A Field Guide to Medicare

Aging Comes Naturally. Deciphering Medicare Doesn't.

What’s the Deal?

Many of your working clients have probably been contributing to Medicare for years. Before they turn 65, it’s time to see if they have thought about how their out-of-pocket healthcare costs could change as they enroll in Medicare.
With Gallup polls showing more than half of people surveyed worried about unexpected medical costs, this is one of the most relevant wealth and health conversations you can have.

So What…Why It Matters

The Field Guide to Medicare series can help you explain the ins and outs of the federal program. It’s not designed to sell anything of any kind. It’s just meant to help you show your value to clients by helping them make informed decisions about health care at age 65 and beyond.

Knowing a little about Medicare could put you in a better position to help clients manage health expenses as they get older.

Medicare Costs in 2018

Medicare’s website lists costs at a glance, with a detailed look at what beneficiaries can expect to pay in 2018. Here’s a simplified look at some of the basic costs.

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Terms to Know

Original Medicare:

Coverage managed by the federal government. Your clients can choose this option or buy a plan from a private insurer instead.

Medicare Advantage:

Medicare coverage offered by a private insurer.


Someone who chooses Original Medicare might also buy a Medigap policy (known as Medicare Supplement Insurance) from a private company to help cover copayments, coinsurance, or deductibles that aren’t covered by Original Medicare. No one has to buy this if they don’t want it.


The amount of costs your clients will cover on their own before coverage kicks in.


A patient’s share of costs on an individual medical bill.


Coverage for qualifying individuals, including those with lower incomes.


A periodic payment made to Medicare, an insurance company, or a health care plan for health or prescription drug coverage.

Health Savings Account (HSA)

A tax-advantaged medical savings account available to taxpayers who are enrolled in a high-deductible health plan. The funds contributed to an account are not subject to federal income tax at the time of deposit.

Modified Adjusted Gross Income (MAGI)

The adjusted gross income reported on the most recent federal income tax return filed, plus any tax-exempt Social Security, interest, or foreign income that might have been deducted.

Part A

The part of Medicare that covers care in hospitals (and other medical facilities)

Part B

The part of Medicare that covers doctor services, outpatient care, medical supplies, preventive care

Part C

This refers to a Medicare Advantage plan, which includes Part A and Part B but is provided by a private insurer instead of the government.

Part D

Prescription drugs

Medicare vs. Medicaid

While Medicare and Medicaid are two distinct programs, there seems to be lingering confusion around the differences of each program, how eligibility is determined, and how the costs differ.

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The ABCs of Parts A, B, C, and D

What’s Covered, What’s Not by Medicare Parts A and B

It’s important for clients to know that Medicare doesn’t cover everything.

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What Medigap options are available?

If you opt for Original Medicare and choose to add a Medicare Supplement Insurance (Medigap) policy, there are 10 standardized types in most states. Find out what’s covered by each type of Medigap policy on the Medicare.gov Medigap Policies page.

What does Medigap cost?

If you want to buy a Medicare Supplement Insurance (Medigap) policy to help with out-of-pocket expenses that Original Medicare doesn’t cover, make sure to budget for that. Premiums can vary widely depending on your policy or coverage, plus factors including your age, where you live, medical underwriting, and discounts, according to the 2017 Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare guide. According to the 2017 National Medicare Supplement Price Index, premiums for a 65-year-old woman ranged from $118 per month (in San Antonio) to $464 per month (in New York City). That works out to $1,416-$5,568 per year.

How do health savings accounts (HSAs) work with Medicare?

Contributions to HSAs must stop once a person is enrolled in Medicare. Part A coverage can begin six months back from the date your client applies for it, so Medicare.gov suggests stopping contributions to an HSA at least six months before applying for Medicare to avoid tax penalties.

Money from an HSA can be used to pay qualified health care expenses in retirement.

Support Materials

The Field Guide to Medicare series includes a client field guide, workbook, and presentation designed specifically to educate your clients. Contact your Transamerica wholesaler to learn more.

This material is being provided to help explain Medicare in an easy-to-read format. It’s for educational purposes only and is not intended to be used to promote the purchase of Transamerica’s Medicare Supplement Insurance (Medigap) or Medicare Part D coverage.