Learn the ABCDs of Medicare!

Dear Mr. Market:Understanding Medicare: The ABCDs

One thing any of our readers will know if that we don’t pretend that we (or anyone) owns a crystal ball. The only thing we can promise you about tomorrow is that the day ends in the letter “y”.

One other thing that we know will happen…God willing…is that you will eventually retire or be 65 and eligible for Medicare. In advance of National Medicare Education Week we are doing two things:

(1) We’re sharing this article written by Steven Stasioski and,

(2) We’re happy to announce a free educational event where we’ll be addressing the ins and outs of Medicare. On October 17, 2019 at 6:30pm you can join Matt Pixa from My Portfolio Guide and Steven Stasioski from SCS Tax & Insurance Services at the Seal Beach Yacht Club. Bring your appetite and questions for a great evening of education and camaraderie. RSVP via email at matt@myportfolioguide.com or call (562)799-5595.

Now…on to the article!

On July 30, 1965, President Lyndon B. Johnson enacted Amendments to the Social Security Act that established the Medicare program.   Today there are more than 60 million Medicare beneficiaries and that number is increasing exponentially as approximately 10,000 people are becoming Medicare eligible every day.  Unfortunately, most people don’t understand many aspects of Medicare.  “National Medicare Education Week” is September 15th through 21st and is a good time to clarify the program.

Medicare is a federal government health insurance program that provides basic health insurance to people 65 years or older and to people on permanent disability.  There are four parts to Medicare.  Part A is hospital insurance, which helps cover care when a beneficiary is admitted to a hospital or skilled nursing facility.  Part B is medical insurance, which helps cover doctor visits and outpatient care.  Part C is private insurance which covers everything parts A and B cover plus more.  Part D is prescription drug coverage.  Parts A and B, also called “original Medicare,” are provided by the federal government and Parts C and D are provided by private insurance companies.

Most Medicare beneficiaries choose to increase their original Medicare benefits and services by enrolling in to a Medicare Advantage plan or Medicare Supplement plan.  A Medicare Advantage plan is administered by a private insurance organization and is referred to as Part C.  It covers Parts A and B and can cover Part D in addition to extra benefits and services at no extra cost.  A Medicare Supplement plan, also called “Medigap,” is a private insurance plan that supplements original Medicare for an additional premium.   Original Medicare covers about 80% of approved costs, which is why most Medicare beneficiaries enroll in to a Medicare Advantage or Medicare Supplement plan.

There are several types of costs for a Medicare beneficiary to be aware of before utilizing the benefits and services of the plan.  Premiums, copays, coinsurance, deductibles, and maximum out of pocket costs are not the same for everyone and depend on the type of plan selected.  For example, most Medicare beneficiaries paid a Part B premium equal to $135.50 per month this year, but others paid up to $461.50 per month due to previously reporting higher income.  Some Medicare beneficiaries may enroll in to a Medicare Advantage plan with service copays and others may enroll in to a Medicare Supplement plan with 100% coinsurance coverage.  It is important to understand the costs of Medicare and private insurance.

th-9The Medicare program schedules actionable event periods throughout the year.  Two such periods are the Initial Enrollment Period (“IEP”) and the Annual Election Period (“AEP”).  The IEP gives a 65 year old Medicare beneficiary a seven month calendar to enroll in to a Medicare Advantage plan and a six month calendar to enroll in to a Medicare Supplement plan.  It is also necessary to obtain Part D – prescription drug coverage within the IEP.  The AEP gives all Medicare beneficiaries a period to enroll in a new plan for the next calendar year.  The AEP for new plans with an effective date of January 1, 2020 is scheduled for October 15 – December 7, 2019.

There is an overwhelming amount of information on Medicare and all beneficiaries receive a plethora of it during the enrollment periods.  Unfortunately the information is not always as simple as A B C D and adds layers of complexity to a health insurance program that is already misunderstood by many people.  It is important to find a trusted source of information that simplifies the many aspects of Medicare and National Medicare Education Week is a good time to do so.

Once again if you want to learn more in person and enjoy a nice evening on us, just RSVP via email at matt@myportfolioguide.com or call (562)799-5595.

Steven C Stasoiski is a registered Tax Professional A145961 and Licensed Health and Life Insurance Agent 0I29977 who provides service to individuals, families, small businesses, and Medicare beneficiaries.  He lives in Seal Beach, CA and can be reached at 562.596.7213 or scstasoiski@gmail.com with any questions.

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