Medicare is such a confusing process.
We’ve done one interview already about Medicare, but wanted to go back to the basics on this one.
Kim & Mike Barnes, Parenting Aging Parents, talk with Medicare Specialist Lee Green about: how you sign up for Medicare, how old do you have to be to get Medicare, how Medicaid fits in, what happens when you move from state, and more.
Read the full transcript
Transcript of Interview: “How Does Medicare Work?”
Mike Barnes:
You know, there are so many questions about health insurance, especially Medicare. When you get to be that age, especially when you get to our parents’ age, and you need to use Medicare all the time. But when do you get it? How do you get it? There are so many questions out there, and I’m glad to be able to help shed some light on that today. But I don’t have the answers. We are bringing in Lee Green, who is a Medicare specialist and an independent insurance agent because we know you have the answers. We just have the questions. So glad for you to be with us today.
Lee Green:
Thank you, good to be here.
Kim Barnes:
Well, I mean, this sounds sort of silly, but how do you actually sign up for Medicare? Does it just automatically happen when you turn 65, or do you have to sign up?
Lee Green:
Great question. If people are already getting Social Security, Kim, when they turn 65—because you know you could sign up for Social Security as early as 62—if you’re already getting a Social Security check, then Social Security, who runs the Medicare program, will automatically sign you up for Medicare Part A and Part B. That’s hospital coverage and medical coverage. They will send you your red, white, and blue Medicare card about three months before your 65th birthday month because Medicare always starts on the first day of the month in which you turn 65.
Kim Barnes:
So definitely tied to your Social Security.
Lee Green:
It could be. If you’re getting Social Security, they’ll automatically sign you up for Medicare A and B and send you a card. If you’ve decided to put off Social Security until you’re 68 or even 70, then essentially you need to proactively sign up for Medicare, primarily by going online onto the Social Security website. There’s a box on the home page called “Click here to enroll in Medicare,” and yes, there are about 10 questions—name, address, date of birth—click submit, and in about 10 days, you’ll get your Medicare card. It’s that simple.
Mike Barnes:
So if you are still working past 65, you don’t have to get Medicare, you don’t have to pay for Medicare, you can wait if you have your own health insurance with the company that you work for?
Lee Green:
That’s a great question, Mike. If you are working past 65, and certainly a lot of us are these days, if your company has less than 20 employees, then you do have to sign up for Medicare A and B when you turn 65 because Medicare then becomes primary, and your employer plan, if you decide to keep it, becomes secondary. So you must do that. If you’re with a larger company of more than 20 employees, you should sign up for Medicare Part A because it’s the hospital coverage, and it doesn’t cost anything. So I always advise my clients to sign up for Part A unless, of course, you have a health savings account (HSA) at work.
Kim Barnes:
Just to add a little more confusion, right?
Lee Green:
Yes, if you’re putting money in an HSA, do not sign up for Medicare A and B because you will have an IRS tax penalty. So I always ask people, “Are you still working? Do you have an HSA at work?” If they say no, I say, “Sign up for Part A, there’s no cost to it,” and you can keep your employer plan as primary if it’s a company of more than 20 employees. Then your Medicare Part A would help with any inpatient bills.
Mike Barnes:
Go ahead.
Kim Barnes:
No, you go ahead.
Lee Green:
To Mike’s point, you can put off signing up for Medicare Part B, which you have to pay for. It starts at $148.50 a month, but it is tied to your income. You could put that off for as long as you want as long as you have employer coverage, and you could sign up for Medicare Part B at age 70 with no penalty, no financial penalty. So a lot of people put that off because they’re like, “I have great employer coverage, why should I pay $148 a month when I have tremendous coverage through my company?”
Mike Barnes:
And it’s not like life insurance where you should do it early because it’ll cost more later. It’s okay to wait until you’re retired at 70 or 72 or something like that?
Lee Green:
Right, it’s not like life insurance in that respect. The Part B premium of $148.50 is going to go up five to eight dollars a month, but that’s going to go up regardless of whether you put it off or you sign up at age 65. Some of the supplement products that we’ll talk about in a second are based on your age, but again, if you sign up at 65, by the time you’re 70, it may have gone up $25. You’re not really going to be penalized to your point, Mike, if you put it off.
Kim Barnes:
Do you have to be a U.S. citizen to qualify for Medicare?
Lee Green:
Great question. You do not. You can either be a U.S. citizen or you could be a permanent resident with a green card as long as you have resided in the United States for the five years prior to signing up for Medicare Part A and B.
Mike Barnes:
And does it matter where you live? I know a lot of grandparents move to be closer to their kids but mainly their grandchildren. So if you move from Texas to Wisconsin or Texas to Florida or wherever you move, does it matter?
Lee Green:
It doesn’t matter. Medicare A and B is good anywhere in the United States. Medicare does not cover you outside of the country—very important to know.
Kim Barnes:
And then if you choose a Medicare Advantage plan or a supplement plan, because a very important takeaway from this interview is that Medicare A and B only pays about 80 percent of your doctor bills. So if all you do is enroll in Medicare and you don’t enroll in a supplement or an advantage plan, you’re on the hook for 20 percent of an unlimited number, and I don’t advise that obviously for anybody. But if you do move from Dallas to Houston or New Jersey to Texas, there are a number of special enrollment periods that allow people to change their coverage.
Mike Barnes:
So if you have a supplemental plan, perhaps there are supplemental plans that don’t practice necessarily in the state where you are. In the supplemental plans, could you run into that issue? But with Medicare in general, you wouldn’t?
Lee Green:
Well, there are two options once you get your Medicare card. You can either have a Medicare supplement which picks up the other 20 percent, and with a supplement, you can go to any doctor in the country that sees Medicare patients and, essentially, other than a $203 deductible, pays all your bills. You could go to the Mayo Clinic, you could go to MD Anderson, you could go to Johns Hopkins. There are no network restrictions. You would have to get a separate drug plan because Medicare A and B doesn’t cover prescriptions at Walgreens or CVS or HEB.
The other option, instead of a Medicare supplement, would be a Medicare Advantage HMO or PPO, which typically has a monthly premium of zero. It has a lot of bonus benefits that are not typically covered by Medicare like dental, vision, hearing, free gym membership, a quarterly over-the-counter card. They make it very attractive and a lot of people do sign up for Advantage plans. The Advantage plans do have a network that they want you to use, and they often have co-pays for services. So if you’re in Austin and you’re in a Medicare Advantage plan with one carrier and you move to Houston, you might have to choose a different Medicare Advantage plan. Your Medicare supplement product, on the other hand, will go with you anywhere in the country.
Kim Barnes:
So a lot of it is really understanding the terminology and what exactly it is, because I think a lot of times we just think, “Oh, I have Medicare,” but we might refer to it as a supplement or an advantage interchangeably, and they’re definitely not.
Lee Green:
That is correct.
Kim Barnes:
So good to know. That’s why it’s important to sit down and talk to a specialist because, to be honest, Medicare can be very confusing. There are a lot of options; it’s very difficult to compare, and an agent will have a lot of expertise in which doctors and hospitals participate in what plan, what if you travel, what if you spend half the year in Florida. There are a lot of important questions. What if you’re still covered by the State of Texas or Shell Oil? These are some of the things we get into to help people select what’s the most appropriate option for them.
Mike Barnes:
Right, and it’s going to be different because everybody has a unique situation. But I guess the biggest takeaway that I’m hearing too is that the Advantage plan takes the place of the Medicare supplement, right?
Lee Green:
Correct, you get one or the other. When people try to do it themselves, if they make a choice and it’s the wrong one, they could be stuck—not such a good idea. Medicare does have an open enrollment every year from October 15 to December 7, where people can actually shop around and make some changes to their coverage.
Mike Barnes:
I feel like there’s some confusion about Medicare and Medicaid. Do you find there’s confusion there, especially how they kind of work together so to speak?
Lee Green:
There is, Mike. Medicare is the federal program, and Medicaid is basically run by the State of Texas. They do work hand in hand. Medicaid is typically based on your income situation, or there might be certain other categories that would make you eligible for qualifying for Medicaid. If you have Medicare and Medicaid, there are certain plans that you should enroll in which will provide you with 100 percent coverage and a lot of extra benefits.
Mike Barnes:
So you actually can have both? You can be covered, you can have Medicare and Medicaid?
Lee Green:
That is correct. If you have both, you’re known as a dual eligible—you have Medicare and Medicaid.
Mike Barnes:
One last question. My dad had pneumonia and was in the hospital for three days back in January of this year, and after that, because of Medicare, Medicare paid for nursing visits when he got back home to his independent living. He didn’t know that at the time, and I think his doctor told him that it would have. How do you find out about stuff like that—the advantages of Medicare for any type of care that you might get? Is it through a specialist like you, through your doctor, through someone else? What’s the best way to go to find out what I could be missing?
Lee Green:
Great question. Medicare has a handbook called “Medicare and You 2021” that actually lists all the benefits and services that they cover. The Medicare.gov website has all of that information on it. Certainly, an agent will know exactly what’s covered. Of course, you can always google the question. Home health care is covered by Medicare for medically necessary issues, but it’s not covered for things like cooking, cleaning, bathing, dressing—a very big distinction, and a lot of people get confused about that.
Kim Barnes:
I think that it’s such an important topic because it is just confusing. We thank you so much for helping shed some light on some of the terminology and just helping us to be more educated as we advocate on behalf of our parents and certainly know what we have coming in the future as well.
Lee Green:
Exactly, thanks so much.
Kim Barnes:
Thank you very much.
Lee Green:
My pleasure. I look forward to helping people and basically helping them select the most appropriate plan for them.
Mike Barnes:
It is just—there are so many things. Once you think you understand one thing, you realize, “Oh yeah, but what about this?” I thought I had a pretty good handle, and now I’m thinking…
Kim Barnes:
Now you’re going, “No.”
Mike Barnes:
Yeah, now I’m trying to think about what does my mom have. Okay, I need to think about— I probably called it something which it really isn’t, so I need to go back.
Kim Barnes:
It’s like playing a game and the rules are changing, the terminology is changing all the time, so you can’t keep up. It’s hard to win in a game like that.
Mike Barnes:
That’s right. We hope that this has been helpful for you, and if you have other topics or issues that you’d like for us to cover, be sure to let us know.
*This transcript is auto-generated. Please excuse any typos or mistakes.