We recently spotlighted our strategic partner in the Medicare space–Jason L’Hommedieu of Nexus Insurance Advisors. Medicare is one of those topics that affect everyone, regardless of your income. The information overload becomes equal parts complexity and intimidation.
While we’ve happily referred many clients over the years to Jason and his team, big changes are coming in 2025. To help our clients be well prepared, I invited Jason for a sit-down interview to answer our most pressing questions.
If this has been on your mind, you can watch the full interview here.
For today though, we’ve assembled a guide to the basics that you should know as you approach upcoming Medicare decisions.
- Enrollment Periods
- Medicare Part A, B, C, and D
- Penalties to Avoid
- Additional Coverage Options
Know Your Enrollment Periods
Timing is the one mistake we most often encounter regarding Medicare enrollment. Missing key enrollment periods can lead to delayed coverage and financial penalties.
Initial Enrollment Period (IEP)
- What It Is: A seven-month window starting three months before the month you turn 65, including your birth month, and ending three months after.
- Why It Matters: Enrolling during this period ensures your coverage starts promptly and helps you avoid late enrollment penalties.
- Example: If you turn 65 in June, your IEP runs from March 1 to September 30.
General Enrollment Period (GEP)
- What It Is: Runs annually from January 1 to March 31.
- Why It Matters: If you missed your IEP, you can enroll during the GEP, but coverage won’t start until July 1, and you may incur penalties.
Special Enrollment Period (SEP)
- What It Is: Available if you or your spouse are still working and covered under a group health plan.
- Why It Matters: Allows you to delay enrollment without penalties and sign up anytime while covered by the employer plan or within eight months of losing that coverage.
Understand the Different Parts of Medicare
Medicare is divided into parts, each covering different services. Here’s what each part covers:
Part A (Hospital Insurance)
- Covers: Inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services.
- Cost: Usually premium-free if you or your spouse paid Medicare taxes while working.
Part B (Medical Insurance)
- Covers: Doctor visits, outpatient care, medical supplies, and preventive services.
- Cost: Monthly premium required, which may increase based on your income. (Important for financial planning conversations)
Part C (Medicare Advantage)
- What It Is: An alternative to Original Medicare offered by private companies approved by Medicare.
- Covers: Includes all benefits of Part A and Part B, often with additional benefits like vision, dental, and prescription drugs.
Part D (Prescription Drug Coverage)
- Covers: Cost of prescription medications.
- Cost: Monthly premium varies by plan; offered by private insurers.
Be Aware of Late Enrollment Penalties
Delaying enrollment can have long-term financial consequences. In Jason’s words, “Good luck, and if you make a mistake, it’s a penalty forever…” Fortunately, we don’t expect much help from the government, so the answer is clearer–talk to Jason!
Part B Late Enrollment Penalty
- What It Is: A permanent 10% increase in your premium for each 12-month period you were eligible but didn’t enroll.
- Duration: This penalty is permanent and lasts as long as you have Part B.
Part D Late Enrollment Penalty:
- What It Is: Calculated by multiplying 1% of the "national base beneficiary premium" by the number of full months you went without Part D or creditable coverage.
- Duration: Also, permanent and added to your monthly premium.
Evaluate Your Healthcare Needs and Coverage Options
Choosing the right Medicare plan depends on your personal health needs and financial situation, but here are a few comparisons we often encounter in Medicare discussions.
Original Medicare vs. Medicare Advantage:
- Original Medicare: Offers flexibility in choosing providers but may have higher out-of-pocket costs.
- Medicare Advantage: May offer additional benefits and lower out-of-pocket costs but with network restrictions.
Supplemental Insurance (Medigap):
- What It Is: Additional policies sold by private companies to cover gaps in Original Medicare (like copayments, coinsurance, and deductibles).
- Why It Matters: Helps reduce unexpected healthcare expenses.
Prescription Drug Plans:
- Considerations: Review the formulary (list of covered drugs), pharmacy network, and costs to ensure your medications are covered affordably.
Next Steps for You?
Out of the gate, the most important recommendation I can make is to connect with Jason and his team at Nexus Insurance Advisors. A few key reasons:
- There is no added cost to you! He is compensated by the insurance carriers.
- Jason spends all day every day working in this area. Most of us have only read this blog.
- We are confident in Jason’s expertise and level of service. We refer clients–including my own family members–to his team.
Enrolling in Medicare is a significant milestone. By understanding enrollment periods, the different parts of Medicare, potential penalties, and evaluating your coverage needs, you can make informed decisions that best protect your health and finances.
Remember: Starting the enrollment process early gives you ample time to understand your options and ensures a smoother transition into Medicare.