A few things you need to hear at least once before you go making decisions about Medicare...                                     

• Medicare is not free! Medicare is divided into parts. Part A of Original Medicare which pays for hospital services, is free if either you or your spouse paid Medicare payroll taxes for at least 10 years. (People who aren't eligible for free Part A can pay a monthly premium of several hundred dollars.) Part B of Original Medicare covers doctor visits and outpatient services, and it will cost you— the standard monthly premium in 2023 will be $164.90.

Part D, which covers prescription-drug costs, also has a monthly charge that varies depending on which Medicare Prescription Drug plan you choose; the average Part D basic premium for 2023 will be about $32. Some people get their drug plans included in a Medicare Advantage Prescription Drug plan that can start at $0 per month. 

• IRMAA stands for Income-Related Monthly Adjusted Amount. It represents an increase to Medicare Part B and Part D standard monthly premiums and is determined by the Social Security Administration.

In plain English, IRMAA is a pesky fee (a.k.a. surcharge) that Medicare members have to pay each month if they make too much money. This happens more often than you would think. Check my links page for the income amounts for 2023. You could pay quite a bit more for your Part B and Part D premiums, ugg.  

• There are only a few times in life when you are guaranteed into a Supplemental plan or Medigap plan; most common is when you first turn 65 or at your initial enrollment period into Medicare. You may not get this opportunity again after you start Medicare. You may be required to come through underwriting if you decide later that you want or need a Medigap plan. There are other special election period that could qualify you for a supplement without underwriting. See my links page for more election periods that may apply. Each state has specific rules that pertain to their state only. 
• Medicare Part D penalties can be a real stickler. The government will penalize you If you decline a drug plan when you are first eligible and then decide you want a drug plan later - you will accessed a penalty that will stay with you for the rest of your Medicare life. The amount of the penalty will depend on how many months you went without coverage and on the average cost of a drug plan for that current year. The amount you will be penalized will change year by year and it will collected by the insurance company that is providing your drug coverage. The collected penalty will then be given to the government.                                                             
• You can only have either Medicare Supplemental Insurance or you can have a Medicare Advantage Plan - but you can't have both at the same time.   
• The Donut Hole - this is another pesky and expensive issue that can pop up if you are prescribed and take expensive medications. Most Medicare drug plans have a coverage gap (also called the "donut hole"). This means there's a temporary limit on what the drug plan will cover for drugs.

Not everyone will enter the coverage gap. For those that do they will pay the following amounts for their prescriptions. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. Once you and your plan have spent $4,660 on covered drugs in 2023, you're in the coverage gap. This amount may change each year. Also, people with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap. Once you reach the coverage gap, you'll pay no more than 25% of the cost for your plan's covered brand-name prescription drugs. You'll pay this discounted rate if you buy your prescriptions at a pharmacy or order them through the mail. Some plans may offer you even lower costs in the coverage gap. The discount will come off of the price that your plan has set with the pharmacy for that specific drug.

Although you'll pay no more than 25% of the price for the brand-name drug, almost the full price of the drug will count as

out-of-pocket costs

to help you get out of the coverage gap. What you pay and what the manufacturer pays (95% of the cost of the drug) will count toward your out-out-pocket spending. Here's a breakdown:

Of the total cost of the drug, the manufacturer pays 70% to discount the price for you. Then your plan pays 5% of the cost. Together, the manufacturer and plan cover 75% of the cost. You pay 25% of the cost of the drug.There’s also a dispensing fee. Your plan pays 75% of the fee, and you pay 25% of the fee.

What the drug plan pays toward the drug cost (5% of the cost) and dispensing fee (75% of the fee) aren't counted toward your out-of-pocket spending.