Signing Up for Medicare

There are different ways to get Medicare. For people with disabilities, Medicare eligibility is based on receiving Social Security Disability Insurance (SSDI) or Childhood Disability Benefits (CDB). These are government programs that provide income for people who can’t work because of a disability. So, when you can’t work because of a disability, SSDI provides income and Medicare provides health insurance. For more information on SSDI, see DB101’s SSDI program description.

The Two Year Waiting Period

When you apply for SSDI, Social Security figures out the day that your disability began. You’ll start getting a benefit check from SSDI five full months after that date. Once you start receiving SSDI payments, you generally have to wait two years before getting Medicare.

For example, if your date of disability is June 15, 2010, your first SSDI check will be for December 2010 (five full months after your date of disability). And your Medicare benefit will begin in December 2012 (24 months after you receive your first SSDI benefit check).

During the waiting period you may be able to get help paying for medical costs either through:

• a spouse’s employer sponsored coverage;
• COBRA, which allows you to continue employer-sponsored health coverage from a job;
• an individual health insurance policy from a private company;
• enrolling in Medi-Cal.

The only exceptions to the two year waiting period are if you have Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig’s Disease) or End Stage Renal Disease (permanent kidney failure).

The two year waiting period also applies to Childhood Disability Benefits (CDB).

Getting Medicare through SSDI: Enrollment Options

In most cases, when you get Medicare because of SSDI or CDB eligibility, you’ll automatically be signed up for Original Medicare (see details below). You’ll have to decide:

• whether you want to keep Medicare Part B;
• whether you want to get Medicare Part D Prescription Drug Coverage; and
• whether you want to keep Original Medicare or switch to Part C (Medicare Advantage), where your Medicare benefit is managed by a private company.

Original Medicare

How it Works

If you get Medicare through Social Security Disability Insurance (SSDI) or Childhood Disability Benefits (CDB), you are automatically signed up for Original Medicare. You’ll get a Medicare insurance card when your Medicare benefits start, and you’ll be signed up for Medicare Part A Hospital Insurance and Medicare Part B Medical Insurance.

With Original Medicare, you can go to any hospital or doctor that accepts Medicare and is taking Medicare patients. Medicare comes up with an amount that it thinks is reasonable for a provider to charge for a service. It will help pay that amount for things that it thinks are reasonable and necessary.

What You Pay

Most people do not have to pay anything to get Part A (since you've already paid for coverage with your payroll taxes). Part B, on the other hand, requires you to pay a monthly premium, which is taken out of your SSDI check. In 2022, the premium for Part B is $170.10 or a bit less, depending on your situation.

Because Part B has a premium, you can decide not to keep Part B coverage, although two things are important to keep in mind about declining Part B:

• If you decline Part B at first, and then want to sign up for it later, you may have to pay a penalty.
• You might qualify for help with paying for the premium and other Part B costs. See DB101's section on Part B for more information on enrollment, premiums, and declining Part B coverage.

For certain Part A and Part B services, you'll pay a certain amount (a deductible) before Medicare will begin to help pay. You may also have to pay a certain amount (a copayment) or a percentage (coinsurance) for the service before Medicare will begin to help. If you get a service that Medicare doesn’t cover, you will have to pay for it yourself, unless you have other coverage.

DB101's sections on Medicare Part A and Part B provide more details on what services Medicare will help pay for and what portion of the bill Medicare will pay.

If you want services that Original Medicare doesn't help pay for, you can pay out of pocket for those services. In this situation, some doctors may ask you to sign a private contract, which means that you agree that Medicare won’t help pay for any services you get from that provider.

Before signing a private contract, make sure that you understand what it means. If you need help understanding it, call the Health Insurance Counseling and Advocacy Program (HICAP) at 1-800-434-0222.

Appeals

You may think that Medicare should have helped pay for a service that they didn't help with, or that they should have paid more than they did. When you disagree with the amount that Medicare helped pay, you can file an appeal.

For people in Original Medicare, you can file an appeal by following the instructions on your Medicare Summary Notice. You have 120 days from the time you receive your notice to file an appeal.

When you receive care from a hospital, Skilled Nursing Facility, home health agency, comprehensive outpatient rehabilitation facility, or hospice care, you might be able to file a fast appeal if you think your services are ending too soon.

Your provider will give you instructions on how to file a fast appeal, but you can also get information on Original Medicare Appeals from the California Health Advocates' website.

Prescription Drug Coverage

With Original Medicare, you have to decide whether or not you want to get Medicare’s Prescription Drug Coverage, which is known as Part D.

Medicare Part D is offered through private companies that have agreed to follow Medicare's rules. You pay premiums, coinsurance, and copayments, although help is available for those who can’t afford these costs. DB101's section on Part D goes into more detail.

Medigap

As you learn more about Original Medicare (Medicare Parts A and B), you’ll notice that there are certain things that it will not pay for.

Medigap policies (also called Medicare Supplemental Insurance Policies) are private health insurance policies that can help pay for these gaps in Original Medicare coverage. These policies are offered by licensed insurance companies. The California Department of Insurance is in charge of making sure these companies follow the rules.

To buy a Medigap policy, you must have both Medicare Parts A and B. In general, Medigap policies do not provide any Medicare Part D Prescription Drug Coverage. The California Health Advocates' website has an excellent description of Medigap in California.

Medicare and Other Health Coverage

When you get Medicare, you may already have health coverage from another source. In some cases, this other health coverage can help pay for costs that Medicare doesn’t pay for.

One source of other coverage might be from an employer. If you’re still working, this could be coverage from a current employer. If you’ve stopped working, you may have coverage from an employer through COBRA or Cal-COBRA, which may allow you to keep health coverage from a former employer for 36 months or more after you leave a job. You may also have coverage through a spouse’s employer.

Besides employer sponsored coverage, there are a number of other types of coverage that interact with Medicare. These include retiree benefits, Veterans (VA) benefits, military (TriCare) benefits, and individual health insurance. The rules for how Medicare interacts with other health coverage can be complicated. California Health Advocates has more information on these rules.

Another source of coverage is Medi-Cal, which helps people with low income pay for medical expenses. You can be on both Medi-Cal and Medicare at the same time. When you see a provider for health care, make sure that they accept both Medi-Cal and Medicare.

Medi-Cal interacts with Medicare in a number of ways:

• Generally, Medicare gets the bill for the service first and pays for whatever it covers. Medi-Cal then pays for the remainder.
• For people on Medicare and Medi-Cal, there are special rules about choosing, signing up for, and getting help paying for Part D Prescription Drug Coverage. See Part D for more information.
• Medi-Cal may help pay for some of your Medicare costs, like Part B premiums. See Part B for more details.
• DB101's section on Medi-Cal has more information on the Medi-Cal program.

How Medicare Benefits Might Change Over Time

Transition from SSDI to Retirement Benefits

If you are under 65 and getting benefits because of a disability, there are a number of different ways that your benefits could change over time.

For example, let’s say you are 50 years old and have been getting disability payments for the past 5 years and are currently on Medicare Parts A and B through Original Medicare. One possibility is that you stay disabled and can’t ever return to work. In this scenario, your disability benefits would continue until you reach full retirement age, at which point your SSDI would automatically change to retirement benefits. Your Medicare benefits wouldn’t change.

Returning to Work

Another possibility is that you return to work before you reach what Social Security considers your full retirement age. When you go back to work, you may eventually lose your free Part A coverage. This doesn’t happen until almost 8 years after you go back to work and, once it does, you may be eligible to have the state pay for Part A coverage. See Part A and Returning to Work for more details.

Changing Your Medicare Coverage

Another possibility is that you will want to change your Medicare options. You may, for example, want to switch to Medicare Part C (Medicare Advantage), buy a Medigap policy, or enroll in Parts B or D.

Sources

The following links are provided for those who want detailed information on Medicare. For those looking for more general information, please go to the Medicare Resources Page.

Medicare and You from the Centers for Medicare and Medicaid Services gives an excellent overview of Medicare benefits.

Social Security’s website provides general information for Medicare beneficiaries and has access to more detailed information for providers and advocates.

California Health Advocates is an excellent website that gives detailed information for both consumers and advocates on all aspects of the Medicare program.

Eligibility through SSDI

After you get your first Social Security Disability Insurance (SSDI) payment, you have to wait two years before your Medicare benefits begin. Around the 20th month after getting an SSDI (or CDB) benefit, you should get a notice in the mail telling you that your Medicare benefits are going to start soon.

You will automatically be signed up for Medicare Part A, and you won’t have to pay a premium for it. You’ll also get a card in the mail that says that you are entitled to Medicare Part A. The card may also say you’re entitled to Medicare Part B.

Other Ways to Qualify

For those who are under 65, you can get Medicare Part A without paying a premium if you are in one of the following categories:

• You get or are eligible for SSDI or Childhood Disability Benefits (CDB).
• You get or are eligible for Railroad Retirement Board disability benefits.
• You have End Stage Renal Disease (kidney dialysis or transplant patients) and meet certain requirements.
• You have Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig’s Disease).
• You have worked in a government job and meet the requirements for SSDI.

In some cases, if they have a disability, widows and widowers, divorced widows and widowers, and children may be eligible for Medicare.

For those who are 65 and older, you can get Medicare Part A without a premium if you are in one of the following categories:

• You get or are eligible for Social Security retirement benefits.
• You get or are eligible for Railroad Retirement Board retirement benefits.
• You have worked in a government job that qualifies you for Medicare.

In some cases, spouses, divorced spouses, widows, widowers, and parents may be eligible based on their work record when they turn 65.

If you are over 65 and don’t qualify for free Part A, you can pay a premium for it.

The Benefit

Medicare Part A helps pay for:

Care You Get When Admitted to the Hospital

Part A will help pay for a semi-private room, general nursing, meals, drugs that you get as an inpatient, and other services and supplies. This includes mental health care in a hospital or specialty psychiatric hospital.

Short-term Stays in a Skilled Nursing Facility

Part A will help pay for your stays at Skilled Nursing Facilities, where you get daily skilled care from nurses or rehabilitation specialists. You can think of this as short-term care you get after you’ve been stabilized in a hospital.

Examples of skilled nursing care include intravenous injections, changing sterile dressings, and physical therapy a minimum of five times per week.

A medical social worker can help you when you move back home. Skilled nursing does not include what Medicare calls “custodial care” which is help with daily tasks like walking, eating, or bathing.

Hospice Care

Hospice care is care that you receive when you have a terminal diagnosis. Medicare Part A will help pay for drugs and other support services when, according to your physician, you have six months or less to live. If you live beyond six months, your hospice benefits can be extended.

Home Health Care Services

Medicare certifies some agencies to provide home health care services. These are things like nursing services and physical, occupational, and speech therapy that you get in your home. Home Health Agencies also might help pay for medical social services or equipment like wheelchairs, beds, and walkers to use at home.

Blood

Usually hospitals get blood at no charge. If they do have to buy blood for your transfusion, Medicare will help after you’ve paid for the first three pints of blood.

Medically Necessary Coverage

As with other aspects of the Medicare program, Part A's general guideline is that it will help pay for what is medically necessary. Having a television in your hospital room, for example, is not considered medically necessary, so Medicare won’t pay for it.

Medicare does not generally help pay for long-term care. Long-term care usually includes help with things like bathing, getting dressed, and using the bathroom. You might get this help in your home, somewhere in the community, or at a Skilled Nursing Facility. Medi-Cal may help pay for these costs if you qualify.

The California Health Advocates website has an excellent section on long-term care.

What You Pay

Medicare Part A doesn’t pay for 100% of your expenses. The services it pays for, and the percentage of the cost it covers, depend on what services you get and when you get them.

Hospital Stays

Let’s say that you have Medicare Part A and have never been in the hospital before. You get sick and are admitted to a hospital for 100 days. The rules for how much you have to pay and how much Medicare will pay change throughout your stay.

For days 1 – 60, you’ll have to pay a total of $1,556 before Medicare will begin to help pay for your costs. After that, Medicare will pay for all of your reasonable and necessary hospital costs for days 1 – 60.

For days 61 – 90, you will have to pay $389 per day, and Medicare will pay for the rest of your reasonable and necessary costs.

After the 90 days are up, you have two options:

• Option 1 is to use one of your lifetime reserve days. You get 60 of these days over the course of your life. With your lifetime reserve days, you pay $778 per day and Medicare pays for the rest of your reasonable and necessary costs for those days.
• Option 2 is to pay for the cost yourself and not use up one of your lifetime reserve days. Let’s say that you decide to use 10 of your lifetime reserve days.

What if you have to go back to the hospital?

This is when the concept of a benefit period comes into play. A benefit period ends when you haven’t been to the hospital (or Skilled Nursing Facility) for 60 days in a row.

The rules above actually apply to days within a benefit period. Continuing the example above, let’s look at two scenarios:

1. Scenario One: You’re released from the hospital, but have to return a week later for another 10 day stay.
2. Scenario Two: You’re released from the hospital, but have to return 61 days later for another 10 day stay.

You can have an unlimited number of benefit periods in your life. The exception is that you can only have a lifetime total of 190 days in an inpatient psychiatric hospital.

Skilled Nursing Facilities

Let’s say that you were hospitalized for a stroke and need to go to a Skilled Nursing Facility for rehabilitation. In order for Medicare to help pay for the Skilled Nursing care, you have to have been in a hospital for a related illness (in this case the stroke) for at least 3 days, not including the date you were discharged from the hospital.

If you meet that requirement, are admitted to a Skilled Nursing Facility within 30 days of hospital discharge, and receive daily skilled nursing or rehab services, for each benefit period Medicare will pay for:

• All covered costs for days 1 – 20.
• Costs for days 21 – 100 (except for the first $194.50 each day – you pay for that).
• Nothing after day 100.

Other Medicare Part A Services

For hospice care, you pay $5 for outpatient prescription drugs and 5% of the costs for respite care.

For home health care, Medicare pays for the entire approved amount of home health services and 80% of the costs of durable medical equipment.

For blood received as an inpatient that the hospital has to buy, you have to pay the entire cost of the first three pints. After that, Medicare will pay for 80% of the cost of subsequent pints. Usually, hospitals don’t have to buy blood, so you don’t get charged. Another option is to donate pints to replace the blood you need.

Help Paying for Part A Costs: Medicare Savings Programs

If you have low income and assets, you may be eligible to have California's Medi-Cal program pay for some of your Medicare Part A costs through a Medicare Savings Program.

The Qualified Medicare Beneficiary (QMB) program pays for Medicare Part A and Part B premiums, coinsurance, copayments, and deductibles. To qualify, you must:

• Be eligible for or enrolled in Medicare Part A;
• Have countable income at or below 100% of the Federal Poverty Level ($1,074 per month, $1,452 for couples);
• Have assets at or below the limit ($8,400 for individuals, $12,600 for couples); and
• Meet all other Medi-Cal eligibility requirements.

This program does not apply benefits retroactively, which means that you can’t get help paying for costs for past months.

The Qualified Disabled Working Individual (QDWI) program pays for Medicare Part A premiums. The QDWI program is for Social Security Disability Insurance (SSDI) beneficiaries who lose their free Medicare Part A because they are earning too much money. To qualify, you must:

• Be less than 65 years old;
• Be eligible for Medicare Part A;
• Have countable income at or below 200% of the Federal Poverty Level ($2,147 per month, $2,904 for couples);
• Have assets at or below the limit ($4,000 for individuals, $6,000 for couples), and
• Meet all other Medi-Cal eligibility requirements.

For both programs, it is important to know that not all of your income counts. The same is true for your assets. The home where you live, burial funds, and your car, for example, don’t count as assets.

Call your county Health Insurance Counseling & Advocacy Program (HICAP) office to learn more about whether you qualify for a Medicare Savings Program. If you do, they'll explain how to apply at your local county social services agency.

Part A and Returning to Work

If people under 65 who are getting Part A through SSDI don’t go back to work, their SSDI automatically changes to retirement insurance when they reach their full retirement age. They get to keep their free Medicare Part A. But, if you go back to work earlier, things can change before then.

A Trial Work month is any month that an SSDI recipient works and earns over a certain amount ($970 in 2022).

The rules about your Medicare coverage are directly tied to SSDI’s work rules. SSDI allows you to attempt to return to work without losing your benefits. First, you get a Trial Work Period. Once you use 9 Trial Work months, your Trial Work Period is over. See DB101's SSDI Work Rules Focus for a detailed example of how the Trial Work Period works.

The end of your Trial Work Period is an important marker in terms of your Medicare coverage. After your Trial Work Period, you get 93 more months (almost 8 years) of premium-free Medicare Part A coverage, as long as Social Security finds that you still have a medical disability.

The actual date that your Medicare ends depends on how much you are earning in the period after your Trial Work Period, but it will be at least 93 months as long as you are still medically disabled.

Even after you lose your premium-free Part A coverage, you can decide to pay the Part A monthly premium ($499 in 2022) to keep your coverage. If your income and assets meet certain limits, you may be eligible to pay a lower premium or to have Medi-Cal pay for your Medicare Part A premium through the Qualified Medicare Beneficiary (QMB) program. If you do have to pay a premium, it will be lowered to $274 if you were employed for long enough.

Eligibility and Enrollment

As with Medicare Part A, you automatically get Medicare Part B after you have had Social Security Disability Insurance (SSDI) benefits or Childhood Disability Benefits (CDB) for 24 months.

Around the 20th month of getting an SSDI or CDB benefit, you should get a notice in the mail telling you that your Medicare benefits are going to start soon. See the DB101 section on Part A for more details on enrollment.

One of the big differences between Parts A and B is that you generally have to pay a premium for Part B. With this in mind, you don’t have to keep Part B.

When you get your notice about Medicare benefits, there will be information on how to decline Part B. Keep in mind that you may be eligible for programs that help pay the Part B premium and that if you decline Part B coverage when it’s first available, you may have to pay higher premiums when you do sign up.

The Part B premium is generally taken out of your SSDI check. In 2022 the premium is $170.10 or a bit less, depending on your situation. If your income is over $91,000, your premium will be higher.

The Benefit

Medicare Part B helps pay for medical care when you’re not in the hospital. Under certain circumstances, it will help pay for:

• Outpatient care: Doctor and practitioner services; Emergency Room services; Outpatient Hospital services; Medical and surgical services and supplies; Mental health care, rural health clinic and federally qualified health center services, Urgent care.
• Home Health Care
• Screening exams: Abdominal aortic aneurysm; Bone mass measurement; Cardiovascular; Colorectal; Diabetes; Glaucoma; One physical for new Medicare enrollees; Mammograms; Pap tests; Prostate exams.
• Procedures and Tests: Blood transfusions; Clinical laboratory tests; Other diagnostic tests like X-rays, MRIs, CTs, EKGs, etc.
• Supplies and Equipment: Diabetes supplies; Durable medical equipment for use in the home; Kidney dialysis equipment; Prosthetics and orthotics.
• Rehabilitation: Occupational, speech, and physical therapy.
• Immunizations: Flu; Hepatitis B; Pneumococcal.
• Some services only in very specific situations: Chiropractic; Eye exams; Eyeglasses for specific medical conditions; Diabetes self-management, Foot exams and foot treatment for diabetes; Hearing and balance exams; Injectable cancer or immunosuppressive drugs; Health care in Canada under rare circumstances.
• Other services: Ambulance transport; Ambulatory Surgery Center fees; Clinical research studies; Medical nutrition therapy; Second surgical opinions; Smoking cessation; Surgical dressing services; Telemedicine; Transplant care.

What Medicare Part B Will Pay For

For the most part, Medicare Part B will only help pay for the above services in certain situations. Medicare’s general rule is that it will only pay for things that it finds medically necessary.

Medicare’s general rule is that it will only pay for things that it finds medically necessary.Part B may only pay for some things if you have certain risk factors, or it might only help pay for a certain number of things in a given time period (like once every five years, for example). Other services are offered every year.

The equipment and supplies must be bought through a certified Medicare supplier.

Some services are only covered in very specific situations. For example, Medicare Part B will pay for eyeglasses only if you need them after a specific type of cataract surgery.

How Much Medicare Part B Will Pay

In addition to the monthly Part B premium, you may have to pay other costs for the services described above. Medicare has rules about how much it will pay for each of the Part B services.

Medicare will pay the entire costs of some services, like flu shots.

For other services, like mental health, Medicare will pay for 80% of the cost.

For most services, Medicare will pay for 80% while you pay the remaining 20% . This is called coinsurance.

For most Part B services, Medicare will help pay only after you’ve spent a certain amount of money for the year on medical services. This is the yearly deductible, and it’s $233 in 2022.

Medicare and You has an excellent list that tells you when Medicare will pay for the above services and the percentages of each service that it will pay for.

The above description describes the Part B benefit under Original Medicare. Some of the coinsurance, deductible, and copayment costs might be paid for by a Medigap policy, a Medicare Savings Program, Medi-Cal, or an employer's plan.

Help Paying for Part B Premiums and Costs: Medicare Savings Programs

There are three Medicare Savings Programs that can help pay for Part B costs:

Qualified Medicare Beneficiary (QMB)

The Qualified Medicare Beneficiary (QMB) program pays for Medicare Part A and Part B premiums, coinsurance, copayments, and deductibles. To qualify, you must:

• Be eligible for or enrolled in Medicare Parts A and B;
• Have countable income at or below 100% of the Federal Poverty Guidelines (FPG) ($1,074 per month, $1,452 for couples);
• Have resources at or below the limit ($8,400 for individuals, $12,600 for couples); and
• Meet all other Medi-Cal eligibility requirements.

This program does not apply benefits retroactively, which means that you can’t get help paying for costs for past months.

Specified Low-Income Medicare Beneficiary (SLMB)

The SLMB program pays for Medicare Part B premiums. To qualify, you must:

• Be eligible for Medicare Parts A and B;
• Have countable income at or below 120% of FPG ($1,289 per month, $1,742 for couples);
• Have resources at or below the limit ($8,400 for individuals, $12,600 for couples), and
• Meet all other Medi-Cal eligibility requirements

The SLMB benefit can help pay for costs that you had starting three months before the month you applied.

Qualified Individual (QI)

The QI program pays for Medicare Part B premiums. To qualify, you must:

• Be eligible for Medicare Parts A and B;
• Have countable income at or below 135% of FPG ($1,449 per month, $1,960 for couples);
• Have resources at or below the limit ($8,400 for individuals, $12,600 for couples); and
• Meet all other Medi-Cal eligibility requirements.

The QI benefit can help pay for costs that you had starting three months before the month you applied. There are only a limited number of QI slots available each year, and they are filled on a first come, first served basis.

For Medicare Savings Programs, it’s important to know that not all of your income counts. The same is true for your assets. For example, the home you live in and the car you drive to work don’t count as assets.

Call your county Health Insurance Counseling & Advocacy Program (HICAP) office to learn more about whether you qualify for a Medicare Savings Program. If you do, they'll explain how to apply at your local county social services agency.

Other Help from Medi-Cal

If you’re not in a Medicare Savings Program, Medi-Cal may pay for some of your Medicare Part B costs. Medi-Cal will pay your Part B premiums if:

1. You have Medi-Cal with no share of cost. This includes people who receive Supplemental Security Income (SSI), or who are in the Working Disabled Medi-Cal program; or
2. You have a Medi-Cal share of cost of $500 or less; or
3. You meet your Medi-Cal share of cost in a month; or
4. You are in long-term care and are certified as Medi-Cal eligible on the first of each month.

For people with a Medi-Cal share of cost over $500, the rules about how Medi-Cal helps with Part B premiums changed in November 2008. For months when you meet your share of cost, Medi-Cal will pay your Part B premiums. For months when you don’t meet your share of cost, Medi-Cal will not pay your Part B premiums.

Declining Part B Coverage

You can decline Medicare Part B coverage if you can’t get another program to pay for it and you don’t want to pay for it yourself.

The important thing to know about declining Part B coverage is that if you decline it and then decide that you want it later, you may have to pay a higher premium. Whether or not you will have to pay this penalty depends on whether or not you have other health insurance when you decline Part B coverage. If you don’t have other insurance, you’ll have to pay an additional 10% on your premium for every full year that you decline Part B coverage. In 2022, the Medicare Part B premium is $170.10 or a bit less per month, depending on your situation. It's higher if your annual income is over $91,000.

If you decline Part B coverage when it’s first offered, you can only sign up during certain times:

• You can sign up between January 1 and March 31 of each year, which is known as the General Enrollment Period. Your Medicare Part B coverage will not begin until July 1 of that year. Again, you will have to pay a higher premium in some cases.
• If you originally declined Part B because you had group health coverage through a job or spouse’s job, you can sign up for Part B when you lose that coverage. You have 8 months starting in the month when the job ends (or from when you lose your coverage – whichever comes first). If you sign up in those 8 months, you won’t have to pay a penalty.

How Medicare Part C is Different from Original Medicare

One way to get Medicare coverage is through Original Medicare (Medicare Parts A and B). With Original Medicare, you:

• Get Part A Hospital Insurance, and, if you want, Part B Medical Insurance.
• Can choose to enroll in a separate plan to receive Part D Prescription Drug Coverage.
• Can go to any hospital, doctor, or pharmacist that accepts Medicare.
• Can also buy a Medigap policy to help pay for the things that Original Medicare doesn’t cover.

A different way to get Medicare coverage is through a Medicare Advantage plan, also known as Medicare Part C.

With a Medicare Advantage plan, you get your Medicare benefits through a private company that has agreed to rules set out by the Medicare program. As long as they obey these rules, the companies have flexibility in what additional benefits they offer, how they organize payments, and how much the plan costs.

The amount you pay depends on your plan, but most plans in California make you pay the Part B premium and more premiums for extra benefits and Part D Prescription Drug Coverage. You may still be eligible for help paying for your premiums with a Medicare Savings Program.

Services Covered

Medicare Advantage plans have to help pay for all of the services that Original Medicare covers. Often, they’ll help pay for extra services. For example, with a Medicare Advantage plan, you might get help paying for preventive check-ups, hearing exams, and other services that the Original Medicare plan doesn’t cover.

With most Medicare Advantage plans, you may not have as much flexibility as you would with Original Medicare, but the amount you pay may be lower. For example, some Medicare Advantage plans may make you use certain doctors and hospitals, or may require that you see a primary care physician before seeing a specialist.

If you enroll in a Medicare Advantage plan, all of your Medicare benefits are paid for by that plan, not by Original Medicare. You can either have Original Medicare or a Medicare Advantage plan, but not both.

It’s important to note that Medicare Advantage plans are not Medigap policies. You do not need to have both a Medicare Advantage plan and a Medigap policy. If you already have a Medigap policy when you sign up for a Medicare Advantage plan, you can keep it, although it won’t pay for Medicare deductibles, copayments, coinsurance, or premiums. If you drop your Medigap policy, you might not be able to get it back.

To file an appeal with a Medicare Advantage plan, see your plan’s instructions or contact the Health Insurance Counseling and Advocacy Program (HICAP) at 1-800-434-0222. The California Health Advocates website also has more information on Medicare Advantage appeals.

Specific Rules about Medicare Advantage and Prescription Drug Coverage

• Most Medicare Advantage plans offer Prescription Drug Coverage.
• If you sign up with a plan that offers Prescription Drug Coverage, you may have to pay a higher premium, although you may still be able to get help paying these premiums.
• If your plan offers Prescription Drug Coverage and you don’t accept it, in most cases, you cannot sign up for a different Part D Prescription Drug Coverage plan without leaving your Medicare Advantage plan.

Signing Up

In order to get a Medicare Advantage plan, you have to have Medicare Parts A and B, live in the plan’s service area, and generally can’t have End Stage Renal Disease. There are three time periods when you can sign up for a Medicare Advantage plan:

• You can first enroll in a Medicare Advantage plan during the 3 months before, the month of, and the 3 months after you first become eligible for Medicare.
• You can enroll in, drop, or switch plans from October 15 to December 7 each year, with benefits beginning on January 1 of the following year.
• You can also sign up from January 1 to March 31 of each year, but if you don’t already have a prescription plan, you can’t get a plan that offers Part D Prescription Drug Coverage.

The California Health Advocates website has more information on Medicare Advantage enrollment. You can also call the Health Insurance Counseling and Advocacy Program (HICAP) at 1-800-434-0222 for more information.

Types of Plans

There are five different kinds of Medicare Advantage plans, all of which are offered in California (although offerings vary by county). Each Medicare Advantage plan will be different, so be sure to contact the plan for more details.

To find out which specific plans are available in your area, visit the Medicare.gov website’s Medicare Plan Finder.

The five types of Medicare Advantage plans are:

Health Maintenance Organizations (HMOs)

HMOs have a network of doctors and facilities. In general, with HMOs, you choose a primary care physician from the plan’s network. When you have a non-emergency medical issue, you see your primary care physician who then provides care or refers you to another doctor in the network. In general, you can’t see doctors outside of your network and have the plan help pay for those costs.

Some plans have what’s called a Point-of-Service option, which allows you to see out of network doctors for a higher cost. In general, if the plan offers Part D Prescription Drug Coverage, you don’t have to take it, but if you refuse, you won’t be able to get another Part D policy.

Preferred Provider Organizations (PPOs)

PPOs also have networks of doctors, but unlike HMOs, you don’t have to have a primary care physician, and you don’t need referrals to see a specialist. You can go outside the plan’s network if you are willing to pay more.

If the plan offers Part D Prescription Drug Coverage, you don’t have to take it, but if you refuse, you won’t be able to get another Part D policy.

Private Fee-for-Service

These plans have certain rules that they, rather than Medicare, make up. For example, a Private Fee-for-Service plan may only pay a certain amount of money for a specific procedure. To get medical care using a Private-Fee-for-Service plan, you would go to a Medicare-approved doctor or hospital. If they agree to the plan’s terms, the plan will help pay for those medical services.

But not every doctor or hospital will agree to the terms and they can decide on a visit-by-visit basis. So it’s important to find out if they agree to the terms before you get care.

Emergency care is covered even if the doctor or hospital doesn’t agree to the terms.

Not all Private Fee-for-Service plans offer Prescription Drug Coverage. If yours doesn’t, you can sign up for a stand-alone Part D plan. Medicare's "Your Guide to Medicare Private Fee-for-Service Plans" has more detailed information on these plans.

Medical Savings Accounts

These plans have a health plan and a savings account. The health plan has a high yearly deductible. Medicare gives the Medical Savings Account plan money each year and the plan puts some of that money into a bank account. You can use this money to pay for your health costs and when you get Medicare Part A or B services, the money you spend will count towards your high deductible. Once you meet the deductible, the plan will pay for your Medicare services.

You can’t be on Medi-Cal and have a Medical Savings Account at the same time. Medical Savings Accounts don’t offer Part D Prescription Drug Coverage, but you can sign up for a separate Part D plan. Medicare’s "Your Guide to Medicare Medical Savings Account Plans" has more information on these plans.

Special Needs Plans

These are Medicare Advantage plans that provide specialized care for specific groups. People who are eligible for both Medicare and Medi-Cal, live in institutions, or have certain specific conditions (like diabetes) may be eligible for Special Needs Plans. Read Medicare’s "Your Guide to Special Needs Plans" for more information on these plans.

Parts of Medicare Part D can be complex and confusing, even for people who have experience dealing with benefits. These sections will simplify and explain what Part D is, how to enroll, how much it will cost, and other topics.

What is Medicare Part D?

Medicare is a federal program that provides health insurance for people over 65 and many people under 65 who have a disability. It used to only help people pay for hospital care, doctor visits, and some other medical costs. In December of 2003, Congress passed the Medicare Modernization Act, which created Medicare Part D. This new program went into effect in 2006 and added prescription drug coverage to Medicare. It’s also known as Medicare Prescription Drug Coverage or Medicare Rx.

In the Part D program, private companies offer prescription drug coverage to people on Medicare. You must enroll in one of these private plans to get prescription drug coverage through Medicare. These plans have a list of drugs that they will help pay for if you sign up with their plan. Unless you qualify for help, you will generally have to pay a certain amount each month to be on the plan, a certain amount before the plan will help you pay for your drugs, and a certain percentage of the rest of the costs of your drugs. If you pay these costs, the plan will help pay for your prescription drugs when you buy drugs that are on the list. People who cannot afford these costs may get help paying for them through Low Income Subsidies. Every plan has to follow rules laid out by the Center for Medicare and Medicaid Services (CMS), but there’s a great deal of variety among the specifics of each plan.

People who are eligible for both Medi-Cal and Medicare have special rules for signing up, switching plans, and paying for costs.

What's Covered

Each prescription drug plan will have a list of drugs that they will help pay for if you sign up for that plan. This list is called a formulary. There are rules for types of drugs that must be on every plan’s formulary. CMS reviews formularies to make sure they have drugs to treat a wide range of conditions. Plans organize their formularies by categories of drugs, and they have to have at least two drugs from each category. They must include the majority of antidepressants, antipsychotics, anticonvulsants, antiretrovirals (HIV drugs), immunosuppressants, and antineoplastics (cancer drugs). They generally do not cover over-the-counter drugs, barbiturates, benzodiazepines, Valium, Xanax, non-prescription drugs, weight regulation drugs, or hair loss drugs. The prescription drug plans will not cover drugs that are covered under Medicare Parts A and B.

Cost

Unless you qualify for the Low Income Subsidy you will still have to pay part of the costs of your prescription drugs in this program.

Medicare has created guidelines for what it calls a basic plan. Under the basic plan, you have to pay a certain amount of money to be enrolled in a Prescription Drug Plan. This is your premium, which you have to pay every month, even if you do not buy any drugs.

When you do buy prescription drugs you first have to spend a $480 annual deductible. After you’ve spent that $480, the plan will pay for 75% of your drug costs.

Note: Companies that sponsor Part D plans might offer a number of different plans. Each company has to offer at least one plan that either meets the above guidelines for a basic plan or works out to costing the same amount of money. Many plans do not structure their cost-sharing as described above.

Help Paying for Part D: Low Income Subsidy

There is help available for people who cannot afford the costs of a Part D Prescription Drug Plan. This help is called the Low Income Subsidy or simply “Extra Help.” There are two levels of the Low Income Subsidy available: a full subsidy and a partial subsidy.

The Full Subsidy

You are eligible for the full subsidy if you are on Medi-Cal without a share of cost or are enrolled in a Medicare Savings Program.

People who aren’t part of these programs, but have yearly countable income less than $18,347 and assets less than $8,400 can also qualify for the full subsidy. For couples, the income limit is $24,719 and the asset limit is $12,600.

With the full subsidy:

• You will not have to pay any premiums as long as you are enrolled in a benchmark plan.
• You will not have to pay a deductible before you get help paying for drugs.
• There will not be any gap in which Medicare won’t help pay for your prescription drugs.
• Depending on your income, you will pay between $1.35 – $3.95 as a copayment for every generic drug prescription and between $4.00 – $9.85 for every brand name prescription you purchase.

The full subsidy will pay costs for basic plans that have a premium below a certain level. For California in 2022, this level is $33.16. These plans are called benchmark plans. In 2022, there are 5 benchmark plans offered in California.

Companies may also offer plans that have higher costs and offer more comprehensive coverage. If you are eligible for one of the subsidies, but choose to enroll in a plan with costs above the benchmark plan’s costs, you will have to pay the difference. The Low Income Subsidy will not pay for drugs that are not on your plan’s formulary, but you can always request an exception or pursue an appeal. It may be well worth your time to request an exception.

The Partial Subsidy

If you aren’t eligible for the full subsidy but you have less than $20,385 in annual countable income and less than $14,010 in assets, you may be eligible for a partial subsidy. For married couples who are living together, the countable income limit is $27,465 and the asset limit is $27,950. If you apply and qualify for the partial subsidy:

• You will pay 0%, 25%, 50%, or 75% of the premium to be enrolled in your Prescription Drug Plan. The percentage that you pay depends on your income.
• You will have to pay a $99 deductible before you get help paying for drugs.
• You will have to pay 15% of your drug costs after you’ve paid the deductible until you have spent $7,050 on prescription drugs covered by your plan.
• You will have to pay $1.35 – $3.95 for every generic drug prescription and $4.00 – $9.85 for every brand name prescription you purchase after you’ve spent $7,050 on prescription drugs covered by your plan.

Keep in mind that not all of your income is counted when your Low Income Subsidy eligibility is evaluated. Social Security has a summary of income and assets that don’t count. The income limits are based on the Federal Poverty Level and change each year. If your family size is greater than two, your income limits will be higher.

Applying for the Low Income Subsidy

The following groups of people are automatically signed up for the Low Income Subsidy:

• People with Medi-Cal without a share of cost
• People on a Medicare Savings Program
• People with Medi-Cal with a share of cost that they have met. Meeting your share of cost between January and June makes you eligible for the rest of that calendar year. Meeting your share of cost between July and December makes you eligible for the rest of that calendar year and the following calendar year.

Everyone else has to apply for the subsidy. This includes:

• People who haven't met their Medi-Cal share of cost and
• People not on Medi-Cal who might be eligible for the subsidy because they have low income and assets.

These groups apply by filling out the online application, the form that Social Security mailed, or by visiting your local Social Security office.

Choosing a Plan

There are two types of Part D coverage. One is through plans that only offer drug coverage. These are called Prescription Drug Plans (PDP) or stand-alone plans. You have to be enrolled in either Medicare Part A, Part B, or both to enroll in a PDP. There are dozens of PDPs in California, and they are available throughout the state.

The other way to get Part D coverage is through Medicare Advantage plans. These are Medicare plans that are run by private insurance companies. Some of these plans now offer prescription drug coverage as part of their benefit. These are known as Medicare Advantage – Prescription Drug (MA-PD) plans. Be aware that some MA-PDs allow you to have a separate stand-alone plan, while others don’t. Check the details of your plan before enrolling in a stand-alone plan. You have to be eligible for Medicare Part A and enrolled in Part B to be eligible for an MA-PD. There are numerous MA-PD plans in California. The number offered varies by county.

Because of the number of plans offered and the complexity of the rules, it can be difficult to choose the plan that is right for you. There are a number of things to keep in mind when deciding whether to sign up for a Part D plan:

• If you are eligible for both Medi-Cal and Medicare, you can choose a plan when you are first eligible. If you don’t, you will be automatically assigned one. This plan might not have the drugs you need.
• If you are not on both Medi-Cal and Medicare and you receive the Low Income Subsidy, you have two months after you become eligible for the Subsidy to sign up for a plan, otherwise you will be automatically enrolled after those two months. This is known as facilitated enrollment.
• For others, Medicare Part D is voluntary, which means that you don’t have to sign up.
• You may already have drug coverage through your own private health coverage plan. You may be better off staying on that policy rather than switching to Part D.
• If you have other coverage that is at least as good the basic coverage offered under Medicare Part D, it’s what is called creditable coverage. If you don’t have creditable coverage and don’t sign up during your initial enrollment period, there is a penalty. In some cases, it is worthwhile to sign up for an inexpensive plan so that you can avoid these penalties.
• If you have creditable coverage, you can switch to Part D after the initial enrollment period without paying any penalties.
• Each plan is different. You can see which plan best meets your needs by figuring out what drugs you are currently on. It can be helpful to make a list of the brand name, generic name, dosage amount, dosage schedule, cost, and possible substitutes for each drug you take.
• One place where you can compare drug plans is on the CMS website’s Prescription Drug Plan Finder.

Signing Up for a Plan and Switching Coverage

Once you choose a plan, you can sign up on the Medicare website, by calling 1-800-MEDICARE, or by contacting the plan directly. For those who are not on Medi-Cal, you can sign up in the three months before, the month of, or the three months after you become eligible for Medicare. This is called your initial enrollment period. If you don't have creditable coverage, and sign up after this period, you may have to pay a penalty. You will have to pay an extra 10% of your premiums for every month past your initial enrollment period that you didn’t sign up for Part D. You can switch (or sign up) for plans every October 15 to December 7. This is called the annual election period.

If you are on both Medi-Cal and Medicare, the rules are different, and depend on which Medi-Cal category you’re enrolled in.

• For those on most types of Medi-Cal, you will be automatically enrolled in a PDP in the month that you become dually eligible. You will be enrolled in a benchmark plan without regard to what medications you are taking. You can, however, switch drug plans at any time, and that switch will become active in the following month.
• If you are on Medi-Cal with a share of cost, you will be automatically enrolled in the month following the first month you meet your share of cost. You can only switch plans during months when you meet your share of cost. If you lose your Medi-Cal because you don’t meet your share of cost, you have a special three month enrollment period when you can switch plans.
• If you are participating in a Medicare Savings Program, you will be automatically enrolled, but you will first have a two month window when you can choose your plan. This is known as facilitated enrollment.

There may also be certain situations in which you are entitled to a special enrollment period. You would be allowed to change plans outside of the periods outlined above under such circumstances.

Getting the Drugs You Need

The drug plans can change the drugs that are on their formulary as long as they give 60 days notice. If you and your doctor think that you need a drug that’s been taken off of your formulary, or need a drug that isn’t currently on your formulary, you have a few options. You can ask the plan to cover the drug for you. This is called an exception. Your doctor will have to prove to the plan that you need that particular drug. If the plan denies your application for an exception, you can appeal that decision.

• Your appeal will first be heard by another person within the health plan.
• If they deny your appeal, you can take it to an Independent Review Entity, which is a person outside of the plan.
• If they deny your appeal, you can appeal that decision to an Administrative Law Judge.
• If the Judge denies your appeal, you appeal that decision to the Medicare Appeals Council.
• If they deny your appeal, you can appeal that decision to Federal Court. Under certain circumstances, you may ask for an expedited (faster) review. The plan you are enrolled in is required to give you details about the appeals process.

Another option is to switch to a plan that has the drug you need on its formulary. If you are on Medi-Cal and Medicare or on a Medicare Savings Program, you are allowed to change plans every month. If you are not on Medi-Cal and Medicare, you can usually only switch drug plans from October 15 to December 7 of each year.

Even if a drug is on a formulary, you may not be able to use it right away. Drug plans have rules for how you can get drugs so that they can keep costs down. These rules are called utilization controls. Some examples include:

• Prior Authorization Requirements: The plan has to approve a certain drug before they will pay for it.
• Tiered drug levels: It may be cheaper to buy certain drugs than others.
• Rules on dosages and quantities: They may limit how much of a certain drug you can buy.
• Fail-First Rules: You may have to try a less expensive version of a certain type of drug before trying more expensive options.

Sources

The following links are provided for those who want detailed information on Medicare Part D. For those looking for more general information, please go to DB101’s Medicare Resources page.

California Health Advocates is a website that gives detailed information for both consumers and advocates on all aspects of the Medicare program. Their Part D Low Income Subsidy fact sheet gives detailed information on eligibility and cost sharing.

Robert’s Story

Robert is a 38 year-old paraplegic. He’s been receiving a Social Security Disability Insurance (SSDI) benefit for eighteen months and is starting to think about his health care options. He’s currently paying for private coverage, which is expensive, and he knows he’ll be eligible for Medicare after he’s been on SSDI for two years.

Robert has about $15,000 in assets so he knows he’s not eligible for Medi-Cal or a Medicare Savings Program. This is unfortunate because a Medicare Savings Program would have helped him pay for his Medicare coverage once he got it. And having Medi-Cal and Medicare together would provide more comprehensive coverage than just having Medicare alone.

Four Parts of Medicare

Robert does some research and learns that there are four “parts” of Medicare. Medicare Part A would help pay for his medical expenses if he had to stay in the hospital; Part B would help pay for his medical expenses outside the hospital; and Part D would help pay for his prescription drugs. Part C, also known as “Medicare Advantage,” would be a way for him to receive the services covered under Parts A, B, and D through a private company.

Although he’s not currently working, Robert has worked in the past and paid Social Security and Medicare taxes. This means he would not have to pay a premium for Part A, which is good news. The Part A premium can be as high as $499 per month. He would, however, have to pay for Part B coverage. The premium for Part B is $170.10 per month in 2022. Had he qualified for a Medicare Savings Program, his Part B coverage might have been paid for by one of those programs. But because his assets are too high, he’ll have to pay the Part B premium on his own.

Prescription Drug Coverage

Robert takes several different medications, so he definitely needs Part D Prescription Drug Coverage. He will have to sign up for a Medicare drug plan with a private company to get coverage. Robert reads up on Part D and learns that all Part D plans are privately run, but they must follow some basic rules set by the government. Robert has to pay a monthly premium for his coverage, an annual deductible, and copayments or co-insurance for his medications.

Robert takes four different medications and he knows they aren’t cheap, so he starts to worry, until a friend tells him that some companies may offer better Part D plans for Robert’s needs. Robert checks the Medicare Plan Finder and finds a few Part D plans that sound good to him. He chooses one that isn’t too expensive and that covers the prescription drugs he needs.

A friend tells him that this is the minimum coverage that companies have to provide and that some companies may offer better Part D plans. He does some research and finds a few plans that are a little more affordable, but still not ideal given his medication needs. He starts adding up his expenses under Medicare and he becomes worried. He’d be spending at least $2,000 per year on his prescription drugs. He’d also have to pay the $170.10 Part B monthly premium, not to mention the deductibles and coinsurance he might have to pay for Part B services.

That’s when Robert gets serious about Medicare Part C, also known as Medicare Advantage. If he enrolls in a Medicare Advantage (Part C) plan, he might be able to access all the services he needs under the different parts of Medicare at a lower price. He calls the Health Insurance Counseling and Advocacy Program (HICAP) at 1-800-434-0222, and they help him find a plan that will cover the costs of his Medicare expenses at a cheaper rate than what he’d pay under Original Medicare.

While he’s researching his Medicare options, Robert learns of a special program called the Working Disabled Program. Under this program, Robert may be able to qualify for Medi-Cal when he starts working. He knows that with both Medicare and Medi-Cal coverage, he’ll pay less for his medical care and prescription drugs. Robert wants to go back to work part-time in the future. He makes a note to himself that when he starts working, he should go to his county Medi-Cal office to learn more about the Working Disabled Program.