GETTING STARTED WITH MEDICARE
You may think choosing your plan is the end of your Medicare-related paperwork. However, there are still a few more steps you’ll need to take before you can start receiving benefits.
Understanding Your Medicare Cards
Once you enroll in any type of Medicare plan, the government sends you a card. It’s red, white, and blue and specifies if you’re enrolled in Part A, Part B, or both. You’ll receive this card no matter which type of coverage you choose—Original Medicare or Medicare Advantage. However, suppose you’ve enrolled in any kind of private insurance plan, such as Medicare Advantage, Medigap or Part D. In that case, you’ll receive an additional card from that plan’s company.
If you’re on Original Medicare, you’ll show your Medicare card when paying for care (as well as your Medigap card, if you have one). If you enrolled in Part D, the company that issues you Part D coverage would send you yet another card, which you’ll need to show when you go to the pharmacy.
If you have Medicare Advantage, you’ll show your MA plan’s card for any care or when filling your prescriptions if your plan includes drug coverage. Keep your government-issued Medicare card handy as well, just in case a provider asks to see it.
Online First Steps
- Authorization Forms You are the only person who can legally get your personal health information from Medicare. Suppose you want someone else, like a family member, to be able to speak to Medicare on your behalf. In that case, you need to fill out an authorization form, available on the government’s website (medicare.gov).
- Sign Up Online The government provides 24-hour access to your claims, eligibility, information, deductible status, and lots of other helpful information online through mymedicare.gov. The service makes keeping track of your healthcare record very convenient—but only if you take the time to sign up for an account.
- Understanding What’s Covered The government’s website also provides thorough lists and explanations of what Medicare covers and what it doesn’t. The tool can also help you anticipate the cost of services you may need in the future.
Wellness Visits
During your first 12 months on Medicare, you definitely should take advantage of the initial “Welcome to Medicare” preventive visit. This visit is free, and your Part B deductible doesn’t apply. It’s essentially a checkup during which the doctor will perform some basic examinations to get a picture of your overall health. You’re also entitled to an annual wellness visit. During this, your doctor can recommend specific steps you can take to stay healthy.
Help with Premiums
Medicare is supposed to keep health care affordable for beneficiaries. But if you’re on a fixed income, monthly premiums can be a burden; you’re paying for care that you’re not using. Luckily, you have options if you need help covering your premiums. Most vary by state, so make sure to research the programs available in your area.
Medicare Advantage
You’ll always pay a premium for Part B, but some MA plans may offer various of premiums. MA plan may offer a better option for keeping your monthly payments low, depending on your income. Just keep in mind that with various premium plans may come with a particularly high deductible.
Medicaid
More than 20 percent of Medicare beneficiaries are also on Medicaid. Medicaid is the program that provides health insurance to low-income people. Each state sets its own guidelines, so you’ll need to check with your local social services office to determine if you are eligible. Those eligible for both Medicare and Medicaid are known as “dual eligible.” When you enroll in both Medicare and Medicaid, Medicare is your primary insurer—meaning that it pays its share first. Medicaid then pays for additional costs (such as your coinsurance and deductible). It’s also worth noting that Medicaid also covers certain services Medicare does not, such as personal care and long-term care services.
Medicare Savings Programs
More dual-eligible patients will be automatically enrolled in a Medicare Savings Program (MSP). These are four types of MSPs. Each has a different income limit for qualifications and different benefits. The income limits apply nationwide—they don’t vary by state. The four different types are:
Qualified Medicare Beneficiary (QMB, often pronounced “Quimby”) This MSP pays your premiums for Parts A and B. Generally, if you have OMB, you won’t be billed for services covered by Medicare as long as your provider participates in the program.
Specified Low-Income Medicare Beneficiary (SLMB) This MSP only pays Part B premiums.
Qualifying Individual (QI) Program This MSP also only pays for your Part B premium. It has a higher income and resource limit than the SLMB, so it’s a little easier to qualify for.
Qualified Disabled and Working Individuals (QDWI) This MSP pays for Part A premium for disabled individuals returning to work and are no longer entitled to premium-free Part A.
MSPs have other benefits in addition to covering your premium. Enrollment in an MSP also qualifies you for full Extra Help—which supplements your Part D drug coverage. An MSP will also cover any penalties you owe for delaying enrollment in Part B.
Extra Help
Extra Help is a program administered by the Social Security Administration (not Medicare) that provides assistance paying for prescriptions. You can apply for Extra Help even if you don’t already have drug coverage. If you’re approved, you’ll need to enroll in a Part D plan, and your Extra Help benefits will be applied to that plan. Extra Help has five different levels, which offer varying amounts of assistance based upon your income level and assets. Suppose you qualify for full Extra Help (level one of the four available). In that case, you’ll have zero out-of-pocket expenses for medications. With partial Extra Help, you’ll still have some out-of-pocket costs, but they’ll be much lower than they would be otherwise. Another benefit: No matter what level of Extra Help you qualify for, you won’t have to worry about falling into the donut hole.
MEDICARE AND HSA
Your HSA Helps to Pay Medical Expenses
Getting Medicare coverage doesn’t mean saying goodby to all healthcare costs. The money that has been piling up in your health savings account (HSA) can go a long way toward paying for health services Medicare doesn’t cover. As well as copayments, coinsurance, and deductibles. You can even use funds from your HSA to pay premiums for Part A, Part B, Part D, and Medicare Advantage plans. The only premiums you can’t pay tax-free are Medigap premiums.
How HSAs Work
HSAs are specialized savings accounts designed to offer a tax-free way to cover out-of-pocket medical expenses. As with a 401(k) or traditional IRA, contributions are made pre-tax (or are tax-deductible if made outside of payroll deductions), then grow tax-free. But unlike those other plans, with an HSA, you can always make tax-free withdrawals to pay for qualified medical expenses such as doctor’s office visit copays, prescription drugs, and dental visits-even eyeglasses and medical travel. In fact, your HSA account typically comes with a debit card you can use to pay those bills.
You can use HSA funds to pay for current medical costs, which are effectively discounted since every dollar spent hasn’t been reduced by taxes. Suppose you accumulate those savings over the years in a diverse portfolio. In that case, you’ll have a great way to offset some of your medical expenses in retirement.
No More HSA Contributions
To be eligible to contribute to an HSA, you have to have a high-deductible insurance plan. These plans carry much higher out-of-pocket costs than most plans, often more than the annual HSA contribution limit. On the other hand, they typically have smaller monthly premiums.
Medicare doesn’t count as a high-deductible insurance plan. That means you won’t be able to make any more contributions to your HSA once you’re covered by Medicare. Keep this fact in mind as you approach retirement age—it may make sense to max out your contributions while you’re still working to make sure you add as much as possible to your account while you still can.
What Happens If You’ve Saved More Than You Can Spend?
Once you turn 65, you can withdraw your HSA savings for any reason—you’ll just end up having to pay taxes on withdrawals that don’t pay for health-care-related expenses. However, withdrawals for health expenses continue to be tax-free. If you wind up with more in your HSA than you can spend on health-care-related costs, you can simply make withdrawals and pay the related taxes. You can even assign the account to a beneficiary and pass it along as an inheritance.