Medicare is a program run by Centers for Medicare and Medicaid Services (CMS) and Social Security. To start your Medicare, call Social Security at 800-772-1213 or go to SSA.gov to activate your Parts A, B & D Medicare.

Part A – Hospital Coverage
Part B – All other Medical Care
Part C – Medicare Supplement or Medicare Advantage Plan
Part D – Prescription Drug coverage
You are required to have Parts A, B & D – Part C covers what Original Medicare does not and is optional. (But it’s the part you hear the most about in TV ads)

Medicare Advantage Plans – bundled coverage including prescription drug coverage, dental, vision and hearing coverage and some in-home care. This plan has no to low premiums and has co-pays and co-insurance obligations for the user. These plans are updated annually, have required doctor networks and have multiple options including HMO, HMO-POS, and PPO plans. Procedures may require prior authorizations.

Medicare Supplements – The most comprehensive medical care money can buy. These plans have higher monthly premiums and require a separate Prescription drug plan and dental,vision and hearing plans in addition to the Medicare Supplement. These plans vary based on the letter of the plan. The most common are Plan G and Plan N. Plan G has a $257 deductible annually and then all care is covered 100%; Plan N has lower premiums, a $257 deductible, and copays of $20 for doctor visits and $50 ER visits. All other care is covered on a Plan N.

Original Medicare: Part A; Part B and Part D – you can add an ancillary Dental, Vision and Hearing coverage for non-medicare covered procedures, and you must have a separate Prescription Drug Plan to avoid penalties. There is no Part C on original Medicare. Part C is not required.

If you plan to delay your retirement, you must have other credible healthcare coverage – i.e. an employer plan. Cobra and ACA marketplace coverage will not qualify…you must move to Medicare once you turn 65 if you are insured by either of these programs. If you delay your retirement, you can also delay the start of PART B. BUT make sure you keep records of your employer coverage to avoid penalties when you do start your Part B. Social Security will ask you for proof of coverage, so keep a file of your 1095 tax forms while you are delaying Part B. Also, make sure you inform Social Security you will be delaying your Part B.

You can also delay your Medicare Coverage if you are covered by a spouse’s employer plan. In this case, you are allowed to delay the start of your Part B. But make sure you keep track of your annual 1095 forms showing you were covered for each year you delay your Part B to avoid penalties. Also, make sure you inform Social Security you will be delaying your part B.

Contrary to popular belief, Medicare is not free. Here are some of the costs for care:

Part A: No premium; $1676 deductible for every hospital admission
Part B: $185/month in 2025
Part C: Can be a $0 premium up to $200+ month depending on type of plan you enroll in; if enrolling in a Medicare Advantage plan you will also have co-pays and co-insurance when using the plan. If enrolling in a Medicare Supplement you will have additional premiums for Prescription Drug Coverage and Dental,Vision, Hearing.
Part D: Prescription drug coverage can be bundled into a Medicare Advantage Plan or as a separate Prescription Drug Plan. A separate PDP premium starts at $0 and can go to $150+/mo. Plus the cost of your meds. There is a $590 Prescription Drug Deductible on most plans in 2025. Maximum out of pocket costs for prescription drugs in 2025 is $2000 not including the plan premium.

The Centers for Medicare & Medicaid Services (CMS) is the federal agency that runs the Medicare Program. CMS is a branch of the Department of Health and Human Services.

CMS also monitors Medicaid programs offered by each state.

In 2023, Medicare covered over 66.7 million people. Total expenditures in 2023 were just over $1 trillion. This money comes from the Medicare Trust Funds.

Medicare Trust Funds

Medicare is paid for through 2 trust fund accounts held by the U.S. Treasury. These funds can only be used for Medicare.

Hospital Insurance (HI) Trust Fund
How is it funded?

1- Payroll taxes paid by most employees, employers, and people who are self-employed

2-Other sources, like these:
     • Income taxes paid on Social Security benefits
     • Interest earned on the trust fund investments
     • Medicare Part A premiums from people who aren’t eligible for premium-free Part A

What does it pay for?

• Medicare Part A (Hospital Insurance) benefits, like inpatient hospital care, skilled nursing facility (SNF) care, home health care, and hospice care
• Medicare Program administration, like costs for paying benefits, collecting Medicare taxes, and fighting fraud and abuse

Supplementary Medical Insurance (SMI) Trust Fund

How is it funded?

• Funds authorized by Congress
• Premiums from people enrolled in Medicare Part B (Medical Insurance) and Medicare drug coverage (Part D)
• Other sources, like interest earned on the trust fund investments

What does it pay for?
• Part B benefits
• Part D
• Medicare Program administration, like costs for paying benefits and for fighting fraud and abuse

Medicare penalties are fees that are added to a person’s monthly premium if they don’t sign up for Medicare when they are eligible. The penalties can apply to Medicare Part A, Part B, and Part D:

• Part A: A 10% penalty for each year that a person delays enrollment, up to twice the number of years they were eligible but didn’t have Medicare. However, most people don’t pay this penalty because they qualify for premium-free Part A.

• Part B: A 10% penalty for each year that a person delays enrollment.

• Part D: A 1% penalty for each month that a person delays enrollment, rounded up to the nearest $0.10. This penalty is added to a person’s monthly premium for as long as they have Medicare drug coverage.

Medicare charges late fees to encourage people to enroll on time and to help reduce overall costs. The penalties can be significant, and they are added to a person’s premium for the rest of their life.

IRMAA stands for Income-Related Monthly Adjustment Amount, which is an additional fee that some Medicare beneficiaries pay on top of their regular premiums. The Social Security Administration (SSA) determines if a beneficiary is subject to IRMAA based on their modified adjusted gross income (MAGI) from two years prior. The higher the beneficiary’s MAGI, the higher their IRMAA.

IRMAA was created to help ensure the financial stability of Medicare. It was first established in 2003 as a surcharge on Part B premiums, and was later expanded to include Part D prescription drug coverage.

Income that qualifies for IRMAA adjustment in 2025 is Single HH income $106K annually; Married HH income $212K annually

In 2025 there will be a monthly deduction of $185/mo for Part B Medicare.

For a hospital stay on Medicare, you will pay a Part A deductible for the first 60 days of your stay, then a daily coinsurance of $408 for days 61-90, and a higher daily coinsurance of $816 for any additional “lifetime reserve” days beyond 90, which are limited to 60 days in your lifetime; after that, you pay the full cost of the stay.

Key points about Medicare hospital costs:

• Deductible: You will pay a single deductible for each benefit period, even if you have multiple hospital stays within that period.
• Days 1-60: No additional cost after paying the deductible.
• Days 61-90: $408 per day coinsurance
• Days 91 and beyond (lifetime reserve): $816 per day coinsurance

Important considerations:

Medigap plans:
To reduce out-of-pocket costs, you can consider purchasing a Medigap plan which can help cover some of the costs not fully covered by Original Medicare.

Check with your provider:
Always verify with your healthcare provider about specific costs related to your hospital stay and any potential additional charges.

Go to Medicare.gov

Medicare coverage is based on the county you live in. Not every market offers the same medicare coverage options, so to help identify the options available to you, your zipcode gets us to the coverage area the fastest. This is so you are not presented plans that are not available for you to enroll in.

There are Special Needs Plans in some markets available for those with both Medicare and Medicaid that offer additional financial assistance, including grocery/utility money. You must qualify for these plans and most are based on financial need.

There are Special Needs Plans in some markets available for those with both Medicare and Medicaid that offer additional financial assistance, including grocery/utility money. You must qualify for these plans and most are based on financial need.