Understanding the A, B, C, and D of the Medicare program
One of the benefits of turning 65 in the U.S. is qualifying for Medicare. The key is qualifying. The next step is to understand Medicare so you can get the most out of this important benefit.
The best way to start is to get the right information. We asked Peter Orona, licensed agent who specializes in Medicare and owns ABCD Medicare, to give insights into some of the more confusing issues.
Medicare is the health insurance program provided by the U.S. government for citizens and legal residents 65 and older. If you legally reside at least 5 years in the U.S. continuously, you can qualify for Medicare.
Once you enroll in Social Security, you will automatically be enrolled in Medicare Part A and Part B on the first day of the month you turn 65. But — and this is important — you have to be enrolled in Social Security (you do not have to receive Social Security payments).
“If you don’t activate Social Security at or before 65,” Orona said, “you will not be automatically enrolled into Medicare. You have to go through a process. That’s where we step in to help guide you on how to do this.“
You can apply online, but Orona said it’s not always easy. Sometimes the information you input gets denied. Then you’ll have to go to a Social Security Administration office in person.
“So really,” Orona advised, “preparing for when you turn 65, they give you three months in advance. It’s probably important to use all three months because there are all kinds of delays that could happen, and Social Security is overwhelmed with a lot of people applying for benefits and they’re understaffed.”
Not Your Typical ABCs (and D)
Here are the Medicare benefits available to you:
- Part A (no cost) covers inpatient hospital care, skilled nursing facility, hospice, lab tests, surgery and home healthcare.
- Part B (you pay $170.10 each month or more) covers outpatient services, doctors, specialists, labs, medical equipment, X-rays, CT scans and usually drugs received at a doctor’s office, hospital or infusion center.
- Part D (you pay about $31.50 a month) helps cover the cost of most prescription drugs.
- Part C (you pay $170.10 each month plus $0 to $200 extra), also called Medicare Advantage Plan, combines Part A, Part B and sometime Part D coverage and is supplied by an insurance company, usually with added benefits such as dental, vision, hearing and more.
If you refuse Parts B or D, you will pay a penalty if you later decide to take them. A licensed agent can provide answers if you have questions and can be especially helpful if you’re assisting a family member.
“Don’t try to do it yourself,” Orona advised. “Get help from an independent agent like myself who has studied the plans and is trained to help people find the right plan for your family members. It’s does not cost you anything to ask for help from an agent/broker. The plan you choose pays the agent for helping you.”
Free Part B — Maybe
“How do I qualify for Arizona Health Care Cost Containment System (AHCCCS)?” That’s the most-asked question Orona gets.
“It’s a fair question,” Orona said, “because they hear it from friends and TV, but people just don’t know how it works. It’s an income-level thing, and so that’s where we start.”
Medicare has a 10-year reporting requirement for people to be eligible for Part B services at no cost. So even if you’ve been a legal resident for 5 years, you won’t qualify for Medicaid.
“In general,” Orona explained, “we work all our lives and we all pay a Medicare tax whether we’re self-employed or work for an employer. That tax pays for 10 years or 40 quarters for Part A. Everybody pays for Part B unless you’re under the poverty limit, and you have to qualify for that. And it’s not that it’s free. The state and federal government pick up the costs.”
In Arizona, that would be AHCCCS Special Low-Income Medicare Beneficiary Program. But — and this is important — though you’re currently on AHCCCS and ready to turn 65, you may not quality for AHCCCS SLMB.
“People who qualified for AHCCCS,” Orona said, “when they turn 65 that dollar limit changes. They’re shocked when they find out they’re losing AHCCCS because they’re now over the limit.”
Are you starting to see why it’s important to know the facts? In our next article on October 20, we’ll talk about the Medicare Enrollment Period (October 7 to December 15 this year). If you’re already on Medicare, this is the only time you get to change your health plan, and Peter Orona will share important facts that will help you decide if you want to.
In the meantime, visit this month’s Cafecito Time con Equality Health, where moderator Maria Rebozo LaPine discusses more Medicare ins and outs with Peter Orona.