Medicare Made Simple: Your Guide to Advantage Plan Enrollment

Congratulations if you’re turning 65 in 2024. You will qualify for Medicare benefits sometime during the year. Medicare Part A and B form the foundation of Medicare coverage for eligible individuals, typically those aged 65 and older and some younger individuals with disabilities or specific conditions.

Medicare Part A primarily covers hospital insurance. This includes inpatient hospital stays, care in a skilled nursing facility, hospice care, and home health care. 

Most people don’t pay a premium for Part A if they or their spouse have worked and paid Medicare taxes for some time.

Medicare Part B covers medical services. This part is responsible for outpatient care, doctor’s services, preventive services, and medical supplies. Unlike Part A, Part B requires a monthly premium, which varies depending on your income. Part B also covers the services and supplies necessary for diagnosing or treating medical conditions and preventive services like vaccines.

Parts A and B provide a comprehensive coverage base. However, it’s important to note that some costs are not covered, leading many to seek additional coverage for prescription drugs through Medicare Advantage (Part C), Medigap, or Part D for prescription drugs.

In our blog, we’ll look at how to enroll and understand the various options available to you in the form of supplemental coverage, penalties, and other nuances related to Medicare.

Initial Enrollment Period

When you turn 65, you must sign up for Medicare within a seven-month period that starts three months before you turn 65 and closes three months after you turn 65. This is called the Initial Enrollment Period.

If you skip this initial enrollment step and don’t have similar coverage, you could be subject to paying more through a late enrollment penalty:

• A penalty can get tacked onto your monthly premium, so you’ll see that cost every month.
• The longer you wait to sign up after your Initial Enrollment Period has passed, the higher this penalty can grow. Bottom line: it’s all about how long you’ve been without a plan comparable to Medicare.

What is Medicare Advantage?

If you’re on Medicare, you can stick with the traditional Medicare plan or go for a Medicare Advantage plan, like an HMO or PPO, offered by private insurers. 

With traditional Medicare, you might want to add a separate Medicare Part D plan for your prescription meds and consider getting extra insurance to cover out-of-pocket expenses unless you already have coverage through a past employer, union, or Medicaid. 

Medicare Advantage, or Medicare Part C, is an alternative to Original Medicare (Parts A and B) offered by private insurance companies. These plans provide all the benefits of Parts A (hospital insurance) and B (medical insurance) but often include additional benefits like prescription drug coverage (Part D) and dental, vision, and hearing care, which Original Medicare does not typically cover. 

When you choose Medicare Advantage, you’ll have access to many types of plans, which are free for the Medicare participant. The goal of Medicare Advantage plans is to offer individuals more comprehensive health coverage under a single plan, which might also include wellness programs and other health-related services.

The specifics of each Medicare Advantage plan can vary widely in terms of costs, coverage, and the network of healthcare providers. You should compare available plans to find one that best fits your healthcare needs and budget.

Watch our top 5 tax tips from our founder, Paul Schatz.

Medicare Supplemental Insurance Coverage

A Medicare Supplement Plan, often called Medigap, is a type of health insurance sold by private companies to cover gaps in Original Medicare (Part A and Part B) coverage. This includes paying for copayments, coinsurance, and deductibles that Medicare doesn’t cover. These plans allow individuals more flexibility in managing out-of-pocket expenses, which can be a significant concern for many.

Costs for Medicare Supplement Plans can vary widely depending on factors such as the plan type, the insurance company offering the plan, your location, and your age. Generally, monthly premiums range from around $50 to over $300. It’s important to shop around and compare plans in your area to find one that fits your budget and healthcare needs.

One of the key benefits of a Medicare Supplement Plan is the freedom to choose your healthcare providers. Unlike some Medicare Advantage Plans, which typically operate within a network of doctors and facilities, Medigap plans allow you to see any doctor or specialist who accepts Medicare. 

This feature is particularly beneficial for those who require specialized care or prefer to continue seeing their current healthcare providers without worrying about network restrictions.

Open Enrollment Season

The Medicare open enrollment period, or the Annual Election Period (AEP), occurs annually from October 15th to December 7th. During this time, you can review and adjust your coverage. 

You can switch between Medicare Advantage plans, change from Original Medicare to Medicare Advantage, or vice versa, and sign up for or switch Medicare Part D prescription drug plans.

There are certain restrictions to keep in mind:

• Options vary by geographic area, so the plans available to a beneficiary depend on their location.
• Only individuals enrolled in Medicare Parts A and B can make changes during the AEP.
• Any changes made during this period take effect on January 1st of the following year.
• Outside this period, changes are generally restricted unless qualifying for a Special Enrollment Period due to specific life events like moving or losing other insurance coverage.

About Heritage Capital

Paul Schatz, the driving force behind Heritage Capital LLC, has always had a knack for investing. In his early days, he started working on Wall Street, honing his skills in crafting sophisticated strategies that boosted investment returns and protected portfolios from taking substantial losses. 

The work was rewarding, especially since he was rubbing elbows with the elite—helping the super-rich, hedge funds, corporations, and big institutions get richer.

However, after a few years of working on Wall Street, Paul discovered a deeper calling. He wondered, why not use his skill set to help everyday people lead more secure financial lives? Why should only the wealthy get to sleep soundly?

And so, Heritage Capital LLC was born. Paul traded his cushy Wall Street position for an entrepreneur’s uncertain yet thrilling life. He set up Heritage Capital as an independent advisory firm, free from any ties to product companies. He ensured his advice remained pure and free from potential conflict of interest.

Today, Heritage Capital is known for its exceptional service and impressive results. To learn more about our comprehensive wealth management services, connect with us.