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Medicare

Applying for Social Security Disability Insurance (SSDI) benefits early is very important. The sooner you apply, the sooner you can start receiving the benefits you are entitled to. One important benefit is qualifying for the federal Medicare program.

But understanding your Medicare plan options can be confusing. It's important to review your options to ensure you're getting the level of coverage you need at a cost you can afford. You should know:

  • People with disabilities become eligible for Medicare 24 months after receiving SSDI; sooner in some instances.
  • Medicare has 4 primary parts. The coverage, costs and enrollment vary.
    • Medicare Part A (hospital insurance - part of Original Medicare)
    • Medicare Part B (medical insurance - part of Original Medicare)
    • Medicare Part C or Medicare Advantage
    • Medicare Part D (prescription drug coverage)
     

Qualifying for Medicare
While many people think of Medicare as health insurance for those who are 65 or older, Medicare is also available to those under age 65 who have received SSDI benefits for 24 months. However, due to the five-month waiting period from the start of the disabling condition for individuals to qualify for SSDI benefits, Medicare coverage cannot start sooner than the beginning of the 30th month after the start of the qualifying disability.

SSDI beneficiaries with specific conditions may qualify for Medicare sooner. This includes people with:

  • ALS, or Lou Gehrig's Disease - you qualify for Medicare the first month SSDI benefits are received.
  • End-stage renal disease or kidney failure - you qualify for Medicare after the third month of dialysis treatments.
  • A kidney problem in which you receive a kidney transplant - you qualify for Medicare in the month you receive the transplant.

A Medicare card is automatically mailed to you once you become eligible for Medicare benefits.

Understanding the Various Parts of Medicare

To better understand Medicare basics, features of each Medicare program are compared in the chart below.

  Medicare Part A (Hospital Insurance) Medicare Part B (Medical Insurance) Medicare Part C (Medicare Advantage) Medicare Part D (prescription drug coverage)
What it covers: Hospitalization, limited skilled nursing facility care, home health care, hospice care and blood Doctors' services, outpatient medical, hospital and surgical services, clinical laboratory services, home health care, blood and various preventive services Part C is an alternative to Parts A and B. This type of plan is offered by private insurance companies that contract with Medicare to provide all Medicare Part A and Part B benefits. At a minimum, these plans cover all Medicare Part A and B services. In most cases, there are extra benefits, including prescription drug coverage. Optional brand-name and generic prescription drug coverage insurance (provided by private companies approved by Medicare)
How to enroll: In general, automatic once Medicare eligibility requirements are met Must sign up during your initial enrollment period, during the general enrollment period (Jan. 1 - March 31 of each year) or during a special enrollment period (up to two months after you or your spouse lose employer health coverage or either of your employment ends - whichever is first.) During your initial enrollment period, during annual enrollment (Oct. 15 - Dec. 7) or during a special enrollment period (up to two months after you or your spouse lose employer health coverage or either of your employment ends - whichever is first). Must sign up during your initial enrollment period, during the annual enrollment period (Oct. 15 - Dec. 7) or during a special enrollment period (such as the enrollment period for which you would qualify if you lost group health coverage through an employer).
Costs: No monthly premium costs - you pay deductibles or copayments Tied to your annual income and adjusted each year; standard Part B premium = $104.90* per month in 2014 (if your annual income is not more than $85,000 as single taxpayer or $170,000 if filing a joint tax return) - you still have deductibles and copayments (these may be covered with an optional Medigap policy) The costs of Medicare Advantage plans vary depending on the services offered. For services comparable to Part A and Part B (Original Medicare), the costs are usually less because Medicare Advantage plans generally have lower copayments than in Original Medicare Costs vary based on plan and medications.

Watch out for: Without supplemental coverage, your out-of-pocket costs can quickly add up. Also, if you do not automatically get Part A when you are first eligible and fail to voluntarily enroll, you may be subject to a penalty for part of the time you have Medicare. If you don't sign up for Part B when you're first eligible, you may have to pay a late-enrollment penalty. This penalty is 10 percent of the premium for every 12-month period you could have been enrolled in Part B and were not covered by a group health plan. If you owe a penalty, you may have to pay it for as long as you have Medicare.  Because most people have dozens of Medicare Advantage plans to choose from, each with various coverage options, selecting the right plan can be difficult without some help. If you don't sign up for Part D when you're first eligible, you may owe a late-enrollment penalty. This penalty is one percent of the national average premium ($32.42 in 2014) times the number of months you went without drug coverage. If you owe a penalty, you may have to pay it for as long as you have Medicare. 


Comparing Traditional Medicare to Medicare Advantage Plans

To better understand your Medicare plan options and how everything fits together, here is a summary of the choices:

Available Medicare Health Plan Options
Choose One of Two Possible Coverage Paths
 Original Medicare Path Medicare Advantage Plan
- Includes Part A (Hospital) and Part B (Medical)
- Coverage provided by Medicare
- Deductibles, coverage and costs are standardized

- Includes everything offered by Medicare Parts A and B
- Private insurers approved by Medicare provide this coverage
- Usually includes extra coverage not offered by Parts A and B
- Costs, extra benefits, and details vary by plan
- Most people can’t be turned down for coverage

Prescription Drug Coverage 

- Decide if you plan to join separate Medicare Part D plan 
- Plans run by private Medicare-approved insurers
- If no choice is made, you pay entire prescription costs
- If you don't get Part D coverage when you're first eligible, whether through a stand-alone Part D or a Medicare Advantage plan, you could pay a penalty
- No one eligible for Medicare can be turned down for coverage

Prescription Drug Coverage

- Most Medicare Advantage plans already include this coverage
- If not, you can still join a Original Medicare Part D plan separately
- Without drug coverage, you pay entire prescription costs
- If you don't get Part D coverage when you're first eligible, whether through a stand-alone Part D or a Medicare Advantage plan, you could pay a penalty

Supplemental Coverage 

- Decide if you want supplemental coverage, a Medigap policy, to pay for gaps in Parts A and B coverage
- Offered by private insurance companies
- Costs and coverage vary by policy and company
- Similar coverage may be offered by employers or unions
- Medigap policies may exclude coverage for pre-existing conditions for up to six months. 

Supplemental Coverage

- With Medicare Advantage plans, you don’t need and can’t buy a a Medigap policy


Medicare plan options can be confusing and making a choice without considering all the options can mean not receiving the coverage you need or paying more than expected.

More information on Medicare coverage is available:

  • Medicare FAQs: Your most frequently asked questions about Medicare are answered here.
  •  Medicare Advantage Plans: Learn what Medicare Advantage plan offer. 
  • Medigap: We cover the basics of Medicare supplement insurance here.
  •  Maximizing Your Medicare Drug Coverage: Find out more about the Medicare prescription drug coverage gap or "donut hole" and what you can do to avoid thousands of dollars in potential out-of-pocket costs.
  •  Medicare Savings Programs: States have programs for people with limited income and resources to pay for some or all of their Medicare premiums, plus Medicare deductibles and coinsurance. Find out what these programs are and if you qualify.