When you reach 65, you will probably need to sign up for Medicare. Before you rush to sign-up, there are some things you need to know about Medicare that may affect your choices.
What Are You Signing Up for?
Medicare Part A provides coverage when you need inpatient care in a hospital, a skilled nursing facility, a hospice, and care at home. It does not provide for long-term care.Medicare Part B enables you to get services from doctors and others who provide health care, care as an outpatient or at home, preventive services (such as cardiac screenings, mammograms, colonoscopies, wellness visits) and durable medical equipment.
Medicare Part C is also called Medicare Advantage. According to Medicare.gov, Medicare Part C is an “all in one” alternative to Medicare, bundling the benefits of Parts A, B, and usually Part D. Because Medicare Advantage is run by private insurance companies, it may feel more like a traditional HMO or PPO insurance plan.
Medicare Part D covers prescription drug costs.
Medigap: Medigap is supplemental insurance that covers gaps in original Medicare. Medigap plans are also named alphabetically.
Who Must Sign Up?
Generally, you will need to sign up for Medicare when you turn 65. However, some people with specific health problems may get Medicare coverage before turning 65.In addition, Medicare says that people still working and covered by job-based insurance—or those with a spouse with group health insurance coverage—do not need to sign up while covered under these plans.
The Sign-Up Window
The time to sign up for Medicare is a window of seven months around your 65th birthday. You have between the three months before your birthday month, your birthday month itself, and until three months after your birthday to enroll.If you don’t sign up when you’re first eligible, you may qualify for a special enrollment period, or you may have to wait until the Medicare general enrollment period, from January—March 31. However, you may face late enrollment penalties.
If you are already receiving Social Security, you don’t have to worry about signing up for Part A: coverage is automatic once you turn 65.
Penalties for Late Sign-Ups
Medicare Part A is free for most Americans with a work history. If you do have to pay premiums for Medicare Part A, you will have to pay a late enrollment penalty for not signing up when you are eligible. That penalty would last for twice the number of years you could have paid premiums for Part A, but didn’t.However, if you do not sign up for Medicare Part B within the sign-up period, you may regret it for the rest of your life. You will likely have to pay a penalty that will increase your monthly premium by 10 percent for every 12 months you are late. And that additional cost will have to be paid the rest of the time you are on Medicare. So be sure to catch this window to save money.
The exception, Kiplinger says, is if you are working and currently covered under an employer’s health insurance plan. If so, you have up to eight months after you end that coverage—and no penalty will be applied.
Getting Extra Protection With Medigap
Medigap is optional when you buy original Medicare—but you should get it because it helps to cover “gaps” in your coverage that the other plans miss. The “gaps” are additional costs such as deductibles, coinsurance, and copayments. They can leave you with considerable debt if you develop major health problems. Medgap helps with the cost of these gaps, and will also pay up to 80 percent of emergency costs when traveling abroad.Medigap plans are sold by independent insurance companies, not by the government. There are a variety of Medigap plans, but because they are standardized, they cover the same things no matter who sells them. The difference is that the costs may vary between companies selling them.
Medicare says you have up to six months to get a Medigap policy after your Part B coverage starts. If you buy Medigap coverage during this initial enrollment period, your health status does not matter. If you wait to enroll, pre-existing conditions may affect your Medigap coverage.
Original Medicare vs. Medicare Advantage
Original Medicare consists of three parts—A, B, and D. The Medicare Advantage plan, which is Medicare Part C, is a combination of Parts A, B, and D.Medicare Advantage Plans provide more benefits than the original Medicare, including vision, dental, hearing, and possibly fitness, and may offer more preventive care services. Many companies offering Medicare Advantage also provide other benefits, such as freebies (some supplements, over-the-counter medications, and basic medical equipment), which you can order monthly or quarterly at no cost.
According to the Centers for Medicare and Medicaid Services, about 40 percent of those enrolled in Medicare in 2021 (63,964,675) chose to go with Medicare Advantage (27,919,354).
Medicare Advantage plans may provide more benefits than the original Medicare, including vision, dental, hearing, and preventive care services. Azrin Aziri/Shutterstock
Although the basic coverage offered by Medicare Advantage plans will be about the same because the government oversees these plans, you will want to take a closer look at the details of Medicare Advantage plans in your area. There may be additional benefits in various Advantage plans.
The cost of Medicare Advantage premiums may differ between companies. Some companies will not require an additional premium above what you pay for Parts A and B. You may also find that some companies offering Medicare Advantage plans will not have any deductible for medical services or drug costs.
Before getting a Medicare Advantage plan, you must enroll in Medicare Parts A and B. Once enrolled in Medicare, you will contact the Medicare Advantage plan provider of your choice to apply.
Medicare Versus Medicare Advantage: Pros and Cons
Choice of Doctors and Specialists
The original Medicare plans allow you to go to just about any doctor or specialist—even without a referral. You can do this because most doctors accept Medicare. (Although eHealthInsurance says that only about 70 percent of doctors that accept Medicare are accepting new patients.)Medicare Advantage plans operate more like a private insurance company. Your choice of doctors is limited to those within the plan. Before seeing any specialists, you may need to be referred by a primary care physician. Before signing up, make sure that there are doctors on that plan accepting new patients, specialists if you know you will need them, and hospitals in your area on the plan.
Out-of-Pocket Costs
Original Medicare does not have a ceiling on out-of-pocket costs—in other words, it offers no financial protection. You could end up paying much more than you ever wanted to if you develop a serious health condition.Medicare Advantage plans provide a ceiling on your out-of-pocket costs. EveryDayHealth says that the protection that Medicare Advantage offers is why many people choose those plans. They offer a known limit to possible financial cost, including deductibles, copays, and coinsurance.
However, AARP cautions that with Advantage plans you may end up paying more for co-pays if you have to go out of network. And, due to co-pay and coinsurance costs, says Kiplinger, out-of-pocket costs can actually run higher for Medicare Advantage. Unless you are in good health, a better option might be to combine original Medicare with a Medigap plan.
Part D, which pays for prescription medicines, is supplemental to original Medicare. If you get it, you may end up paying more than you would for an Advantage plan that includes drug costs. Part D does offer some protection once you reach a specified out-of-pocket amount ($6,550). At that point, WebMD says, catastrophic coverage will begin—but you still must pay 5 percent of the cost.
The Veterans Administration and Medicare
If you are a veteran, you may have access to medical benefits from the Veterans Administration (VA). Veterans over 65 may also get Medicare Part B if they choose to do so. MedicareInteractive says that the two agencies do not work together, which means that one agency will not cover services provided by the other one. Veterans can get some benefits from one agency that the other may not provide. If you have VA benefits but do not enroll in Medicare, you will not have coverage for facilities outside the VA system.The Epoch Times Copyright © 2022 The views and opinions expressed are only those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
