In This Post You Will Find:
- What is Medicare?
- What are the Parts of Medicare?
- What About Part B premiums for those 65+?
- How do people 65+ enroll in Medicare and when?
- Getting Medicare If You Are Disabled
- 4 Kinds of Medicare Savings Programs
- 4 Kinds of Medicare Savings Programs
- What if I am already receiving SSI when I become eligible for DAC through my parent?
- What if a DAC recipient wants to try working? Can they keep Medicare?
- What’s the scoop on Medicare and long-term care?
- What other costs are part of Medicare?
- Medicare Terms to Know:
- But wait… there’s one more player in the game. Meet Medigap!
- Medigap (Supplement) and Medicare Advantage Plans
What is Medicare?Medicare is a U.S. government-run health insurance program for qualified workers age 65+ and some people with disabilities. It is run by the federal government or the government for our whole country. The money that pays for Medicare comes from 2 trust funds held by the U.S. government (Medicare 2021). The first fund, the Hospital Insurance fund, pays for Part A costs such as inpatient hospital stays, limited home health services, and limited stays in skilled nursing facilities. I will talk more about the parts of Medicaid later (Medicare 2021). The money from the hospital insurance fund comes from:
- Payroll taxes
- Income taxes on Social Security retirement benefits
- Interest on trust fund investments
- Premiums, or monthly payments, from people who don’t get Part A for free (2021).
- monthly premiums
- interest earned on trust fund investments.
What are the Parts of Medicare?Medicare has 4 parts, each represented by letters. Part A: Inpatient hospital care and some limited home health care, limited nursing home care Part B: Outpatient care such as doctor’s visits and some limited home health care Part C: Is also called an advantage plan (MA plan), which allows the government to contract with a private company to deliver Medicare benefits. Part D: Prescription drug coverage (Bunis 2021). You can receive Part D benefits in two ways:
- A separate drug plan
- An MA “Part C” plan that includes drug coverage
- What providers participate
- What coverage rules apply
- Cost-sharing rules
- Any additional premiums (Center for Medicare Rights 2021).
- People age 65+ (and in some cases, their spouses)
- Some workers with disabilities who are receiving Social Security Disability Insurance (SSDI) because they can’t work in a way the government calls substantial
- Some adult disabled “dependents” of a qualified worker who is 65+, on SSDI, or deceased (Bunis 2020)
- Must be a U.S. citizen or legal resident for 5+ years (Bunis 2020)
- You can get Medicare at age 65 regardless of income (how much money you make)
- Worked at least 40 quarters or 10 years in a U.S. job where you paid Social Security taxes
- Are eligible for railroad retirement benefits
- Have a spouse who gets premium free Part A
- Worked at a government job where you paid Medicare payroll taxes (Center for Medicare Rights 2021b).
- If you or your spouse worked 30-39 quarters (7.5-about 10 years), Part A costs $259 a month in 2021 (Medicare 2021b).
- If you or your spouse worked fewer than 30 quarters, Part A costs $471 a month in 2021. (Bunis 2021).
What About Part B premiums for those 65+?All non-disabled Medicare enrollees regardless of how long they have worked will pay a premium for Part B. The premium varies based on how much money you make for the year and can change each year. The most common premium is $148.50 per month in 2021 (Centers for Medicare and Medicaid Services 2020).
How do people 65+ enroll in Medicare and when?Eligible for Premium Free Part A & Receiving Retirement Benefits Too- Automatic Sign Up If you are turning 65 and receiving Social Security retirement or railroad benefits at that time, you will be automatically enrolled in Medicare Part A and Part B (Center for Medicare Rights 2021b). Three months before the month of your 65th birthday, when coverage begins, you will get a red, white, and blue Medicare card in the mail from either Social Security or the Railroad Retirement Board (Center for Medicare Rights 2021b). If you are receiving Part A without a premium, you don’t have to say yes to Part B. Some people don’t want Part B right away because it has a premium. If you decide you don’t want Part B, there are directions about what to do. You can read about those directions here: What If I Don’t Want Part B? You should only delay signing up for Part B if you are still covered by job-based insurance through your job or your spouse’s job (2021b). Further, you should only delay signing up for Part B if your job-based insurance pays bills before Medicare. This means your job- based insurance is the primary payer (2021b). Otherwise, you could get a lot of medical bills. Job-based insurance is typically the primary payer for people 65+ if your workplace has 20+ workers (Center for Medicare Rights 2021d). You can read more about how Medicare works with job -based insurance here: Medicare & Other Insurance If you have job-based insurance and delay signing up for Part B, you will likely get a special enrollment period (SEP) if you want to sign up for Part B when the insurance through the job ends (2021e). There is no penalty if you sign up for Part B during the SEP: within 8 months of the job- based insurance ending (2021e). The coverage starts the month after you enroll. *If you anticipate losing your job-based coverage, sign up for Medicare the month before that coverage ends* (2021e) If you do not have job-based insurance and delay enrolling in Part B, it will cost more if you want to sign up later because of a penalty payment (2021c). Further, if you do not sign up for Part B automatically in the months near your birthday or during an SEP following the loss of job- based insurance, you have to wait until the general enrollment period between January 31 and March 1 with coverage starting July 1. You will have both a coverage gap and a penalty payment for joining Part B late (Center for Medicare Rights 2021e). **If you are younger than your spouse and will be getting Medicare based on their record, you will not receive Medicare until you yourself are 65** For example: Jen is 62 and will qualify for Medicare based on her husband Bill’s record. Bill is 65 and will get Medicare now, but Jen won’t until she turns 65. Age 65, Eligible for Premium Free Part A and Not Receiving Retirement Benefits- You Have to Actively Sign Up for Medicare
- Call Social Security at 800-772-1213
- Write a letter to Social Security
- Visit a Social Security office
- Go to www.ssa.gov
- Your first chance to enroll in Medicare Parts A & B is the Initial Enrollment period or IEP. It is the 3 months before you turn 65, the three months after you turn 65, and the month of your birthday (Center for Medicare Rights 2021c).
- Finally, if you did not enroll during the IEP and do not qualify for an SEP you have to sign up during the General Enrollment Period (GEP) (2021e).
- Call Social Security at 800-772-1213
- Write a letter to Social Security
- Visit a Social Security office
- Go to www.ssa.gov
Getting Medicare If You Are DisabledMedicare with Social Security Disability Insurance (SSDI) Under Age 65 How do people with disabilities get (SSDI)? In this context, we mean people who are “disabled” by the Social Security definition for Social Security Disability Insurance benefits or SSDI. You can be medically disabled, but not meet the government criteria of disability. To get SSDI, your disability has to prevent you from working in what the government counts as a substantial way. In 2021, that means you didn’t earn more than an average of $1310 monthly for the year (Social Security Administration 2021). It has to be severe by government standards and expected to last 12 months or result in death (2021). Typically, people who have been receiving SSDI for 24 months (2 years) will be automatically enrolled in Parts A and B at the start of the 25th month (Center for Medicare Rights 2021f). These 2 years before Medicare starts are called the Medicare waiting period. People with Lou Gehrig’s Disease/ALS or End Stage Renal Disease do not have the same waiting period (Center for Medicare Rights 2021f). You can read about the special rules for people with these conditions here: ALS or Kidney Disease and SSDI The waiting period makes life difficult for folks not yet on Medicare. They might not have other insurance while they wait. Those in the waiting period may be able to apply for other coverage through the Affordable Care Act (Obamacare) Marketplace or pay for COBRA, a program that lets them keep their job-based insurance for a time after they can no longer work. You can read about those choices here: Waiting Period Coverage But the costs of these options may be unaffordable for someone on SSDI. Some people who have little or no income (earnings) or assets (savings, property etc.) may be able to get Medicaid during this time (put link back to my article about Medicaid). However, for people with very complex medical needs, Medicaid alone may not cover all the things they need sufficiently (Example: a wheelchair with the right type of supports, a certain doctor for a rare condition, or the right type and number of catheters) In the future, I’d like to see the waiting period eliminated. In my view, someone disabled enough to get SSDI shouldn’t have to wait two years for Medicare! In addition to meeting the definition of disabled under the law, you need to have the right number of work “quarters” to get SSDI checks. Your number of quarters depends on the age that you became disabled. You can read more about how to get SSDI and how the law defines disability here: SSDI Like those who qualify by age, those who get Medicare through SSDI will receive a package in the mail 3 months before Medicare starts (Center for Medicare Rights 2021f). SSDI recipients, as I said before, are automatically signed up for Part A and Part B. You don’t have to keep Part B but you should in most cases—we’ll talk more about that later. Also like the age-related recipients, your Part A will be premium free if you or your spouse worked 40 quarters (about 10 years). If you or your spouse worked fewer than 30 quarters, you will pay $471 per month. If you or your spouse worked 30-39 quarters, you will pay $256 a month in 2021 (Disability Secrets 2021). To keep SSDI, you need to have Part A once you are eligible. However, you can choose to opt out of Part B when you are first eligible. The Part B premium will be taken out of your benefit check automatically unless you decide you don’t want Part B (2021f). Once again… If you decide you don’t want Part B, there are directions about what to do. You can read about those directions here: What If I Don’t Want Part B? You should only decline Part B if you have other job-based insurance from you or a spouse and it is the primary payer…meaning it pays bills before Medicare. For folks who are disabled, job insurance pays first if the job has 100+ employees. Medicare pays first If your job has fewer than 100 employees. If you opt out of Part B in a situation where Medicare is the first payer, you will have a lot of costs out of pocket (Center for Medicare Rights 2021g). If your job- based insurance is the second payer, you do not get an SEP and should accept Part B as soon as you are eligible to avoid high costs. You can read more: SSDI Recipients and Part B If that job- based insurance is going to end and it is the primary payer, you have a special enrollment period to sign up for Part B without financial penalty. That SEP lasts 8 months after coverage ends (2021g). If you declined Part B when you were enrolled automatically, you have an initial enrollment period or IEP in which you can join Part B if you change your mind. Like an IEP for age-related recipients, the time period is 7 months long—the 3 months before your 25th month on SSDI, the 25th month on SSDI, and the 3 months after (United Healthcare 2021). The month you enroll within your IEP (For example: The 1st month vs. the 3rd month of IEP) will affect your Part B start date, just like those who qualify based on age. The chart would look something like this: If you enroll in Part B during the…. 25th month you receive SSDI- it starts 1 month after 1 month after the 25th month you receive SSDI- it starts 2 months after 2 months after the 25th month you receive SSDI- it starts 3 months after 2 months after the 25th month you receive SSDI- it starts 3 months after If you opt out of Part B during the IEP and decide you want it later… but don’t have a special enrollment period, you will have to wait until general enrollment (GEP) to sign up. The GEP is the time between January 1 and March 31 (Center for Medicare Rights 2021e) You will pay a financial penalty if you wait until the GEP and your coverage won’t start until July. **If you are eligible for Medicaid as well as Medicare, you should take Part B** This is the case for some low-income Medicare recipients. Why should you take Part B in this situation? Because Medicaid is always the “payer of last resort.” If you opt out of Part B and also have Medicaid, you will get a lot of bills (2021g). Medicaid may be able to help you pay Medicare premiums. Trial Work Period But… As long as the person remains medically disabled, they can keep Medicare Part A premium- free for 93 months (7 years, 9 months) after their trial work period. Added together, that is about 8 and a half years (Social Security Administration 2021b). If they have chosen to enroll in Part B, they will continue to pay premiums as usual should they want to keep it (2021b). Of course, Medicare Part A is only premium-free for those who worked at least 40 quarters (or has a spouse that has). After premium-free Part A coverage ends, a working person who remains medically disabled can purchase Part A if they want. You will get a letter about how to purchase Medicare Part A if you want it at the end of the premium- free period. You can also choose to buy Part B at this time if you want. In this situation, you cannot buy Part B unless you buy Part A (Social Security Administration 2021b). You can read more here: Working Disabled Extended Medicare Coverage Medicare for Working Disabled Medicaid or a Medicare Savings Program might be able to help you with the premiums for Medicare. What If I Don’t Want Part B? If you are not covered by a parent/guardian’s job-based insurance as a primary payer, you should take Part B. For folks who are disabled, job insurance pays first if the job has 100+ employees. Medicare pays first If your job has fewer than 100 employees. If you opt out of Part B in a situation where Medicare is the first payer, you will have a lot of costs out of pocket (Center for Medicare Rights 2021g). **If you are eligible for Medicaid as well as Medicare, you should take Part B** This is the case for some low- income Medicare recipients. Why should you take Part B in this situation? Because Medicaid is always the “payer of last resort.” If you opt out of Part B and also have Medicaid, you will get a lot of bills (2021g). Medicaid may be able to help you pay Medicare premiums. So, what exactly is a DAC benefit? A DAC benefit is an SSDI cash payment to a disabled beneficiary based on another’s work record. To qualify a person must be the “dependent” of a worker considered insured by Social Security rules. A “dependent” may be eligible for DAC if their parent or other legal guardian is/was insured by Social Security and the parent/guardian is:
- Receiving retirement benefits through Social Security
- Receiving SSDI
- Age 18 or older
- Have a disability that started before age 22
- Disabled by the same definition used by Social Security—you can read more about that here: Definition of Disability
What if I am already receiving SSI when I become eligible for DAC through my parent?If your parent is a higher earner and the DAC check you receive through them is higher than the maximum SSI benefit, your SSI benefit will be replaced by the DAC check alone and you no longer have to follow SSI rules (How to Get On blog 2021), just SSDI rules. Plus, after 2 years on DAC, you will get Medicare. This is nice because SSDI rules are more flexible than those for SSI. If your parent is a lower earner, you will have some combination of SSI & DAC benefits (2021) cash-wise, plus eventual access to Medicare. If another dependent of the retiree is also eligible for benefits on the retiree’s work record, the DAC recipient’s check may be lower because of the family maximum payment amount. If you also rely on Medicaid (and became eligible via SSI), the money from a disabled adult child benefit does not count toward Medicaid income limits and you will remain eligible for Medicaid even if the DAC check puts you over regular Medicaid limits (How to Get On Blog 2021). **However, income from work or other sources will affect Medicaid** If you require both Medicaid & Medicare, keep this in mind (2021). If you are eligible for Medicaid through another route besides SSI such as Medicaid Buy In, your income rules may be more flexible. You can read an excellent article about this here: How to Get On
What if a DAC recipient wants to try working? Can they keep Medicare?The rules that apply to other SSDI recipients apply. Yes. The cash benefit of the SSDI check will eventually end if you are working substantially after a 9 -month trial work period (TWP). You can read about that here: Trial Work Period As long as the person remains medically disabled, they can keep Medicare Part A premium- free for 93 months (7 years, 9 months) after their trial work period. Added together, that is about 8 and a half years (Social Security Administration 2021b). If they have chosen to enroll in Part B, they will continue to pay premiums as usual should they want to keep it (2021b). Of course, Medicare Part A is only premium-free for those who worked at least 40 quarters (or in this case, the parent has). After premium-free Part A coverage ends, a working person who remains medically disabled can purchase Part A if they want. You will get a letter about how to purchase Medicare Part A if you want it at the end of the premium- free period. You can also choose to buy Part B at this time if you want. In this situation, you cannot buy Part B unless you buy Part A (Social Security Administration 2021b). You can read more here: Working Disabled Extended Medicare Coverage Medicare for Working Disabled Medicaid or a Medicare Savings Program might be able to help you with the premiums for Medicare.
What’s the scoop on Medicare and long-term care?Oh, poop. Most people don’t realize Medicare doesn’t cover much long-term care. Medicare covers VERY limited nursing home services—and only if the stay is related to a recent hospitalization (Elder Law 2020). Limited home care tasks are covered if you are homebound (ex: bandage changes) But ongoing personal care/ assistance with activities of daily living is not covered by Medicare. Only Medicaid covers ongoing home care and nursing care. *balloon deflates* You can read more here: Limited Nursing Home Stays Medicare Limited Home Care This makes it really hard for people who need personal care because money limits are really strict.
What other costs are part of Medicare?Even if your Part A is “premium free,” there are other costs to consider. Medicare as a whole is not a free program.
Medicare Terms to Know:A deductible is the amount you pay yourself before insurance starts to pay for your care (Healthcare.gov 2021) A premium is the amount you pay each month for your health insurance (2021). A copay is a fixed dollar amount you pay for covered care after you have reached your deductible. For example, a person may pay $50 per medical visit after the deductible (2021) Coinsurance is the percentage of costs you have to pay out of pocket after reaching the deductible. For example, if you owe $100 and have a 20% copay, you have to pay $20 (2021). Part A For most folks (those who have worked 40 quarters or 10 years), Part A has no monthly premium (Medicare 2021d). Part A refers to inpatient hospital care and limited home health/nursing facility care. For those who pay for Part A, the premium is $471/month if you (or your spouse) worked less than 30 quarters. For people with more than 30 quarters, it is $259 monthly (2021d). Part A also has a deductible, an out of pocket amount that you owe for inpatient hospital care before Medicare kicks in. After you reach the deductible, there may or may not be a coinsurance payment depending on how long your stay is (2021d). You can check out detailed Part A costs here: Part A costs Part B Part B refers to outpatient costs such as doctor’s visits. You may remember that everyone pays a Part B premium if they want that coverage. A “standard” premium is around $148.50 monthly this year for those on Original Medicare. It may be more if you have higher income. Before Part B will pay for your care, you will have to spend $203 out of pocket (deductible). After you reach the deductible, you typically pay 20% coinsurance in covered costs (Medicare 2021d). You can read more detailed information here: Part B costs Part C (Medicare Advantage) Part C is not so much a “part” of Medicare, but instead a way of coordinating services. It is optional and serves those who don’t want to use Original Medicare (Center for Medicare Rights 2021). From earlier in our discussion: Original Medicare is the traditional way to receive benefits. The government pays a provider directly for services in Parts A and B (Center for Medicare Rights 2021). Most Americans use Original Medicare and most providers accept it. The other choice is to package benefits together with a Medicare Advantage Plan (MA) which is also called Part C. You can think of an MA plan (Part C) as a way to combine the parts of Medicare into one plan (Bunis 2020). Those in an advantage plan still receive the services in Part A & Part B, but may be offered additional services not covered by regular Medicare such as dental benefits (Center for Medicare Rights 2021). Some Part C plans have drug coverage included. If not, you can buy a separate prescription drug plan, also called Part D. If your Part C covers prescriptions, you cannot also buy a Part D plan (EHealth 2021). Every Part C plan is different and if you want one, look at:
- Participating providers
- Coverage rules
- Cost sharing rules
- Additional premiums
But wait… there’s one more player in the game. Meet Medigap!As you may imagine, Medicare costs can get expensive! Medigap plans are supplementary (extra) insurance plans sold privately to help you cover costs not covered by Original Medicare (Example: deductible, coinsurance). In 2021, there are about 10 Medigap plans, labeled by letters. What is available may vary based on where you live (Center for Medicare Rights 2021h). **You cannot buy a Medigap plan if you have Part C (Medicare Advantage)** You can read more about Medigap and how to choose a plan here: Medigap It is a personal choice between Medigap and Medicare Advantage. When comparing the two, here are things to think about:
Medigap (Supplement) and Medicare Advantage PlansMedigap or Supplement
- Medigap plans are available, labeled A-N, federally standardized across companies
- Medigap is used in conjunction with “original Medicaid” to help pay for things Medicare does not such as deductibles/copays “fill the gap”
- If you want to buy Medigap plan, you should get it when you are younger/healthier to avoid rising costs or denial of coverage.
- People like predictability of Medigap
- Low or sometimes zero premiums
- Often cover A, B, and have drug plans.
- Sometimes called Part C
- However, limited network of providers
- Providers can drop out midyear (Siegel Bernard 2014)
- Medigap supplements Original Medicare costs, while advantage plans are ways to get Medicare benefits
- People who travel are better off with a supplement- greater provider choice (2014).
Kathleen Downes (she/her/hers) is a licensed social worker and activist for disability justice from Floral Park, New York. She was born with cerebral palsy and enjoys doing advocacy work for people with all types of disabilities. She volunteers to create educational programs for families of disabled youth through a small non-profit in the New York area.A two time graduate of the University of Illinois at Urbana-Champaign, she holds a master’s in social work and a bachelor’s in community health and rehabilitation studies.She is particularly passionate about long term care policy and strengthening the Medicaid program.Kathleen blogs at The Squeaky Wheelchair and has been featured in The Huffington Post and in the online publication of the Women’s Media Center.In her free time she enjoys reading, writing, spending time with her dog, taking seated dance classes, and learning new things.