Medicare is complex. You have options. Here are the three options you have to get benefits and avoid penalties. Let’s start by defining a few terms.
Medicare Part A is the benefit for hospitals and other inpatient health services. If you have paid into Medicare for the required amount of time, you are eligible to get Part A at no cost. If not, there may be a premium for Medicare Part A.
Medicare Part B is the benefit for doctors and outpatient services. There is a monthly premium for this benefit. In 2024, the premium is $174.70. If you don’t have other coverage and don’t sign up for Part B when you first become eligible, you may incur a Late Enrollment Penalty.
Medicare Part D is the plan chosen to assist with the cost of medication throughout the year. To avoid a penalty, one must enroll in a Part D plan within 63 days of losing coverage or from the date of turning 65.
Medicare Supplement is an insurance plan purchased to avoid the copays and sometimes deductibles outlined by Medicare. They are policies one can purchase from a private insurance company.
Late Enrollment Penalty is the money charged by Medicare as a permanent penalty for not enrolling in Medicare Part B or a Medicare Prescription Drug Plan when you are first eligible and no longer have health coverage from another source, such as an employer. The Part D penalty is paid monthly and is calculated by multiplying 1% of the "national base beneficiary premium" ($34.70 in 2024) ($36.78 in 2025) times the number of full, uncovered months you didn't have Part D or creditable coverage. The monthly penalty is added to your monthly Part D premium.
The Part B permanent penalty is calculated the same way; 1%x174.70xmonthls without part B benefit.
You may be able to avoid a late enrollment penalty by qualifying for the Extra Help program.
Medicare A, B and D only. This choice will allow you to gain the benefits of Medicare along with deductibles and copayments. The deductibles for Part A are $1632 per benefit period for hospitalization. Part B has a deductible of $240 for the year. Parts A and B also will have a 20% copay with Medicare paying the remaining 80%. This may be a small amount for a doctor’s visit but could be substantial for a hospital stay. Purchase of a Part D Prescription Drug Plan would also be recommended to avoid a late enrollment penalty.
Medicare A, B and D with a Medicare Supplement. The above description applies, but the Supplement would pay the 20% copayments and in some cases the deductibles, depending on plan choice.
Medicare Part C, also called a Medicare Advantage Plans. These plans are offered by private insurance companies and combines Parts A, B D and often other benefits. These plans can often be found for a $0 premium.
It is important to consider all options available and determine which might be best in your circumstances. Medicare can be complex. Consult with a Licensed and Certified Insurance Professional to discover which option might fit you best.
This article is for information only and should not be considered a recommendation. Talk with a licensed Health Insurance Professional about your specific circumstances. For more information you can go to The Texas Department of Insurance.
