How To Enroll In Medicare? An Insight Into The Important Process

One cannot deny the importance of Medicare as it has become an important part of the well-being of individuals across the United States. This has been one of the bright distinguishing features of the USA from many of other world powers such as China, Russia and India.

Medicare is a health-care programme for persons aged 65 and up. Three months before you turn 65, you are eligible to enrol in Medicare. If you have a handicap, End-Stage Renal Disease (ESRD), or ALS (commonly known as Lou Gehrig’s disease), you may be eligible for Medicare sooner. Medicare provides a variety of health-care coverage options.

The programme assists with health-care costs, although it does not cover all medical bills or most long-term care costs. You can receive Medicare coverage in a variety of ways. You can purchase a Medicare Supplement Insurance (Medigap) policy from a private insurance company if you choose to have Original Medicare (Part A and Part B) coverage.

The federal agency in charge of Medicare is the Centers for Medicare & Medicaid Services (CMS). Part of the program’s funding comes from your Social Security and Medicare taxes, as well as premiums paid by Medicare beneficiaries and the federal budget.

You can choose to get your Medicare benefits from Original Medicare, the traditional fee-for-service programme offered directly by the federal government, or from a Medicare Advantage Plan, a type of private insurance offered by companies that contract with Medicare, once you’ve become Medicare-eligible and enrolled (the federal government).

Original Medicare covers Part A (hospital and inpatient coverage) Outpatient/medical coverage is included under Part B.

This implies you’ll still have to pay a monthly Part B payment (and your Part A premium, if you have one).

Each Medicare Advantage Plan is required to provide all Part A and Part B treatments provided by Original Medicare, but each has its own set of rules, prices, and limits that might alter how and when you receive care.

It is critical to be aware of your Medicare coverage options and to carefully select your plan. The way you get your benefits and from whom you get them might have an impact on your out-of-pocket payments and where you can seek care. For example, Original Medicare covers you to visit practically all doctors and hospitals in the United States.

What is Medicare?

Medicare is a United States national health insurance programme that was established in 1965 by the Social Security Administration (SSA) and is now administered by the Centers for Medicare and Medicaid Services (CMS).

Who is covered by Medicare in the US?

It mostly covers Americans aged 65 and above, although it also covers some younger persons with disabilities as established by the Social Security Administration, such as those with end-stage renal illness and amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease).

2019 Medicare Trustees Report

According to the 2019 Medicare Trustees Report, Medicare provided health insurance to over 59.9 million people in 2018, including more than 52 million seniors and over 8 million younger people.

Medicare covers nearly half of individuals enrolled in healthcare spending, according to annual Medicare Trustees reports and study by the government’s MedPAC committee.

Most enrollees cover the remaining costs by purchasing supplementary commercial insurance and/or enrolling in a public Medicare Part C or Part D health plan.

The US federal government will spend $776.2 billion on Medicare in 2020.

Other healthcare-related costs to beneficiaries

Beneficiaries face other healthcare-related costs regardless of which of those two options they choose—or if they choose to do nothing extra (about 1% according to yearly Medicare Trustees reports over time).

Deductibles and copays; the costs of uncovered services—such as long-term custodial, dental, hearing, and vision care; the cost of annual physical exams (for those not on Part C health plans that include physicals); and the costs associated with basic Medicare’s lifetime and per-incident limits are all examples of additional so-called out of pocket (OOP) costs.

Types of Medicare coverage and related funding

Medicare is funded through a combination of a particular payroll tax, beneficiary premiums and surtaxes, co-pays and deductibles, as well as general Treasury revenue. A, B, C, and D are the four parts of Medicare.

Medicare Part A

Part A includes inpatient (officially admitted only) hospital, skilled nursing (only after being formally admitted to a hospital for three days and not for custodial care), and hospice services.

Medicare Part B

Outpatient services, including some providers’ services while inpatient at a hospital, outpatient hospital expenses, most provider office visits even if the office is “in a hospital,” and most professionally administered prescription medications, are covered by Part B.

Medicare Part C and D

Part C, also known as Managed Medicare or Medicare Advantage, allows patients to choose from a variety of health plans that include at least the same service coverage as Parts A and B (and often more), often the benefits of Part D, and always an annual out-of-pocket expense limit that Parts A and B lack.

Before enrolling in Part C, a beneficiary must first enrol in Parts A and B. Part D mostly covers self-administered prescription medications.

Administration of Medicare

Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), the Clinical Laboratory Improvement Amendments (CLIA), and parts of the Affordable Care Act (ACA) are all administered by the Centers for Medicare and Medicaid Services (CMS), which is part of the US Department of Health and Human Services (HHS) (“Obamacare”).

CMS’s role in Medicare provision

The CMS also administers the insurance reform requirements of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and most aspects of the Patient Protection and Affordable Care Act of 2010 as modified, in collaboration with the Departments of Labor and Treasury.

SSA and the assessment of Medicare eligibility

The Social Security Administration (SSA) is in charge of assessing Medicare eligibility, determining eligibility for and paying Extra Help/Low Income Subsidy payments relating to Medicare Parts C and D, and collecting the majority of Medicare premium payments.

To help the Medicare Board of Trustees in analysing the program’s financial health, the CMS Chief Actuary must give accounting information and cost predictions. By law, the Trustees must publish annual reports on the financial status of the Medicare Trust Funds, which must include a statement of actuarial opinion from the Chief Actuary.

Contracted services

Since the beginning of the Medicare programme, the CMS (the responsible bureaucracy’s name has changed) has contracted with private insurance companies to function as mediators between the government and medical providers in the administration of Part A and Part B benefits.

Claims and payment processing, call centre services, clinician enrollment, and fraud investigation are all contracted services.

These Part A and B administrators (whose contracts are bid out on a regular basis), as well as other insurance firms and other corporations or organisations (such as integrated health), began bidding on these contracts in 1997 and 2005, respectively.

What Medicare doesn’t pay for?

It’s also crucial to remember that Medicare doesn’t pay for either self-administered or professionally supplied medications. The Part D Trust Fund assists beneficiaries in purchasing medication insurance under Part D. The trust funds reimburse the professional who administers the drugs and allow a markup for that service for Part B drugs.

Financing of Medicare

Medicare receives funding from a variety of sources.

The inpatient admitted hospital and skilled nursing coverage provided by Part A is principally supported by a 2.9 percent payroll tax imposed on employers and employees (each pay 1.45 percent ). The bill set a maximum amount of remuneration on which the Medicare tax could be levied annually until December 31, 1993, in the same way that the Social Security payroll tax does.

Abolition of compensation ceiling

The compensation ceiling was abolished on January 1, 1994. Because they are both an employee and an employer, self-employed individuals must compute the entire 2.9 percent tax on self-employed net earnings, although they can deduct half of the tax when computing income tax.

How to pay for mandatory subsidies of the Affordable Care Act?

To help pay for the Affordable Care Act’s mandatory subsidies, the Part A tax rate on earned income over $200,000 for individuals ($250,000 for married couples filing jointly) was raised to 3.8 percent in 2013.

Premiums

Parts B and D are partially supported by Medicare enrollee premiums as well as general Treasury receipts (to which Medicare beneficiaries contributed and may still contribute). In 2006, a surtax on higher-income seniors’ Part B premiums was imposed to help pay Part D.

Another surtax was introduced to Part D premiums for higher-income seniors in 2010 as part of the Affordable Care Act legislation, while the number of Part B beneficiaries due to the 2006 surtax was doubled, again as part of the PPACA law.

Covering Parts A, B, C and D

To receive and disburse the money described above, Parts A and B/D employ distinct trust funds.

Part C beneficiaries are fully covered by Medicare Parts A and B, just like all other beneficiaries, but their medical needs are paid for through a sponsor (most often an integrated health delivery system or spin out) to providers rather than “fee for service” (FFS) through an insurance company called a Medicare Administrative Contractor.

Medicare expenditures as a percentage of the US Economy

Medicare expenditures totaled approximately $740 billion in 2018, accounting for about 3.7 percent of US GDP and more than 15% of all US federal spending.

Because of the two Trust funds and their different revenue sources (one dedicated, the other not), the Trustees look at Medicare spending as a percentage of GDP rather than as a percentage of the federal budget.

By 2030, the Baby Boom generation is expected to retire, bringing the total number of people in the workforce to more than 80 million.

Eligibility for Medicare

Medicare is available to everyone 65 or older who has lived in the United States for at least five years and has been a lawful resident for at least five years. People under the age of 65 who receive Social Security Disability Insurance (SSDI) benefits may also be eligible. Specific medical issues may also make it easier for people to qualify for Medicare.

If the following circumstances apply, people are eligible for Medicare coverage and their Medicare Part A premiums are completely waived:

65 years or older

They are 65 years old or older, US citizens or permanent legal residents for the previous five years, and they or their spouses (or qualifying ex-spouses) have paid Medicare taxes for the previous ten years.

They must receive one of these benefits for at least 24 months from the date of entitlement (eligibility for first disability payment) before becoming eligible to enrol in Medicare.

Under 65 and disabled individuals

They are under 65, disabled, and have been receiving either Social Security SSDI benefits or Railroad Retirement Board disability benefits; they must receive one of these benefits for at least 24 months from the date of entitlement (eligibility for first disability payment) before becoming eligible to enrol in Medicare.

End-stage renal illness necessitates ongoing dialysis or a kidney transplant.

If they or their spouse have not paid the qualifying Medicare payroll taxes, those 65 and older who wish to participate in Part A Medicare must pay a monthly premium to stay enrolled in Part A Medicare.

Eligibility for SSDI payments

People with impairments who receive SSDI remain eligible for Medicare as long as they continue to receive SSDI payments; but, if they cease receiving SSDI, they lose their disability-based Medicare eligibility.

The coverage does not begin for another 24 months after the SSDI application is approved. The 24-month exclusion means that unless they have one of the conditions specified, persons who become incapacitated must wait two years before receiving government medical insurance.

The 24-month period begins on the date that an individual is judged to be eligible for SSDI benefits, not on the date that the first payment is made. Many new SSDI users receive “back” disability pay, which covers a six-month period between the start of disability and the first monthly SSDI payment.

Benefits received from the parts of Medicare

Part A, or Hospital Insurance, is the most basic of the four elements of Medicare. Medical Services Insurance is covered under Part B. Many prescription medications are covered by Medicare Part D, however some are covered by Medicare Part B.

The distinction is made in general depending on whether or not the medicines are self-administered, however this is not a complete distinction.

Part C Medicare health plans, the most popular of which are branded Medicare Advantage, are an additional means for Original Medicare (Part A and B) members to get their Part A, B, and D benefits; simply put, Part C is a capitated fee while Original Medicare is a fee for service. Medical necessity is required for all Medicare benefits.

Parts A and B were included in the original programme. Part-C-like plans have existed under Medicare as demonstration projects since the early 1970s, but the Part was formally established by legislation in 1997.

Part D was enacted in 2003 and went into effect on January 1, 2006.

Previously, private insurance or a public Part C plan might provide coverage for self-administered prescription medications (if wanted) (or by one of its predecessor demonstration plans before enactment).

CMS began mailing new Medicare cards with new ID numbers to all enrollees in April 2018.

Previously, ID numbers on cards contained recipients’ Social Security numbers; now, ID numbers are produced at random and are not linked to any other personally identifiable information.

Insight into Part A of Medicare

Part A covers inpatient hospital stays, including semi-private rooms, food, and diagnostics, where the beneficiary has been legally admitted to the hospital.

Medicare Part A had a $1408 inpatient hospital deductible, a $352 coinsurance per day after 61 days of confinement within one “spell of sickness,” and a $704 per day coinsurance for “lifetime reserve days” (basically, days 91–150 of one or more stays of more than 60 days) as of January 1, 2020.

In a Skilled Nursing Facility (after a medically required hospital stay of three nights or more), the coinsurance structure is different: $0 for days 1–20; $167.50 per day for days 21–100. Part B covers several medical services that are covered under Part A (e.g., some surgery in an acute care hospital, some physical therapy in a skilled nursing facility).

On the first day of each year, these coverage amounts rise or decrease.In most cases, the maximum duration of stay covered by Medicare Part A in a hospital admitted inpatient stay or series of stays is 90 days.

The first 60 days would be funded in full by Medicare, with the exception of a $1340 cost (sometimes known as a “deductible”) at the start of the 60 days in 2018. As of 2018, a $335 co-payment is required for days 61–90. In addition, the beneficiary is given “lifetime reserve days,” which can be used after 90 days.

As of 2018, the beneficiary must pay a copayment of $670 a day for these lifetime reserve days, and they can only use 60 of them in their lifetime.

A new pool of 90 hospital days, with new copays of $1340 in 2018 and $335 per day for days 61–90, begins only after the beneficiary has been in the hospital or a Skilled Nursing Facility for 60 days without receiving reimbursement from Medicare.

Some “hospital services” are offered as inpatient services, which are reimbursed under Part A, and others are delivered as outpatient treatments, which are reimbursed under Part B rather than Part A which is determined by the “Two-Midnight Rule.”

Medicare phone number

Log into your secure Medicare account or call 1-800-MEDICARE with specific billing problems or inquiries regarding your claims, medical records, or spending.

You must fill out a “Authorization to Disclose Personal Health Information” form if you want Medicare to be able to provide your personal information to someone other than you. This form is also available in Spanish.

The phone number is : 1-800-633-4227

How do i sign up for Medicare when i turn 65?

If you are 65 years old and do not get Social Security or Railroad Retirement benefits, you must actively enrol in Medicare.

If you need to enrol in Medicare, follow the instructions below.

If you elect to join up for Parts A and/or B of Medicare during your Initial Enrollment Period, you can do so by:

  • Visiting a Social Security office in your area
  • Calling the Social Security Administration at 800-772-1213
  • Sending a signed and dated letter to Social Security with your name, Social Security number, and the date you want to enrol in Medicare.
  • Alternatively, you can apply online at www.ssa.gov.

Enroll in Medicare if you are qualified for Railroad Retirement benefits by contacting the Railroad Retirement Board (RRB) or your local RRB field office.

Is it mandatory to sign up for Medicare at age 65?

When you sign up for Social Security, you must also sign up for Medicare Part A. They are inextricably related. Medicare Parts B, C, and D, on the other hand, are voluntary, and you can opt out if you have creditable coverage.Medicare isn’t always required; in certain cases, it is offered automatically, and opting out may take some work.

Almost every American over the age of 65 is eligible for Medicare, and nearly all of them are eligible for free Medicare Part A (hospital insurance). Despite the fact that nearly three-quarters of Medicare beneficiaries are satisfied with their coverage, not everyone in this age range wants to be on the program.

Do you have to sign up for Medicare at 65 if you are still working?

Medicare eligibility begins at age 65, and enrolling early might save you money on premiums. However, if you’re working at the age of 65, you have a little more leeway. The size of your workplace determines whether you must enrol in Medicare at 65 if you continue to work and obtain health insurance through your job. If your health insurance is provided through your spouse’s employer, the same regulations apply.

The case of employer with 20 and more than 20 employees

You can delay enrolling in Medicare until your employment expires or your coverage ends (whichever comes first) if you have group health insurance from an employer for whom you or your spouse actively works until you turn 65. You will not be penalised if you enrol later. When your employer-sponsored coverage ends, you have an eight-month special enrollment period to sign up for Medicare.

The case of employer with less than 20 employees

Companies and organisations with fewer than 20 employees are exempt from the regulations prohibiting major insurers from pushing (or even urging) Medicare-eligible employees to abandon their employer plan and enrol in Medicare. In this case, the employer has the final say.

If your company requires you to enrol in Medicare, Medicare becomes your primary coverage, with the employer plan serving as a backup. To put it another way, Medicare pays your medical expenditures first, and the group plan only pays for services that Medicare does not cover. As a result, if you don’t sign up for Medicare when it’s due, you’ll be left with no coverage.

Asking employer about your obligation to Medicare enrollment

As a result, it’s critical to inquire with your employer about whether you’ll be obliged to enrol in Medicare when you turn 65 or if you’ll be eligible for Medicare based on your disability. If that’s the case, find out how the employer’s plan will interact with Medicare.

If not, request a written ruling.

In this case, enrolling in Medicare Part B while still having employer-provided coverage will not impair your ability to get Medigap supplemental insurance once your work ends. You have the right to acquire Medigap with full government protections if you buy it within 63 days of your employer’s coverage expiring if Medicare is your primary insurance.

Conclusion

Medicare has proved to be a huge blessing to every American citizen but to obtain the blessing it is pivotal to comprehend how the parts and procedures work behind this supportive mechanism from the state. The number of beneficiaries, how care is given, the usage of services (including prescription medicines), and health-care prices all have an impact on Medicare spending. Medicare spending growth has moderated in recent years, both in aggregate and per capita, but is predicted to accelerate in the coming decade.

Tony Bennett

Tony Bennett

Tony Benett makes his living in the insurance industry by teaching and consulting. He is also recognized by the legal profession as an expert on insurance coverages. His insurance experience includes having worked at the company level, owned an independent general agency and having worked for an insurance association. He has received various certificates over the past few years and helps his clients and readers by giving them a realistic outlook on what they can expect to achieve within their set targets. At Insurance Noon, he is known for his in-depth analysis and attention to details with accuracy. He has been published as one of the most referred agents by his peers in the insurance community. Tony loves the outdoors and most sport events. His passion other than providing excellent advice is playing golf.

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