People may be unaware that the government healthcare agency CMS (Center for Medicare & Medicaid Services) outlines specific guidelines that brokers must abide by. They instated these rules to protect beneficiaries from brokers that offer potentially fraudulent services or bad practices.
For example, many wonder, “What is Medicare Scope of Appointment?” The scope of appointment is documentation that a beneficiary has agreed to meet with an agent to discuss a specific plan, such as a Medicare Advantage or Part D plan. During this meeting, the agent can only discuss the plan specified in the scope of appointment and no other plans.
If you’re working with an agent and they don’t require you to sign a scope of appointment first, you may not want to work with them since they’re not following Medicare’s guidelines.
CMS also has other guidelines, such as prohibiting agents from approaching people unsolicited by door-to-door or supermarket sales. Staying informed on what rules agents are supposed to follow can help you avoid working with an agent.
Medicare eligibility is not the same as Social Security eligibility
Many people believe their Medicare eligibility is the same as or reliant on their Social Security (SS) eligibility, but that is not the case. Although Medicare and SS are related in some ways, their eligibility requirements differ.
Generally, to be eligible for Medicare, someone must be 65 or older and a U.S. citizen, with a few differences for people under 65 or who immigrated. However, work history is not a factor.
On the other hand, SS eligibility depends on someone’s work history and whether they are 62 or older. People may also qualify for SS benefits based on someone’s family work history, even if they do not have work credits.
It’s important to know that these programs have different eligibility requirements, as it will affect your enrollment process for both.
There are four parts to the Medicare program
Understanding the differences between the parts of Medicare is a good starting point for learning about the healthcare program. The four parts include Medicare Part A, Part B, Part C, and Part D, each covering different aspects of your medical care.
For example, Part A covers inpatient hospital stays, while Part B covers outpatient care. Part C is another name for the Medicare Advantage plan program, and Part D covers your retail prescription medications.
Understanding these parts will help you prepare for using Medicare coverage and making additional plan decisions.
Medicare is not cost-free
A common misconception among beneficiaries is assuming that Medicare is free. The truth is that Medicare is not free and comes with monthly premiums, deductibles, and cost-sharing. You may find adjusting to the costs difficult if you’re not prepared.
Many people think Medicare is free because they have paid FICA (Federal Insurance Contributions Act) taxes through their paychecks for years. These taxes do contribute to SS and Medicare costs, but they do not cover all your Medicare expenses.
The FICA taxes only go toward Medicare Part A. So, although Medicare Part A is $0 monthly for most people, the other parts of Medicare still need to be paid for by beneficiaries.
Medicare has different enrollment period
One of Medicare’s most important things to understand is its enrollment period. You must know and understand the different periods to avoid missing important dates. If you do miss these timeframes, it can lead to late enrollment penalties.
One example is your 7-month Initial Enrollment Period (IEP). Your IEP begins three months before your 65th birthday month and ends three months after. If you do not sign up for Medicare during this time, you may have to pay more for your coverage if you enroll later. However, delaying Medicare enrollment past this period is possible if you have other creditable health coverage.
Your IEP is just one of many enrollment periods, including the Annual Election Period, Special Enrollment periods, and more, all with specific purposes. Be sure to do your research ahead of time to prepare.
Medicare comes with coverage gaps
Part A and Part B do not cover all of your healthcare expenses. Because of this, you’ll want to enroll in additional Medicare plans to ensure proper coverage. You will have two options to help cover costs, which work differently.
The first option is to enroll in a Medicare Supplement (Medigap) plan and a Part D plan. Medigap plans help cover cost-sharing leftover after Medicare Part A and Part B, including copays, coinsurance, and deductibles. However, Part A, Part B, and Medigap plans do not cover prescription medications you receive from a pharmacy; Part D plans do. This is why you’d want a Medigap and a Part D plan.
Your second option is to enroll in an Advantage plan. Advantage plans work very differently from a Medigap plan. If you sign up for an Advantage plan, you will receive all your health insurance benefits through that plan instead of Part A and Part B. Because of this, your cost-sharing will look different according to your specific plan. Most Advantage plans include built-in Part D coverage as well, so you would not need to enroll in a separate Part D plan like you would with a Medigap plan.
It’s important to review your coverage annually
Something to keep in mind is that Advantage and Part D plans can change their benefits each year. Staying up to date on these changes is important in case the plan no longer fits your health needs. For example, Part D plans can make changes to their list of covered medications, also known as their drug formulary.
Fortunately, your plan will send out an Annual Notice of Change (ANOC) packet each year sometime in September. This packet goes over any upcoming changes for the new year. If the new changes don’t work for you, you have the Annual Election Period from October 15th to December 7th to switch to a new plan.
Summary
Medicare can be overwhelming initially, so the best place to start is with the basics, like regulations, parts of the program, eligibility, when to enroll, and what costs to expect. Once you’ve got those basics down, you can learn about your supplemental plan options and how to manage your coverage over time.
In doing so, you’ll set yourself up for success with less stress and pressure.
