Get ready for Medicare. Learn how it works and consider the choices you should make before it’s time to enroll. Otherwise, you will get confused and the mistakes can give you unexpected expenses.
You can enroll in Medicare Part A during a 7-month period: the three months before you turn 65, the month in which you become 65, and the following three months. When you enroll, your coverage begins immediately. If you don’t sign up, you have to wait for the next general enrollment period, which runs from January 1 through March 31. Coverage starts on July 1 of the year in which you enroll. ( If you already get Social Security benefits, enrollment is automatic and you will get the red white and blue Medicare card in the mail three months before you turn age 65.)
You can enroll by calling Social Security at 1-800-772-1213. The TTY number for those deaf or hard of hearing is 1-800-325-0778. Or you can apply online.
This enrollment gets you Medicare Part A, which covers hospital bills. Part A is free. So it makes sense for everybody to enroll, whether or not they are working.
Your next decision deals with Medicare Part B, which covers doctor bills and hospital stays. Part B has a monthly premium, ranging from $104.90 to $335.70, depending on your income. Most people, individuals with income up to $80,000, and married couples with incomes up to $170,000 a year, pay the monthly premium of $104.90. The premium maxes out at $335.70 a month for individuals with incomes above $214,000 and couples with incomes above $428,000.
If you are 65, working and have health care coverage, check with your employer about how this coordinates with Medicare. You probably won’t need to enroll in Part B because you have the coverage at work.
Medicare and you coverage at work combine to pay your bills. Let’s say If you ate 65 or older, and you have group health coverage yourself on the job or through your spouse’s work coverage. If the company has less than 20 workers, Medicare pays first and your company coverage pays second. If the company has more than 20 workers, the group health plan pays medical bills first and Medicare pays second.
When your coverage at work ends, you have eight months to sign up for Part B without a financial penalty. NOTE: Retiree health coverage and COBRA coverage DO NOT COUNT as regular coverage.You need to enroll within eight months. COBRA coverage is what you can choose if you have gotten laid off from a job, or you have divorced a spouse who was covering you through work-based coverage. COBRA can last 18 months. DON’T WAIT till COBRA ends. Enroll within the 8-month period. If you don’t you will pay a permanent financial penalty, added to your Part B premium. And you won’t be able to enroll until the next general enrollment period. It runs from January through March and coverage won’t begin until July.
HOW DO YOU WANT TO RECEIVE YOUR MEDICARE COVERAGE?
You have two ways to approach your Medicare coverage. Most people, about 72% of the 50 million folks enrolled in Medicare, belong to original Medicare, which means they can get care from any of the hospitals and doctors participating in the Medicare program.
They have already signed up for Part A, and now they need to enroll in Part B, which covers doctor bills. The cost for Part B is $104.90 a month this year for single persons with incomes below $85,000 a year and married couples with incomes below $170,000 a year. It rises for those with higher incomes and The premium maxes out at $335.70 a month for individuals with incomes above $214,000 and couples with incomes above $428,000.
You also need to select a plan to cover prescription drugs, known as Part D of Medicare.
Since co-payments and deductibles may be costly, about 25% of Medicare beneficiaries also decide to buy a supplemental insurance policy, known as Medi-gap coverage. That gives you an alphabet soup: Part A for hospital bills, Part B for doctor bills, Part D for drug bills, and Medi-gap to fill in the extra costs you may face. Part B costs $104.90 a month, Part D has an average premium of about $30 a month, and Medi-gap averages $183 a month. Even with all those coverages, Medicare does not pay for routine dental care and eye care.
The alternative form of coverage is called Medicare Advantage, or Medicare Part C, and is used by 28% of the people enrolled in Medicare.
Under this program, people enroll with health maintenance organizations (HMOs), or Preferred Provider Organizations (PPOs) to receive their health care. You will receive your care from doctors and hospitals within the network operated by the HMO or PPO you have selected. In return, you will get extra benefits, such as prescription drugs, eye care, and dental care. You can reduce your insurance costs, compared with original Medicare. Part C premiums vary by plan.
How do you find and compare the plans?
Go to the Medicare.gov website and click on the tab that says Find Health and Drug Plans
Which should you choose, original Medicare or a Part C plan? It depends on your health and your doctors. Are you running races, playing tennis, and taking no pills except a multi-vitamin? Or do you have high blood pressure, and you are 30 pounds overweight, and suffer from a bad case of arthritis, and you see several specialists. If you have this roster of doctors, you will want to stick with them, and original Medicare offers the easiest way to do that.
For the man or woman racing tennis player, it probably makes sense to find a good Part C plan, with a reasonable price and a network of doctors in your home area. So Part C likely will work for you.
