Find out how to choose the right Medicare plan for your needs and budget.
I’m licensed insurance agent Patrick Jean- Louis, dedicated to helping seniors navigate the maze of insurance options.
Medicare is our country’s health insurance program. Although most commonly used by people age 65 or older, some younger people are eligible for Medicare, too. Those include people with disabilities, permanent kidney failure and amyotrophic lateral sclerosis (Lou Gehrig’s disease). Medicare helps with the cost of health care, but it does not cover all medical expenses or the cost of most long-term care. Medicare has four parts:
- Part A—Hospital insurance;
- Part B—Medical insurance;
- Part C—Medicare Advantage; and
- Part D—Prescription drug coverage.
The Medicare program has four parts:
Part A (hospital insurance): Hospital insurance helps pay for inpatient care in a hospital or skilled nursing facility (following a hospital stay), some home health care and hospice care.
The other three parts of Medicare require premium payments, and if you don’t enroll when you’re first eligible, you may have to pay a late enrollment penalty for as long as you have coverage. Also, you may have to wait to enroll, which will delay coverage.
Part B (medical insurance): Medical insurance helps pay for doctors’ services and many other medical services and supplies that hospital insurance does not cover.
Part C (Medicare Advantage plans): If you have Medicare Parts A and B, you can join a Medicare Advantage plan. Medicare Advantage plans are offered by private companies and approved by Medicare. These plans generally help you pay the medical costs not covered by Medicare Part A and B.
Part D (prescription drug coverage): Prescription drug coverage helps pay for medications doctors prescribe for treatment.
The standard Medicare Part B premium for medical insurance in 2021 is $170.10
Some people who collect Social Security benefits and have their Part B premiums deducted from their payment will pay less. This is because their Part B premium increased more than the cost-of-living increase for 2021 Social Security benefits. Social Security will send a letter to all people who collect Social Security benefits (and those who pay higher premiums because of their income) that states each person’s exact Part B premium amount for 2021.
Since 2007, higher-income beneficiaries have paid a larger percentage of their Medicare Part B premium than most. Depending on their income, these higher-income beneficiaries will pay premiums that amount to 35, 50, 65, or 80 percent of the total cost of coverage.
If you already get Social Security benefits, we’ll automatically enroll you in Medicare Hospital Insurance (Part A) and Medical Insurance (Part B). We’ll mail you all the information you need a few months before you become eligible.
Note: Residents of Puerto Rico or foreign countries won’t automatically receive Part B. They must elect this benefit.
If you don’t get Social Security benefits and are not ready to apply for them yet, you should sign up for Medicare three months before your 65th birthday.
Important Information about Medical Insurance (Part B) Coverage
Because you must pay a premium for Part B coverage, you can turn it down. However, if you decide to sign up for Part B later, your coverage can be delayed and you may have to pay a late enrollment penalty for as long as you have Part B coverage. Your monthly premium will go up 10% for each 12-month period you were eligible for Part B, but didn’t sign up for it unless you qualify for a special enrollment period.
In most cases, if you don’t sign up for Medicare when you’re first eligible, you may have to pay a higher monthly premium.
Part A late enrollment penalty
Some people have to buy Part A because they don’t qualify for premium-free Part A. If you have to buy Part A, and you don’t buy it when you’re first eligible for Medicare, your monthly premium may go up 10%. You’ll have to pay the higher premium for twice the number of years you didn’t sign up.
Example: If you were eligible for Part A for 2 years but didn’t sign up, you’ll have to pay the higher premium for 4 years. Usually, you don’t have to pay a penalty if you meet certain conditions that allow you to sign up for Part A during a special enrollment period.
Part B late enrollment penalty
If you don’t get Part B when you’re first eligible, your monthly premium may go up 10% for each 12-month period you could’ve had Part B, but didn’t sign up. In most cases, you’ll have to pay this penalty each time you pay your premiums, for as long as you have Part B. And, the penalty increases the longer you go without Part B coverage.
Usually, you don’t pay a late enrollment penalty if you meet certain conditions that allow you to sign up for Part B during a Special Enrollment Period. Read more about different situations that may affect when you decide to get Part B.
If you have limited income and resources, your state may help you pay for Part A, and/or Part B. You may also qualify for Extra Help to pay for your Medicare prescription drug coverage.
Part D late enrollment penalty
The late enrollment penalty is an amount that’s permanently added to your Medicare drug coverage (Part D) premium. You may owe a late enrollment penalty if at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don’t have Medicare drug coverage or other creditable prescription drug coverage. You’ll generally have to pay the penalty for as long as you have Medicare drug coverage.
How much is the Part D penalty?
The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.
Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($33.06 in 2021) times the number of full, uncovered months you didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $0.10 and added to your monthly Part D premium.
The national base beneficiary premium may change each year, so your penalty amount may also change each year.
Example: Mrs. Martinez is currently eligible for Medicare, and her Initial Enrollment Period ended on May 31, 2017. She doesn’t have prescription drug coverage from any other source. She didn’t join by May 31, 2017, and instead joined during the Open Enrollment Period that ended December 7, 2019. Her drug coverage was effective January 1, 2020.
2021
Since Mrs. Martinez was without creditable prescription drug coverage from June 2017–December 2019, her penalty in 2021 was 31% (1% for each of the 31 months she didn’t have coverage) of $33.06 (the national base beneficiary premium for 2021), or $10.25 each month. Since the monthly penalty is always rounded to the nearest $0.10, she pays $10.30 each month in addition to her plan’s monthly premium.
Here’s the math:
.31 (31% penalty) × $33.06 (2021 base beneficiary premium) = $10.25
$10.25 rounded to the nearest $0.10 = $10.30
$10.30 = Mrs. Martinez’s monthly late enrollment penalty for 2021
As a licensed professional in the Medicare market I have been helping our seniors find the right Medicare plan for nearly 15 years. Helping our seniors maneuver through the maze of insurance plan options is what I do best. It is what I take pride in and to know that I am continuing my legacy of helping people is the fuel to the engine which drives me and my company. Licensed in Florida.
T.R.W. Core Values
We’ll soothe your worry by finding the perfect solution for the gap in your Medicare coverage.
We are contracted to different carriers and as independent agents we only work to help you find the best plan for you. Having a multitude of carriers to choose from means that we won’t push you to go with one specific carrier like many agents do. Having a trusted and unbiased option on Medicare Advantage carriers can ultimately save you hundreds of dollars per year!
Let’s find your solution to expensive deductibles and outpatient coverage and lower your monthly premium.
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