Turning 65 with Medicare

The Biggest Decision You Face.

Many people I talk to who are turning 65 are unaware how Medicare works. And that’s perfectly understandable since it’s quite different from insurance you would get through your employer or through the marketplace. With Medicare, there are a couple decisions you’ll make from the beginning which may impact your healthcare for the rest of your life. My goal in this short eBook is to explain the details so you will feel 100% confident in your choice.

Medicare is a strictly regulated government program which private insurance companies offer insurance through. Medicare funding comes from payroll taxes, Medicare premiums paid by members, and other government allocations. Some of this money is provided back to insurance companies who can offer certain types of coverage for little or no monthly cost to Medicare beneficiaries. These plans are called Medicare Advantage. We will explain these “Advantage” plans below in more detail, as well as the alternative “Supplemental” plans, since this choice is one of the most important you will make when you turn 65.

Medicare Parts A B C & D Explained:

All Medicare benefits fall into one of these 4 letter categories. It’s important to remember that not everyone will have all 4 parts. Your initial decision will determine which parts you have.

Part A is often referred to as your hospital insurance. This covers inpatient hospital stays, skilled nursing, hospice, and home health care. Part A will cover most hospital costs for inpatient care, but some responsibility does pass on to you. For example, if you were on Part A (alone) and were hospitalized in 2024, your Part A Inpatient Hospital Deductible would be $1,632, meaning you would be responsible for that amount out of pocket before Medicare Part A pays the rest. If you were hospitalized for more than 60 days, you would be responsible for an additional $408 per day. As you can see, Part A covers a lot but there are some costs that pass through to you. Don’t worry, though. There are good ways to avoid having to face that cost. More on that ahead.

If you start social security at 65, Medicare will automatically sign you up for Part A, the effective date being the 1st day of the month you turned 65.

Part B covers the rest of your outpatient care needs, ranging from primary care visits to ambulance services, durable medical equipment, and home health care. For most people, the monthly Part B Premium (cost) is $174.70, though people who made more than $500,000 annually will pay $594 per month. The Part B Deductible is $240 per year, so you would be responsible for that before Medicare Part B started paying, and after that it will pay 80% of your outpatient services, leaving you responsible for the other 20%.

This is the foundation of Medicare and where all people start. As you can see, Medicare provides good coverage for the cost compared to other health insurance. Essentially, you have a low deductible 80/20 plan for a low Premium of $174.70 a month. This is good coverage, but as you can imagine, that 20% can add up to some very large medical bills. One heart attack can easily rack up a half million dollars in medical costs, and 20% of that is still a large number. Since medical costs tend to be highest at the later stages of life, this is something that you should plan for now. And we can help you do that.

Turning 65


Once you have Part A and B (hospital and outpatient), your decision comes down to whether you want to add part C, which is optional. Part C is commonly called Medicare Advantage, and every area has different Advantage plans offered by different insurance companies. When you enroll in an Advantage Plan, your benefits will come from the insurance company rather than the government. The Advantage schedule of benefits replaces the Part A and Part B schedule; however, these plans are required to offer at least the same level of coverage. While Parts A and B do not cover things like Dental and Vision, Advantage plans often include these benefits and can even include Drug Coverage.

Some Advantage Plans will reimburse part or all of the Part B Premium. If not, you will still need to pay the $174.70 per month for Part B coverage.

In Martin County and most of Florida, the Advantage plans are strong compared to other states. Most Medicare enrollees have a $0 Premium (monthly payment) for their Advantage Plan, though some have nominal monthly payments of under $50. With these plans, instead of being responsible for the 20% not paid by Part B (and the similar Part A costs), you will usually have copays and coinsurance, which you’re probably already used to. But just to refresh, the copay is a set amount you pay for a service ($35 for a primary care visit), and coinsurance is a percentage of the total bill you’re responsible for (15% of a surgery bill).

Many seniors love Advantage plans because the monthly payments are low or non-existent, so they only incur costs when they go to the doctor. Seniors on a fixed income especially appreciate this, as they can budget medical needs according to the copays. There are still times, however, when seniors feel the copays and coinsurance becomes burdensome. Especially when battling chronic conditions that require a lot of copays. The good news is that all Advantage plans have an Annual Out of Pocket Max, meaning you will never have to pay more than that amount in a year, no matter how bad your health or medical bills. This Out of Pocket Max can be anywhere from $2,500-10,000 and is one of the most important things to consider if you choose an Advantage plan.

One thing about Advantage you must remember is that the plans are local networks of agreed upon rates for in-network doctors, but if you travel outside of the area, your coverage options might be much more limited. For many people who stay close to home and use the same doctors, this works just fine, but people who travel may find more restrictions with an Advantage Plan. As a matter of fact, many doctors don’t accept ANY Advantage plans or will only accept a limited number of them. This is why it’s important to make sure your doctors are in network before signing up for an Advantage Plan. I also must mention doctors change the plans they accept from year to year, and I regularly need to help people find new plans when their preferred doctor decides to drop the one they currently have. Sometimes, folks simply can’t find a plan that has all the doctors they want.

For some people, Advantage is a good fit. For others, it’s not. Even if it is a good fit, it’s still important to check the plan changes every year to make sure yours is still best.

Advantage Plans are Guaranteed Issue, meaning they must accept you regardless of any medical conditions. There are no underwriting or health questions on Medicare Advantage Applications.

Finally, Advantage often rolls in additional benefits not available through regular Medicare. As mentioned, prescription drugs, dental, and vision benefits are often included. Many plans also offer hearing aids, rides to and from doctors’ appointments, and gym memberships.

Advantage Plans which include drug coverage are known as MAPD plans. When you sign up for this, you have essentially signed up for all 4 “parts” of Medicare. You already had your Part A and Part B, explained above, the Advantage Plan is Part C, and the RX coverage is Part D. Unless your Advantage Plan has a monthly premium (most in Florida don’t right now), your total monthly cost for your health insurance would be $174.70 (if you were within normal income range). For many seniors, this is the big selling point, and I’ve already explained the downside.


As mentioned above, Advantage Plans are optional. You can choose to keep parts A and B without an Advantage Plan and buy Part D (Drug Coverage) as a standalone product. Part D plans are usually less than $50 a month.

The alternative to an Advantage Plan in this situation is to purchase a Medicare Supplement from a private insurance company which will pay part or all of the remaining medical costs after Part A and Part B pays. The most popular Supplement is Plan G, as this plan pays the total balance not paid by Medicare for all covered medical costs, after you pay the annual Part B Deductible of $240. Even though these plans have a monthly cost (around $200 for someone just turning 65), they simplify your healthcare since you can rest easy knowing you won’t have to pay more than $240 per year for medical costs.

Quick note – We talked earlier about PARTS A, B, C & D. Now we’re talking about Supplement PLANS. We always speak of Medicare in terms of its parts and Supplements in terms of their plans. Just a tip to help keep it sorted. There is a Medicare Supplement PLAN C but we wouldn’t want to confuse that with Medicare PART C, which we explained above is Advantage.

While a Medicare Supplement will make it easier to predict medical costs, its biggest selling point is probably the fact that it’s almost universally accepted. We mentioned earlier that many doctors are selective on which Advantage Plans they will take, however any doctor that accepts Medicare will accept a Medicare Supplement. Why? Because the Supplement company has to pay the bill as long as Medicare pays.

For example, let’s say Dr. Doe in Stuart happily accepts Medicare (as most do). If you had a Supplement, he would automatically have to accept your plan (by law) because the Supplement Company has to pay the other 20% since Medicare is paying 80%. If you went for a service that Medicare didn’t cover, like acupuncture, then the Supplement Company wouldn’t pay either. So if the doctor will accept your Red, White and Blue Medicare card, he will always accept your Supplement insurance.

I must stress how different this is from what you would experience with Advantage. With an Advantage Plan, it’s possible that you’d have a hard time seeing your preferred doctors in your own town, but with a Supplement, you could see pretty much any doctor you wanted, both in your town and across the country. If they accept Medicare, they will take your Supplement. This is really the biggest selling point for Supplements!

Turning 65


Another big difference between Advantage Plans and Supplements is underwriting. While Advantage Plans accept everyone, applications for Medicare Supplements have health questions that must be answered “NO” to be approved. Someone who has a history of heart problems, diabetes, or many other medical conditions would not be eligible. Obviously, many seniors would be unable to qualify.

There is, however, one opportunity for everyone to sign up for a Supplement, regardless of their health, and that is when they are first turning 65 and becoming eligible for Medicare. During this window, you can sign up for any Supplemental Plan you want, and acceptance is guaranteed! Even someone with cancer can sign up for a Supplement during their Initial Enrollment Period, and the difference in the care they will receive could be dramatic. What’s more, once you have a Supplement, the company cannot kick you off the plan for bad health. The only way you would lose your supplemental insurance is if you stopped paying the bill.

All Plan G Supplements are the same. The only difference is price and the company offering it. Otherwise, they all have to offer the same thing (all medical bills paid except your $240 Part B Deductible). This is why it’s important to choose the right company when you buy a Supplement. The rates of Supplements increase annually like everything else, and you will want to go with a company with a solid history. If you buy
from a company who over time raises their rates to $400 a month, you would want to look for another company that offered the same plan at a lower rate, but if you couldn’t qualify medically, you would in essence be “stuck” with the higher premium plan or be forced to consider an Advantage Plan to avoid the high rates. This is another reason why it’s so important to pick right the first time. And we are here to help you do that

Comparing Annual Cost

In Florida, the annual cost can wind up being similar regardless of which you choose, and ultimately your decision may come down to other factors. For example, someone with an Advantage Plan (with Part B Giveback) who has medical costs throughout the year may wind up reaching their Out of Pocket Max of $3,000, meaning they would not have to pay anything further toward their medical costs. Someone else with a Supplement receiving the same level of care would not be paying copays or coinsurance. They would pay the annual $240 Part B Deductible, their Part B Premium of $174, $50 (probably less) for their Part D card, and around $200 for their Plan G Supplement. Everything else is covered by the Plan G Supplement.

The annual cost for the person on the Supplement would be around $3,240 with the Part B Deductible. This is similar to the $3,000 Out of Pocket Max in the Advantage Plan. If both experience the same health problems, the person with the Supplement will generally have more options for care and may have less waiting time.

If neither of them experience health problems, then the person on the Supplement will still pay $3,240 while the person on Advantage would have paid much less. Please keep in mind these are only examples and the cost of Supplements and Advantage Plans vary.

Things you should ask yourself before making a decision:

1) Is it important to me which doctors I see?

2) Do I plan to travel outside my town during retirement?

3) Am I comfortable waiting for needed care?

4) Can I afford a monthly insurance payment?

5) What will my medical bills look like in 15 years when I’m not as healthy?

Give us a call when you’re ready, and we’ll be happy to help.