Understanding Medicare

October 1, 2019

Medicare started in 1965 with Harry Truman being the first person to sign up. Today, 10,000 people join Medicare each day and are compelled to decipher its thousands of pages of rules and regulations.

To receive the maximum Medical Subsidy from Pensions, you need to sign up for all parts of Medicare for which you are eligible

The Relief Association receives quite a few calls from members with questions about Medicare such as, “When should I sign up?” “How much does it cost?” and “What do the different parts cover?” I recently attended the National Training Program for Medicare in Chicago, where these questions, and more, were addressed. This article will focus on addressing some of the questions surrounding Original Medicare.

New Medicare Cards

Medicare has been in the process of issuing new Medicare cards to all Medicare enrollees. The new format replaces your Social Security Number with a Medicare Beneficiary Identifier Number. Make sure you destroy your old Medicare card and start using your new card right away.

If you did not receive the new Medicare card, contact Medicare at 1-800-633-4227 to verify that they have your information, including your correct address on file.
IMPORTANT: starting January 1st, if you don’t have the new Medicare card, your claims could be denied.

What you need to Provide to the Relief Association when you enroll in Medicare

• Please provide a copy of your scanned Medicare Card to us by email at: memberservices@lafra.org
• You can also send a copy of your card by mail to:
Los Angeles Firemen’s Relief Association
Attn: Member Services
7470 N. Figueroa St.
Los Angeles, CA 90041

Eligibility

Medicare eligibility typically begins at age 65. You may also be eligible if you are disabled and under age 65, have end-stage renal disease or Amyotrophic Lateral Sclerosis (ALS, also known as Lou Gehrig’s disease). If disabled and under age 65, you will automatically get Part A and Part B after you get disability benefits from Social Security for 24 months.

Medicare Parts

There are different parts of Medicare that cover different services. Below is a general list of the different parts of Medicare and the services covered under each part.

Part A – In general, Part A covers inpatient hospital care along with skilled nursing facilities, home health care and hospice care.

Part B – Part B typically covers medical services from providers along with outpatient care, home health services, durable medical equipment, mental health services and many preventive services.

Part D is Medicare’s Prescription Drug Coverage. All Part D coverage is provided thru private insurance companies. For Relief Medical Plan members, your drug coverage is provided by LAFRA through an Employer Group Waiver Plan (EGWP- pronounced “egg whip). EGWP is a Medicare Part D prescription drug plan option that is offered to retirees through a group benefit plan.

Medicare Costs

Part A – You usually don’t pay a monthly premium for Part A coverage if you or your spouse paid Medicare taxes while working for at least 40 Quarter Hours. This is sometimes called premium-free Part A because it is paid for by the FICA taxes you paid. If you aren’t eligible for premium-free Part A, you may be able to buy Part A.

In most cases, if you choose to buy Part A, you must also have Part B and pay monthly premiums for both. If you choose NOT to buy Part A, you can still buy Part B.

Part B – The standard Part B premium amount in 2019 will be $135.50. Most people will pay the standard Part B premium amount. Part B is funded by the premiums you pay.

If your modified adjusted gross income as reported on your IRS tax return from two years ago is above $85,000 for individuals or $170,000 for joint filers, you’ll pay the standard premium amount and an Income Related Monthly Adjustment Amount, also known as IRMAA. IRMAA is an extra charge added to your premium and impacts just 5% of all Medicare Beneficiaries nationwide.

The Part B premium is deducted from your monthly Social Security check. If it is not deducted because you may not be receiving Social Security payments, you are a cash pay and you will be billed by Medicare. If you fail to pay your premiums, your coverage can be discontinued. At that point, you’ll need to sign up for Part B once again during the general Medicare enrollment period that runs from January 1 to March 31

Part D – If the government classifies you as a High-Income earner, you may be charged a surcharge called Part D-IRMAA. An individual with income of $85,000 or more and those filing jointly with income higher than $170,000 are subject to IRMAA.

Enrollment Periods

The Initial Enrollment Period for those turning 65 is seven months. This 7-month period begins three months before the month you turn 65, the month you turn 65, and three months after the month you turn 65.

After your Initial Enrollment Period is over, you may have a chance to sign up for Medicare during a Special Enrollment Period. If you didn’t sign up for Part B (or Part A if you have to buy it) when you were first eligible because you are covered under a group health plan due to current employment (your own, a spouse’s, or a family member’s (if you have a disability), you can sign up for Part A and/or Part B anytime you’re still covered by the group health plan or during the 8-month period that begins the month after the employment ends or the coverage ends, whichever happens first.

A General Enrollment Period applies to those people who did not enroll during their Initial Enrollment Period or qualify for a Special Enrollment Period. This enrollment period runs from January 1 thru March 31, with coverage starting July 1st. Your coverage won’t start until July 1 of that year, and you may have to pay a higher Part A and/or Part B premium for late enrollment.

Late Enrollment Penalties

It is important to sign up for Medicare when you are first eligible to prevent any late enrollment penalties.

Part A – if you aren’t eligible for premium-free Part A, and you don’t buy it when you’re first eligible, your monthly premium may go up 10%. You’ll have to pay the higher premium for twice the number of years that you could have had Part A but didn’t sign up.

Part B – in most cases, if you don’t sign up for Part B when you are first eligible, you will be subject to a late enrollment penalty for as long as you have Part B.

Part D – the Part D late enrollment penalty is an amount that’s permanently added to your Part D premium. You may owe a late enrollment penalty if at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don’t have Part D or other creditable prescription drug coverage. You’ll generally have to pay the penalty for as long as you have Part D coverage.

There are thousands and thousands of rules and regulations for Medicare. We are just scratching the surface and providing a basic summary of Original Medicare. Please contact Medicare or Social Security if you have additional questions.

Visit Medicare.gov/publications to view, print, or download copies of publications on different Medicare topics. You can also call 1-800-MEDICARE (1-800-633-4227).

To Find out if you’re eligible for Part A and/or Part B and how to enroll, make changes to your Part A and/or Part B coverage, report a change to your address or name, ask questions about Part A and Part B premiums, and report a death call: 1-800-772-1213 or go to socialsecurity.gov.

By Todd Layfer, Executive Director, LAFRA

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