CRC CRC Social Security & Medicare Benefits 2 — Questions and Answers
Question 1: What is Medicare Part A and how is it typically funded for most eligible Americans?
- Outpatient care funded by monthly premiums
- Hospital insurance funded by payroll taxes, premium-free for those with sufficient work history (Correct answer)
- Prescription drug coverage funded by general tax revenue
- Supplemental coverage funded entirely by beneficiaries
Correct answer: Hospital insurance funded by payroll taxes, premium-free for those with sufficient work history
Medicare Part A covers inpatient hospital, skilled nursing, and hospice care; it is premium-free for those with at least 40 quarters of Medicare-covered employment.
Question 2: What does Medicare Part B cover and what is its cost structure?
- Hospital stays, free for all Medicare enrollees
- Outpatient medical services, funded by monthly premiums plus cost-sharing (Correct answer)
- Prescription drugs covered by a separate private plan
- Long-term care services at no cost
Correct answer: Outpatient medical services, funded by monthly premiums plus cost-sharing
Medicare Part B covers outpatient physician visits, preventive services, and durable medical equipment, and requires a monthly premium (subject to IRMAA for higher-income beneficiaries) plus 20% coinsurance.
Question 3: What is IRMAA in the context of Medicare, and which clients does it affect?
- A type of Medicare supplement plan for low-income seniors
- An income-related monthly adjustment amount that increases Part B and D premiums for higher-income beneficiaries (Correct answer)
- A penalty for late enrollment in Medicare Part A
- A government subsidy for Part D prescription drug coverage
Correct answer: An income-related monthly adjustment amount that increases Part B and D premiums for higher-income beneficiaries
IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge added to Medicare Part B and Part D premiums for individuals whose modified adjusted gross income exceeds certain thresholds.
Question 4: What is the Medicare Part D late enrollment penalty and when does it apply?
- A one-time $500 fee for failing to enroll at 65
- A permanent monthly premium increase of 1% per month for each month of delay beyond the initial enrollment period without creditable drug coverage (Correct answer)
- Disqualification from Part D for 12 months
- A penalty only assessed if prescription drug use exceeds a set threshold
Correct answer: A permanent monthly premium increase of 1% per month for each month of delay beyond the initial enrollment period without creditable drug coverage
The Part D late enrollment penalty is 1% of the national base beneficiary premium per month of delayed enrollment without creditable coverage, and it is added to the premium permanently.
Question 5: What is a Medicare Supplement (Medigap) plan designed to do?
- Replace Medicare Parts A and B entirely
- Cover prescription drugs not included in original Medicare
- Pay some or all of the cost-sharing gaps in Original Medicare Parts A and B (Correct answer)
- Provide long-term care insurance for nursing home stays
Correct answer: Pay some or all of the cost-sharing gaps in Original Medicare Parts A and B
Medigap plans are standardized private insurance policies sold to fill the deductibles, copays, and coinsurance gaps left by Original Medicare Parts A and B.
Question 6: When is a retiree's Initial Enrollment Period (IEP) for Medicare?
- Only on their 65th birthday
- January 1 to March 31 of the year they turn 65
- The 7-month window beginning 3 months before the month they turn 65 (Correct answer)
- Any time after retirement, with no penalty
Correct answer: The 7-month window beginning 3 months before the month they turn 65
The Medicare Initial Enrollment Period is a 7-month window: the 3 months before the birthday month, the birthday month itself, and the 3 months after, during which enrollment avoids late penalties.
CRC CRC Social Security & Medicare Benefits 2
What is Medicare Part A and how is it typically funded for most eligible Americans?