Planning for Medicare may not sound like a barrel of fun, but it’s not one that we can really avoid either. If you turn 65 this year, one of the most important decisions you’ll make is about your Medicare benefits and supplemental options. Taking the time to sit down and understand your options now will help you prepare for your costs associated with Medicare and to
This post will help you understand the Medicare program and how it works for you. You’ll get the basic information you need to make the best decision for your situation. You’ll also learn the steps to take to get the coverage that’s right for you.
What is Medicare?
Medicare is a health insurance program administered by the federal government. It covers people age 65 and over, as well as those with certain disabilities and end-stage renal disease.
There are three main parts to the Medicare program and one fourth part that is really an option for supplementing your coverage. Proper planning for Medicare always involves learning what your basic Medicare parts already cover. The three main parts are:
- Part A, also known as hospital insurance, which covers your care when you are in the hospital or skilled nursing facility. Most people pay no premium for Part A.
- Part B, the medical insurance portion, covers your doctor visits, tests, and outpatient services. Most people pay a monthly premium for Part B.
- Part D is optional prescription drug coverage. Most people pay a Part D premium.
Learn more about the parts of Medicare in this 4-minute video.
What are my Medicare Options?
The next step in planning for Medicare is to decide how you will get your benefits. There are two ways to get your Medicare benefits:
- Enroll in Original Medicare (Parts A and B) and a Part D prescription drug plan. Many people combine Original Medicare with a Medicare Supplement Plan, or Medigap, to help with out-of-pocket costs.
- Enroll in a Medicare Advantage plan, which combines all your Medicare benefits into one convenient plan. Most Medicare Advantage plans include Part D coverage for prescription drugs.
There are advantages and disadvantages to both options. Many Medicare Advantage plans are HMOs, which mean you must get your care from within the plan’s network. Your choice of doctors, hospitals, and pharmacies may be limited.
On the other hand, your monthly premiums are generally lower for Medicare Advantage plans. There are two common types of networks: HMO and PPO. Costs are more predictable with a Medicare Advantage HMO plan because there is no out-of-network benefits except in emergencies.
If you choose a Medicare PPO plan, you may still be able to use any doctor you like, although you pay less if you use the plan’s preferred providers. Most Medicare Advantage plans offer extra benefits not included in Original Medicare, such as limited routine dental and vision care.
Good Medicare planning involves researching and choosing the option that’s right for you well before your enrollment date.
Original Medicare with Medigap
Original Medicare, however, offers more flexibility. It can be used anywhere Medicare is accepted, which is a plus if you travel a lot. If you combine it with a first-dollar Medigap plan, you can virtually eliminate any out-of-pocket costs for your health care. For many people, the knowledge that you will have very little back-end spending is quite a draw.
Medicare Supplement Plans are also optional, but it pays to enroll as soon as you are first eligible if you want coverage. During your one-time Medicare Supplement Open Enrollment Period, you can’t be turned down, and you can’t be charged a higher premium due to your health status. If you wait, you may have to undergo medical underwriting. During underwriting, an insurance company can choose not to sell you a plan if you have health issues. They can also charge a much higher premium, making the coverage unaffordable.
Since Original Medicare doesn’t’ include retail drugs, people who choose Medicare plus a Medicare Supplement usually also enroll in Part D. Keep in mind that while Part D coverage is voluntary, you should enroll as soon as you are eligible. If you don’t have prescription drug coverage from another source, you may pay a late enrollment penalty if you enroll later on. You’ll pay this penalty with your monthly premium for as long as you have coverage.
Do I Need Medicare if I’m still working at 65?
If you are still working and get group health coverage from your employer, planning for Medicare will involve comparing your employer coverage against the option to go with Medicare as your primary insurance. You need to weigh your options carefully. This also applies if you have group insurance after you retire, either through you or your spouse’s employer, or other organization.
Most people sign up for premium-free Part A as soon as they are eligible since it costs them nothing. Having Part A alongside your employer coverage may reduce your spending in the event of an inpatient hospital stay.
The decision to enroll in Part B is more complicated. You may get better coverage at a lower cost through your group plan. If you do decide to wait, you’ill have an open enrollment period when your group coverage ends. During that time, you can enroll in Part B, Part D, and/or Medigap without penalty.
It’s important to talk with your employer before you turn 65 to see how your health coverage is affected by Medicare eligibility. Then you can make the best decision for your health insurance going forward.
For more information on Medicare’s coordination of benefits with employer group insurance, visit this post about Medicare and Employer coverage.
How do I enroll in Medicare?
If you are receiving Social Security or Railroad Retirement benefits, you’ll be automatically enrolled in Medicare. If you aren’t, you have a seven-month initial enrollment period during which you can apply for Medicare benefits, as well as Medigap and Part D. The enrollment period starts three months before the month you turn 65. It includes your birthday month and extends three additional months.
You can apply online through the Social Security Administration website (www.ssa.gov) or by visiting your local Social Security office.
What should I do before I enroll?
The following timline shows steps you can take in the months before you turn 65 to help you get the best Medicare plan for you.
6 months before 65th birthday:
- Call Social Security to verify eligibility for Medicare and confirm you have enough work history to qualify for premium-free Part A
- Begin considering your potential out-of-pocket expenses on each type of coverage: Medicare Supplement vs Medicare Advantage
- If you are thinking of a Medicare Advantage plan, compare the out-of-pocket maximums on plans in your are
- Ask your doctors if they accept Original Medicare and if they participate in any Medicare Advantage plans
4 – 5 months before 65th birthday:
- If you will be working past age 65, talk to your employer about how your group health benefits may change after you turn 65
- Consider if you will travel much after 65 and how this will affect your coverage under various Medicare plans
- Compare premiums and cost-sharing for any Medicare Advantage plans you are considering
- Request information about the specific Medigap and/or Medicare Advantage plans you are considering
3 month before your 65th birthday:
- Apply for Medicare (this is the beginning of your Initial Enrollment Period)
- Enroll in Medigap through your Medicare insurance broker if you’ve decided on a plan
- Make a list of any daily medications you take to see how they are covered under different Part D plans
- Look into any extra benefits that you need such as dental, vision and hearing insurance
2 months before your 65th birthday:
- Return the Part B form if you are declining Part B because you are still covered by employer group health coverage
- Verity your coverage and coordination of benefits with your employer if staying with that coverage
- If you signed up for Part D, begin making arrangements to get any daily meds transferred to a participating pharmacy
1 month before your 65th birthday month:
- Make sure you’ve received your Medicare ID cards for all the coverage you’ve enrolled in
- Let your doctors know they should start submitting bills next month to Medicare (or to your Medicare Advantage carrier, if that’s what you have chosen)
- If you haven’t enrolled in coverage yet, be sure to do so this month so you don’t face any delays
How can I get the most out of my Medicare benefits?
Planning for Medicare involves using your benefits properly and to their fullest advantage. Here are some tips to minimize your out-of-pocket costs under Medicare:
- Always carry your Medicare ID cards and present them whenever you get medical care. If you enroll in Medicare Advantage, that’s the card you will prese
- If your Medicare Advantage or Medicare Supplement Plan has a provider network, be sure to get all your routine care through the network providers. Emergency care out-of-network will always be covered, but you should always see your plan doctors for non-urgent care.
- Look for ways to save on your prescriptions under Part D. Many plans offer discounts if you use their mail-order pharmacy. Ask your doctor about generic medications to minimize your copayments.
- Call Medicare to see if a particular service is covered if you or your doctor aren’t sure.
- Study your itemized bills and explanations of benefits carefully. Call your plan if something doesn’t make sense.
- Read any plan updates and information your insurer sends so you don’t miss important changes in coverage.
Need help Planning for Medicare?
Did you know that you don’t need to go it alone when it comes to Medicare? Enrolling through Boomer Benefits will give you peace of mind. We’ll present all your options, help you enroll in suitable coverage, and then be there on the back end forever when you have Medicare questions, problems or concerns.
Let us help you get started with your Medicare planning today. Give us a call at 1-855-732-9055.