Navigating the Medicare Maze.
In our last blog, we explored some helpful tips to make your transition into retirement a smooth one. In addition to plans for retirement income and Social Security, you should develop a strategy for your Medicare coverage. Once you’re eligible to enroll in Medicare at age 65, it’s important to get it right. Medicare can be complicated, and if you’re like most people, you may be confused about how to transition from your current healthcare coverage to Medicare and when you need to do it. Let’s take a look at some common Medicare questions and answers:
When am I eligible for Medicare coverage?
Normally, your health insurance coverage under Medicare begins when you reach age 65. (However, you also may be eligible for Medicare at any age if you are diagnosed with end-stage renal disease or another qualifying disability.) When you do become eligible, it’s important to remember to sign up within the seven-month timeframe that begins three months before the month you turn 65 and ends three months after the month you turn 65. If you miss this initial deadline, your coverage will be delayed because you'll have to wait until the next general enrollment period and your coverage won't be effective until the following July. You also may have to pay more for some of your coverage at that time.
Will Medicare contact me to let me know I’m eligible?
If you’re already receiving Social Security benefits, you’ll receive information about Medicare in the mail three months before you turn 65 and you will be automatically enrolled in both Part A and Part B. If you aren’t receiving Social Security benefits, you will not receive any notification of eligibility.
How do I enroll in Medicare?You enroll in Medicare by contacting your local Social Security office. You can do this online, over the phone, or in person at your local Social Security office. Call 800-772-1213 or visit https://www.ssa.gov/benefits/medicare/ to sign up for Medicare Parts A and B, or to find the location of your local Social Security office.
How do I sign up for Medicare if I’m still working at age 65?If you retire after age 65 and have employer-sponsored health coverage, you’ll have an eight-month special enrollment period to sign up for Part A and/or Part B. This special enrollment period starts the month after your employment ends or the group health plan insurance based on current employment ends, whichever occurs first.
What choices will I need to make?The structure of the Medicare health insurance program is very different from private healthcare insurance. Not only are there different categories of insurance to consider, but there are also many options within each category:
- Part A - Hospital insurance: After you pay an annual deductible, this insurance kicks in to pay for hospital stays, certain treatments and procedures performed in the hospital, care at a skilled nursing facility, and hospice care. There are no monthly premiums for Part A.
- Part B - Medical insurance: Medicare Part B was designed to pay for many of the health care costs not covered by Part A, including doctor visits, outpatient hospital care, physical and speech therapy, lab tests, blood transfusions, medical equipment and supplies, and ambulance services. This portion of basic Medicare is voluntary, and, premiums are based on the modified adjusted income on your federal income tax return.
- Part D - Prescription drug coverage: Prescription drug coverage is not included in the original Medicare (Parts A and B) or Medigap supplemental policies. Unless you have this coverage elsewhere, you may want to think about buying a Medicare Part D policy to help pay for your prescription medications.
- Medicare Advantage: You can purchase an all-in-one managed care Medicare Advantage plan that provides your Part A and Part B coverage. Some Medicare Advantage plans also cover other services that are not covered under Parts A and B, and many include Part D prescription drug coverage.
- Medigap (supplemental) policies: You may have other health care costs that won’t be covered by either Part A or Part B of Medicare, such as deductibles and co-payments. Unless you have other health insurance, you may want to consider purchasing a Medigap policy that gives you the extra coverage you may need. Medigap policies are offered by private insurance companies, and there are a variety of plans to choose from, based on the services you wish to have covered.
Can I make changes to my Medicare selections every year?Yes. The Medicare open enrollment period runs from October 15 through December 7 annually. This gives you the opportunity to re-evaluate your situation every year and make any changes you desire.
Take time to understand the intricacies of Medicare. You and your spouse or partner may have different needs and may be better off choosing different Medicare plans. It’s smart to do your homework, shop around, and compare prices. To learn more or to get started on your personal financial plan, please contact us today.