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Medicare Decisions

What is Medicare?

Medicare is a federal health insurance program in the United States that provides affordable insurance to Americans over 65 years old and other qualifying individuals.

Your medicare choice:

When you first enroll in Medicare, you have the option to choose from two main types of coverage:

Original Medicare (consisting of Part A and Part B) or a
Medicare Advantage Plan (Part C). Additional coverage options, such as Medicare drug coverage or Medigap, may also be necessary for some individuals.

Medicare has its own page to assist you in comparing your coverage options and determining the best fit for you. You can find it here.

Original Medicare:

Original Medicare, as previously stated, includes:

Medicare Part A (Hospital Insurance) and
Part B (Medical Insurance).

Medicare Part D (drug coverage) is also available as a separate plan.

With Original Medicare, you have the freedom to visit any healthcare provider that accepts Medicare anywhere in the United States. To cover out-of-pocket costs, such as coinsurance, additional supplemental coverage can be purchased.

To learn more about Original Medicare, please visit the official website for more information.

Medicare Advantage (also known as Part C):

Medicare Advantage, also known as Part C, is a type of Medicare-approved plan offered by private companies as an alternative to Original Medicare. These “bundled” plans typically include coverage for Part A, Part B, and often Part D as well.

With Medicare Advantage, you may be required to use healthcare providers within the plan’s network. Additionally, out-of-pocket costs may be lower than those associated with Original Medicare, and some extra benefits may be included.

When to File

Initial Enrollment Period

If you are eligible at age 65, there is a seven-month Initial Enrollment Period (IEP) consisting of the three months prior to your birthday month, the month of your birthday, and the three months following your birthday month.

If you enroll within the first three months of your IEP, your coverage begins the first month you are eligible. If you enroll in your birthday month or in the following three-month period, your coverage begins the first day of the next month.

Special Enrollment Period

As long as you or your spouse continues working and are covered under a group health insurance plan covering ten or more employees, you can enroll in Medicare beyond the age of 65 at any time. However, if you or your spouse leaves work or loses coverage, you have eight months to sign up for Medicare.

General Enrollment Period

If you miss the Initial Enrollment Period or General Enrollment Period, you can sign up for Medicare from January 1st to March 31st each year, with coverage beginning on July 1st. Beware however, as you will be charged a late penalty that will increase your premiums for life.

Medicare Costs

Income Related Monthly Adjustment Amount (IRMAA):

IRMAA is a surcharge added to your base premium for, essentially, earning too much money. In 2023, if you earn over $97,000 as a single filer or over $194,000 as a joint filer, then IRMAA applies to you. It’s important to keep up-to-date with the income requirements as they change on a yearly basis.

The adjustment is based on the income claimed in your most recently filed tax return, which is the income you earned two years prior. For example, your 2023 IRMAA adjustment is based on your 2021 income. This has implications for any planned Roth conversions, 401(K) withdrawals, and sales of stocks and bonds, so it is important to time things right.

Fortunately, there are ways to appeal IRMAA if you have experienced a qualifying life-changing event, such as the death of a spouse, divorce, or marriage.

Medicare Decisions

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