There are many nuances to Medicare coverage and an honest mistake can cost tens of thousands of dollars.


By Cheri Brown

Cheri Brown

A 65th birthday is the start of something special — reasonably priced health care. Most people pay $148.50 a month for Medicare which provides 80 percent medical coverage. That sounds fantastic, yet, if you experience a major medical problem, your 20 percent can be thousands or tens of thousands of dollars out of your own pocket. To protect your financial health as well as make the most of the many available Medicare options, we’ll start with how Medicare works and then review what your options are to limit your financial risk while meeting your long-term health goals.

Do I Qualify for Medicare?

The most common way to qualify for Medicare is to have worked 40 quarters, roughly the equivalent of 10 years,  in your lifetime or be married to someone who worked 40 quarters. There are other ways to qualify, such as being permanently disabled or being on dialysis.

Original Medicare

Medicare, often referred to as Original Medicare, consists of two parts. Medicare Part A (Hospital Coverage) is funded by payroll taxes, which in addition to in-hospital coverage, includes skilled nursing care, hospice, and a few other services. You’ve been paying all along for your future medical coverage costs simply by you or your spouse working and paying into Social Security and FICA payroll taxes and now you can start to get those benefits!

The second part of Original Medicare is Part B (Medical Insurance). This covers physician services, laboratory services and more, and it is paid for by a combination of funds from the Federal government and a Part B premium. You pay this when you decide to take your full Medicare benefits, and it is usually deducted from your monthly Social Security benefits. If you are not yet receiving your social security benefits, you will receive a quarterly bill.

Forty percent of Californians Choose Customization

While the baseline Original Medicare and the complexities of managing health care through a government agency are fine for many, 40 percent of Californians in 2020 chose to enroll in Medicare Part C or Medicare Advantage. Recognizing everyone’s health care needs are unique, Medicare developed Medicare Part C or Medicare Advantage, in partnership with private health care insurance providers to allow you to choose a customized plan that’s based on your preferences. The Original Medicare federal funding is rolled into these plans, so you only pay the difference to get the optimized health care coverage you need.

Medicare Part D and MediGap

There are additional Medicare plans to complete your health strategy. Seventy-seven percent of all Medicare beneficiaries participate in the highly successful prescription drug coverage plans provided through Medicare Part D. Like Medicare Advantage (Part C) these plans are available through private insurers.

For convenience, some Medical Advantage plans include Part D coverage. If you are eligible for Medicare and you do not have creditable coverage (e.g., employer coverage or VA coverage) for Part D you may have a fine levied against you if you choose a Part D plan later. If you do not want to work with an HMO style plan, and still want to have coverage for the percent Medicare does not cover you can choose a Medigap plan, also known as a Medicare Supplement. Medigap plans are offered through private insurers and give you the freedom to see any physician who accepts original Medicare.

What Are the Next Steps?

Medicare-eligible people who are receiving their Social Security benefits at 65 will be automatically signed up for Medicare. Those who have not elected to start receiving their Social Security benefits must sign up either over the phone at 1-800-MEDICARE or online at www.medicare.gov.

Ensure Your Health and Financial Well Being

Welcome your Medicare card with the confidence you’ve made the right decisions. There are many nuances to Medicare coverage and an honest mistake can cost tens of thousands of dollars.

There are advantages to both Medicare Advantage or Medicare Supplements, so it helps to have a local Medicare Specialist as a guide in this important decision-making process.

Medicare beneficiaries can turn to their local HICAP office (Health Insurance Counseling Advocacy Programs) or find a qualified local Medicare Specialist who understands the local physicians, medical groups, and insurance options that are available.


Cheri Brown is a former executive with a national insurance carrier with decades of experience in Medicare sales and training. Morgan Hill has been her home for more than 40 years. She volunteers for the Morgan Hill Chamber of Commerce Friday Night Music Series and Morgan Hill Freedom Fest. Email her at [email protected]

Robert Airoldi