A Medicare Primer

XPYRIA Team Insights

A Medicare Primer

Joseph G. Salpietro, ChFC®, AIF® XPYRIA Team Insights

Medicare is complicated and can be daunting. Social Security, the department in charge of Medicare, has over 2,700 rules and thousands of codicils, but only one 800 telephone number. There are premiums (no, Medicare it is not free Uncle Bernie [Sanders]), potential penalties (that will follow you for life), and more that need to be considered related to the Medicare process. You don’t need to go it alone. There are too many variables related to individual circumstances to capture all the nuances in a brief primer, but here are a few items you should know about the process and your options. You should feel free to reach out to XPYRIA for more specificity concerning the appropriate path for you.

Most people think of Medicare as having four Parts: A, B, C & D. It is less confusing to think about Medicare as having THREE Parts: A, B, & D, and TWO Paths: Original Medicare and Medicare Advantage. Part A is for hospitalization, Part B is for medical, and Part D helps cover the costs of prescriptions drugs and is optional coverage.

Original Medicare is administered by the U.S. Government and is identified by the Medicare Card. It starts with Part A & B, but for comprehensive coverage you must add a Medigap (aka: Medicare Supplement) policy and Part D. Medigap covers the “gaps” in Parts A & B and are federally standardized (i.e. has the same basic coverage regardless of carrier or price) referred to as Plans A through N. With this plan you pay a monthly premium and then have no out-of-pocket costs for healthcare services. It is important to note that a Medigap policy ensures a “Guaranteed Issue Right” meaning you cannot be denied coverage for pre-existing conditions. This right has time limits based on your Part B enrollment and whether you first enroll in a Medicare Advantage Plan. After these time limits, you may not be able to get or change a Medigap policy.

Medicare Advantage is administered by a private insurance company and is identified by an insurance card. Medicare Advantage must provide hospitalization and medical but offering prescription drugs is optional. This type of coverage is labeled as Part C. With Medicare Advantage (aka: Part C) you should get to know your plan limits and expect that almost all healthcare needs will require prior authorization by the controlling insurance company. While you may not pay monthly premiums, you will likely pay something every time you use healthcare services. It is worth noting that you can always go from Original Medicare to a Medicare Advantage policy, but you may not be able to choose Original Medicare if you start out with Medicare Advantage. 

Lastly, the cost you pay for Medicare in the current year may be higher if your income exceeds the Income-Related Monthly Adjustment Amount (IRMAA) as reported two years prior.

Follow this Six Step process:

Step One: Check your timing. Things such as employment status, whether you are already receiving Social Security, and whether your employer has 20 or more employees, will all need to be reviewed when determining options. For individuals receiving COBRA, Part A and Part B enrollment is a must. Without Medicare, there is NO primary payer. The initial Enrollment Period (IEP) is the 7-month period surrounding your birth month (i.e., three months before and three months after your birth month.) If your birthdate is on the first day of the month, the period shifts to one month earlier (i.e., four months before and two months after your birth month.) There is also and 8-month Special Enrollment Period (SEP) for those that qualify based on employer provided coverage and a General Enrolment Period (GEP) from January 1 through March 31 for those who missed their IEP and do not qualify for the SEP.

Step Two: Consider your “Path”- Original Medicare, or Medicare Advantage.

Step Three: Do your research and Select Your Specific Plan.

Step Four: Enroll in Medicare.

Step Five: Enroll in your Specific Plan.

Step Six: Review your coverage annually.

About the Author

Joseph G. Salpietro, ChFC®, AIF®

Principal, Chief Executive Officer, President and Senior Client Advisor
Mr. Salpietro has knowledge and experience in comprehensive financial planning that integrates global investment management, legal (advance directives and estate planning), tax, insurance, and family dynamics. His passion is helping clients organize their financial lives so that they understand their financial situations, the options they have available, and the financial decisions that need to be made for them to live their best lives. As a fiduciary for over a quarter century, Mr. Salpietro has used his financial insight and expertise to advocate for his clients, providing counsel that is in their best interest.  In addition, Joe has decades of experience as an Outsourced Chief Investment Officer (OCIO), helping institutional clients manage risk, while maximizing the growth necessary to fullfil their organizational missions.  Mr. Salpietro works with individuals, closely held businesses, non-profit [501(C)(3)] organizations, union accounts, Taft-Hartley plans, and government entities. Mr. Salpietro has knowledge and experience working with a wide range of investment alternatives. He is knowledgeable in the areas of investment management and research, investment policy development, financial planning, cash flow analysis, and debt management.