Understanding all of your choices and getting the most out of Medicare can be overwhelming. According to the National Council on Aging, more than half of Baby Boomers ages 60 and older find the program and its alphabet soup of Parts A, B, C and D very confusing. Today I’m going to answer 5 key Medicare questions to help clear things up.
Before we get to those questions, here’s the details you need on getting started.
When you first become eligible for Medicare (when you turn 65, or if you are disabled) you can and should enroll in original Medicare Part A and Part B. You may not be getting benefits from Social Security or the Railroad Retirement Board (RRB), unless you are disabled or are a surviving spouse with children, but you can enroll at 65 just the same.
You have an Initial Enrollment Period of seven months (3 months before and 3 after you become eligible) to add additional Medicare healthcare coverage with an Advantage plan, or Supplemental Insurance (Medigap plan) and/or a Prescription Drug plan. But after you are enrolled, any Medicare changes to plans you are already enrolled in are limited to specific times. These dates are very important so please take note.
Key Dates for Medicare in 2017 and 2018
October 15 through December 7, 2017
Enrollment for Medicare Advantage Plans (Part C), Prescription Drug Coverage Plans (Part D), and Supplemental Plans (Part F-N)
Plan(s) will take effect on January 1, 2018. If you already have a Medicare plan, now is the time to re-evaluate your healthcare needs and compare your current plan benefits to other Medicare plan options on the market so you can make an informed decision whether it is better to keep your current plan, or change your coverage. If you decide to stay with your current plan, there is no further action required to renew it. If you do not make any changes or don’t enroll in a new plan during this period, you can’t make any changes to your coverage before October 2018.
January 1 through February 14, 2018
Members of Medicare Advantage Plans can elect to dis-enroll from their current plan. Attention: To have Medicare help pay for your prescription drugs, you have to be enrolled in a Part D plan.
January 1 through March 31, 2018
General Enrollment Period for Original Medicare (Part A and B). If you didn’t sign up for Part A and/or Part B during your Initial Enrollment Period when you first became eligible, you can sign up January 1 through March 31 each year. Your coverage will begin July 1. You may have to pay a higher premium for late enrollment.
All Year Special Enrollment Period – 5 Star Medicare Advantage Plans
You can switch to a 5-star Medicare Advantage Plan or Medicare Prescription Drug Plan once during any time of the year.
Key Medicare Questions Answered
Whether you’re approaching enrollment age yourself or helping your parents to understand the process, here are 5 very important questions to review to help relieve the anxiety and confusion.
1. How do I sign up?
If you’re already receiving Social Security because of early retirement (before your 65th birthday), you are automatically enrolled in Medicare Parts A and B (known as Original Medicare) at 65. You’ll receive a Medicare card two or three months before your 65th birthday and coverage starts the first day of the month when your birthday falls.
Part A covers hospitalization and comes with no premiums, assuming you or your spouse paid into Medicare while working. Part B, covers medical services and does require premiums, but you have the option of withdrawing from it if you wish.
If you aren’t yet receiving Social Security, you will need to apply for Medicare during one of the designated annual enrollment periods. Your initial enrollment period lasts for seven months, beginning three months before the month in which you turn 65 as I mentioned earlier. To help avoid a potential gap in coverage, consider enrolling during the three months prior to your 65th birthday.
2. Should I enroll at 65 if I’m still working and covered?
Yes, at least enroll in Part A as it is premium-free and may cover some expenses not included in your employer’s plan. Premiums for Part B may be higher as a result of your income, so it might be wise to delay enrollment in Part B until after you retire.
You can enroll without penalty for eight months after you stop working or your employee health coverage ends. If you miss that window, you’ll be subject to penalties that in the case of Part B could last as long as you remain covered.
3. What are Parts C and D and when do they come in?
Part C, known as Medicare Advantage, includes plans administered by private companies such as health maintenance organizations (HMO) and preferred provider organizations (PPO). They offer the benefits of Parts A and B, and often include additional benefits such as vision, hearing, and dental coverage.
Costs for Part C plans vary according to the insurer. Some plans require referrals or restrict you to doctors in a network, and you must already have Parts A and B in order to enroll. Other Part C plans may limit their coverage to a certain geographic area, so if you anticipate traveling a great deal or relocating, Medicare Advantage might not be for you.
Part D offers prescription drug coverage for both brand-name and generic prescription drugs. You must be enrolled in Medicare to enroll in a Part D plan which you purchase from a private insurer. Although premiums, deductibles, and co-payments vary by plan, the Affordable Care Act of 2010 limits the amount you can be charged for prescription drugs. Before enrolling in Part D, check whether you’re already covered for prescription drugs under a Part C Medicare Advantage plan. You may not need Part D if you are.
4. What services aren’t covered by Medicare?
Original Medicare (Parts A and B) won’t cover co-payments, coinsurance, or deductibles, nor will it cover medical care when you travel outside the U.S. Some services, such as long-term care, acupuncture, and cosmetic surgery, also aren’t covered. Some of these services are likely to be covered if you enroll in a Part C plan, but long-term care is not among them.
As an alternative to Part C, you may supplement Original Medicare with Medicare Supplemental Insurance, also known as “Medigap” or Parts F, G, K, L, M and N. These plans provide additional coverage that follows strict federal and state standards and costs vary by policy and insurer. To buy a Medigap policy, you must be enrolled in both Parts A and B. To guarantee availability, you must sign up within six months of enrolling in Part B.
5. Where do I get more information?
Go to the official Medicare site. The website offers detailed information on signing up, Parts A, B, C and D, costs associated with Medicare, penalties for missing enrollment, and other important issues. Use the site’s Medicare Plan Finder to sort through and compare the plans that are available to you.
You may want to seek out a financial advisor who can help you gain a deeper understanding of how healthcare costs can affect your current retirement strategy. It is that important to your finances and peace of mind. Here are some questions you may want to ask a financial advisor:
- How much should I consider setting aside to cover healthcare costs if I’m not eligible for Medicare yet?
- What are my best options for filling my coverage gaps, including long-term care?
- How are my health care costs likely to affect my other goals for retirement?
After you get those answers you can take action.
While it may take a little effort, it’s important to understand Medicare and how it will work for you. Even if you’re already enrolled and on a Supplemental or Advantage plan, it is important to check every year during open enrollment to make sure it is still the best plan for you.
Are you getting ready for Medicare? Are you helping a loved one to get the right coverage? Or are you already a participant and what advice do you have for those just getting started?