Medicare FAQs
1 – About Medicare & Enrollment
What Medicare Is
Medicare is the federal health insurance program for people 65 and older, as well as those under 65 who have been on SSDI for 2 years. It has several parts, each covering different types of care.
Part A vs. Part B
Part A covers inpatient hospital care, skilled nursing facility care, some home health, and hospice. Part B covers all outpatient services, doctor visits, preventive care, and durable medical equipment. Together, A and B are called “Original Medicare” and cover roughly 80% of Medicare approved costs — leaving the remaining 20% to the beneficiary to protect and cover with a supplemental plan from either their job or a choice based on current and future health and budget.
When to Sign Up
Enrollment depends on several factors: whether the person is receiving Social Security, whether they have employer coverage, the number of employee at the company that is providing the coverage, and whether they contribute or want to continue to contribute to an HSA. The 2 important enrollment periods to understand is the Initial Enrollment and Special Enrollment Periods. Each with different rules and vary by individual personal and family situations. Missing certain windows can result in late-enrollment penalties.
Automatic Enrollment
People who are already collecting Social Security benefits before age 65 are typically enrolled in both Part A and Part B automatically, but Part B can be rejected based on individual situations and conversations with a knowledge Medicare agent. If collection any type of SS benefits a Medicare card will be issued before their 65th birthday. In this case, if one does not opt out of Part B, premiums for Part B are deducted directly from the Social Security payment. .
2 – Part A Only Enrollment
Why Some People Enroll in Part A Only at 65
Some people enroll in Part A alone when they turn 65 while continuing to work. The two main reasons are: (1) peace of mind — they are in the Medicare system and have a Medicare number — and (2) faster transitions later to Part B, since having a Medicare number already in place will shorten the time needed to activate Part B and add a supplemental plan when retirement comes. But be careful in applying for Part A if one has an HSA.
How It Affects HSA Contributions
Enrolling in Part A, even voluntarily, stops the ability to contribute to a Health Savings Account (HSA). This is an important consideration for people who are still actively contributing to an HSA and wish to continue doing so.
Part A and the Medicare Card
When a person enrolls in only Part A, they receive a card reflecting that coverage. The Medicare number on that card will be the same number when Part B is added at a later date, which helps avoid delays and the timing based of the loss of employment.
3 – Retirement Transitions
Why Timing Matters
The transition from employer coverage after age 65 (coverage through a company of greater than 20 employees) to Medicare involves a specific special enrollment window that can be activated any time of year. Acting in a timely manner is critical to avoid creating coverage gaps to prevent any late-enrollment penalties on Part B or Part D. The right timing depends on factors like retirement date, the size of the employer, spousal coverage, and HSA status which should be discussed with an objective and independent Medicare agent.
Employer Coverage and Medicare
Whether Medicare or the employer plan is primary depends largely on whether the employer has 20 or more employees. For employers with 20+ employees, the employer plan is generally primary and Medicare secondary — meaning a person can delay Part B without penalty. For employers with fewer than 20 employees, Medicare is typically primary. In this case getting Part B at age 65 is very important so one is not responsible for the 80% that Medicare would have been covering.
Dependents on Employer Plans
When a person retires, spouses and children covered under their employer plan are affected as well. This is one of the factors that shapes the timing of Medicare enrollment decisions.
4 – Health Savings Accounts (HSA)
HSA and Medicare
An HSA is a tax-advantaged account that can only be funded while the account holder is enrolled in a qualifying high-deductible health plan and not enrolled in Medicare Part A or Part B. Enrolling in any part of Medicare — including Part A — ends the ability to make new contributions. Funds already in the account can still be used for qualifying medical expenses.
The Common Misconception
Many people are told “just take Part A at 65” without being advised that doing so stops the ability to make HSA contributions legally. This is a significant consideration that depends entirely on the individual’s financial situation and retirement timeline.
5 – Medicare Supplement (Medigap) Plans
What Medigap Does
A Medigap plan (not a High Ded Medigap plan) is private insurance that helps cover costs Original Medicare doesn’t pay — primarily the 20% coinsurance with a small yearly deductible. Medigap plans are standardized by letter (e.g., Plan G, Plan N) and covers the same benefits regardless of which insurance company sells them. The difference between carriers is the cost per month for the premium. A High Deductible plan is a plan where the enrollees covers the 20% co-insurance up to a yearly limit of ~$3,000.
Medigap and Doctor Access
Medigap plans generally allow access to any doctor or hospital that accepts Medicare — which is most providers nationwide. This broad network is one of the reasons people like the Medigap model over Medicare Advantage, particularly those who want full access to all doctors they may want to utilize.
Part D Requirement
Medigap plans do not include prescription drug coverage. Anyone who chooses a Medigap plan also needs a separate Part D Prescription Drug Plan to have drug coverage. For Med Adv plans Part D coverage is included in the insurance carrier offering available for most of these plans nationally.
Common Plan Options (General Education Only)
Plan G does not cover the Part B deductible but does cover the other cost-sharing costs after Medicare pays, with no office visit copay. Plan N is similar in that one is required to pay the Part B deductible but includes a small office visit copay. High Deductible Plan G has a lower monthly premium but requires the beneficiary to pay a 20% co-insurance before the plan pay the rest of Medicare approved charges. Specific premiums and availability vary by state, age, and carrier.
6 – Medicare Advantage Plans
What Medicare Advantage Is
Medicare Advantage (Part C) is an alternative to Original Medicare offered by private insurance companies. These plans must cover what Original Medicare covers and often include limited extras like dental and eye glass coverage. Most plans offer prescription drug coverage as part of the package offered. They typically use provider networks, (either HMO or PPO) which can restrict doctors and hospitals you can access.
How Advantage Plans Differ From Medigap
Unlike Medigap, Medicare Advantage plans often have low or zero monthly premiums but involve cost-sharing (copays, coinsurance) when care is used. Provider networks vary by plan and geography. Coverage outside the network may be limited or unavailable depending on the plan type of either a HMO or PPO or HMO-POS.
Doctor and Prescription Considerations
Whether a specific doctor or prescription is covered at the same cost or a higher cost depends entirely on the specific Advantage plan. This is why taking the time to compare plans requires specific information to be shared on the individual doctors and medications for each enrollee— information that a independent, objective and licensed Medicare agent would reviews when helping someone choose annually.
7 – Prescription Drug Coverage (Part D)
What Part D Covers
Part D is the Medicare prescription drug benefit, offered through private plans approved by Medicare. Each plan has a formulary — a list of covered drugs organized by tiers — that determines what the plan will pay and what the enrollee owes. Formularies change year to year. If one does not have a Part D plan and enrolls at a later date there is a penalty that the government accesses the individuals.
Why Annual Review Matters
A plan that covers a person’s medications well in one year may not be the best option the following year due to formulary changes, premium changes, or changes in the person’s medications. This is why an annual review of drug coverage needs to be standard practice for every Medicare beneficiary.
Part D and Medigap
Anyone with a Medigap plan also needs a standalone Part D plan for drug coverage. Part D is included in most Medicare Advantage plans. If one does not have a Part D plan and enrolls at a later date there is a penalty that the government accesses the individuals.
8 – Travel & Out-of-State Coverage
How Coverage Works When Traveling
Original Medicare (Parts A and B) generally covers emergency care anywhere in the United States, as well as care from any provider who accepts Medicare. Medigap plans typically follow the same broad geographic coverage. Medicare Advantage plans are network-based, which can affect coverage when a person is outside their plan’s service area — generally only emergency care is covered in those cases.
9 – COBRA Coverage
What COBRA is
COBRA allows people who lose employer-sponsored health coverage to continue that same coverage temporarily, generally for up to 18 months for the employee and up to 6 months for the spouse and children. The individual typically pays the full premium — both the employee and employer share — plus an administrative fee.
COBRA and Medicare — The General Principle
Medicare and COBRA interact in ways that depend heavily on individual circumstances, particularly whether the person is retired and whether they are 65 or older. The coordination of which coverage pays first has significant implications for how claims are processed. This is an area where incorrect assumptions can result in substantial out-of-pocket costs. Seeks objective advice in situations involving Cobra.
Why This Requires an Agent Conversation
The rules around COBRA and Medicare are among the most commonly misunderstood in the Medicare space and carry some financial risk if handled incorrectly. This agent does not walk callers through their specific COBRA situation. A licensed agent at Emerald Medicare is the right resource for this conversation.