Question: I am 56 years old and eligible for Medicare due to a disability. Do I need Medicare Part A & B? Do I need Medicare Part D as well?

Answer: Congratulations on being eligible for Medicare. You will now have comprehensive insurance to help cover your medical costs.

When a person qualifies for Social Security Disability and has received those benefits for 24 months, they are automatically enrolled into Medicare. They generally receive their Medicare card about three months before the coverage will begin. Medicare always begins the first of the month.

Medicare Part A is hospitalization coverage. Medicare Part B is outpatient coverage and Medicare Part D is for Prescription drugs. All three of these “Parts” have different rules and costs.

Medicare Part A is free to you as long as you have worked 40 quarters or ten years.

Medicare Part B is optional coverage. If you start it when first eligible, you will pay a monthly premium (in 2023 that is $164.90 for most individuals) for this benefit and it comes directly out of your monthly Social Security benefit. If you have creditable coverage from another source (like an employee plan), you may not need to start Medicare Part B when first eligible.

Some individuals in your situation have been without insurance up until Original Medicare Insurance is available to them. Those individuals keep their Medicare cards, and then review the many additional insurance products that accompany Original Medicare, including Part D options. They can sign up for those additional products prior to or up to three months after their Medicare A & B begin, but I don’t recommend waiting.

In order to answer your question about needing Medicare A, B & D, we must first review what your current insurance is and how that influences your decisions.

Individuals who have insurance through the Marketplace (Affordable Care Act), can cancel that insurance, review their Medicare options and alternatives, then signing up for whatever products meet their needs.

Individuals who have an Employee Group Health Plan (EGHP) may have some other options. For instance, those who have an employee plan or their spouse’s employee plan they can keep their EGHP: If they are receiving Medicare due to age (65) that employee group must be 20 or more employees. When you are receiving Medicare due to a disability, the employer group must have more than 100 employees. If the group has less than 20 (aged into Medicare) or 100 (Disability then Medicare) employees, the individual MUST enroll in/keep their Medicare A & B to avoid penalties. They could stay on the EGHP insurance as secondary coverage. They could also keep Medicare A & B, drop the EGHP and enroll in additional products to go along with their Medicare (including adding a Part D plan)

Individuals who have a Group Health Plan (GHP) through a retired individual, MUST sign up for Medicare A & B, no matter what the group size. The fact that the insurance is really a retiree product requires you to sign up for Medicare A & B. If you did not ‘sign-up’ for Medicare, but simply received your Medicare card in the mail, this rule applies to you as well.

I have clients who have had Medicare A only for a number of years due to a disability or age, and had insurance through an employed spouse. Once that spouse is no longer working, you must sign up for Medicare B within 8 months. For those individuals who don’t sign up when they should have, there is a penalty and could have a delay in the ability to enroll in Medicare Part B when you want.

Now let’s speak to the Medicare Part D rules.

In order to be eligible for Medicare Part D (Prescription Drug Coverage) you must be eligible for Medicare A or B or both.

Medicare Part D is considered optional coverage. If you have Medicare Part A and/or Part B, you should get Medicare Part D. If you have Prescription drug coverage from another source, you can choose NOT to enroll in Medicare Part D. This drug coverage must be creditable (equal to or better than Medicare Part D Standard Plan). If you don’t have drug coverage from another source and decide NOT to enroll in a Medicare Part D plan, you will have a premium penalty. That Premium Penalty is 1% for each month you are without drug coverage. One percent does not sound like much, but this is compounded monthly, so you could have a premium penalty of 19% or 42%, depending on the number of months you were without creditable drug coverage. The amount of the penalty is figured on the national average of the available Medicare Part D plans. To illustrate further; If you were eligible in July of 2019 for Medicare and chose not to enroll in Medicare Part D and then decided in December of 2023 to begin coverage in January 2024, you would have a 54% penalty on the national average of $32.74, which equals $17.68 per month. You will have to pay that premium penalty each month for the rest of your life, an amount in addition to the actual premium of the Part D plan you choose. (54% comes from 6 months in 2019, and 12 months in each of 2020 to 2023)

I gave you this long answer to illustrate that IF you are eligible for Medicare A and/or B you must make a decision regarding Medicare Part D. That Part D decision has different criteria and rules to consider than the decision for Medicare Part B.

It is important to understand for younger Medicare eligible individuals that all Medicare rules apply to them. Medicare Part A, B & D rules apply to everyone who becomes eligible for Medicare.

Senior Life Matters is a community based program sponsored by Lutheran Jamestown. For questions, concerns or to reach Janell Sluga, GCMC, call 716-720-9797 or email at SLM@lutheran-jamestown.org.