) for instructions on how to do that.

Now, if you disenroll because you are going to be covered by an Employer Sponsored Group Health Insurance Plan (ESGHIP), and then later lose that coverage, you may re-enroll in Medicare Part B, without penalty, during the month in which you lose your ESGHIP and for 8 months thereafter. Being covered by COBRA doesn’t count. You must be actively employed and on, or about to go on, your Employer’s Group Health Insurance Plan.

However, if you disenroll and do not have an ESGHIP to go to, and then later want to re-enroll in Medicare Part B, you will only be able to re-enroll during the General Enrollment Period (January 1st through March 31st of each calendar year), your coverage will not be in effect until July 1st of that same year and you will pay a 10% penalty (extra Medicare Part B premium) to Social Security for each full 12 month period during which you had opted out of Medicare part B.  And that is a lifetime penalty.  You’ll never lose it.