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What Will Medicare Cost Me?

Most people get both Medicare Part A and Medicare Part B as soon as they are eligible, which is usually the month they turn 65. Part A is for hospital admissions. Part B is for everything else: doctors, labs, emergency room visits, outpatient procedures.

Part A usually costs nothing. Part B currently costs $104.90 a month for the majority of beneficiaries. This premium can be more for higher-income households, or less for people who qualify for “Extra Help”.

If you’re receiving a Social Security check, Medicare will take the Part B premium directly out of that. Otherwise, Medicare will bill you quarterly.

What is Traditional or Original Medicare?
Part A and Part B together are “Original Medicare,” or “Traditional Medicare.”

How to Sign Up for Medicare

I’m turning 65. Should I sign up for Medicare?

Some people have good health insurance through their employer, and want to delay enrolling in Part B (and thus, paying the Part B premium). Even if they are delaying their Part B enrollment, most people take Medicare Part A when they are first eligible, since there is usually no premium for this coverage.

Will I be signed up automatically?

If you’re receiving a Social Security check when you become eligible for Medicare, you will automatically be enrolled in both Medicare Part A and Medicare Part B. You will receive a letter along with your Medicare card a few months before your 65th birthday or other eligibility date, with a note to contact them only if you don’t want Parts A and B. Medicare will take the Part B premium out of your Social Security check monthly. If you are not receiving a Social Security check, you will need to initiate contact to become enrolled.

How Do I Sign Up?

To enroll in Medicare, you can:

  • Call the Social Security Administration at (800) 772-1213. Make a cup of tea, and hold. The quality of help is usually good.
  • Use the above number to find your local Social Security office. If you need to show documents (more about this later), in-person is the best way. Appointments tend to work best.
  • Go to push the “Apply for Medicare” button.

The effective date will always be the first day of a month. For example, if you were born February 14, and are just turning 65, your earliest effective date will be February 1 of this year. (If your birthday is on February 1st, you get to move it up to January 1).

What is Medigap Insurance

Medigap is one name for Medicare Supplement Insurance, because it “fills the gaps” in Original Medicare. The three most important gaps in coverage are:

The Part A deductible of $1,316. This would be incurred in the case of hospital admission;

The Part B deductible of $183. Part B is for labs, doctors, E.R., ambulance, outpatient tests or surgery, and so on;

The 20% Part B coinsurance.

The last listed, the Part B coinsurance, leaves you with the biggest potential liability, since there is no cap on the expenses you pay 20% of.

Which Medicare Supplement Plan shall I get?

Choosing a Medigap Policy 2014_Medigap_Chart_Page_ 11

This table compares all the Medigap Plans available. The Plans are standardized by law, so there is no need to pay more for a Plan from one company over another.

How can I decide on which Plan to get?

After years of working with Medicare Supplements, I recommend these four plans:

Plan F pays everything after Medicare, and consequently is the most popular Medicare Supplement Plan in the country;

Plan G pays everything in the hospital, and everything outpatient except for the $183 annual Part B deductible;

Plan N costs about a third less, and pays everything in the hospital. It requires good bookkeeping as the providers will mail bills;

Plan Hi-F puts a cap on out-of-pocket payments that you pay. The annual cap is $2,200.

Run a quote on the above letters, and you will be able to narrow down the field to find the best Medigap Plan for your needs.