Be Prepared When Turning 65 - Top 3 Things to Know about Medicare

Sponsored - With healthcare costs on the rise, having a comprehensive understanding of Medicare can be a game-changer in securing your health and financial well-being if you are preparing to apply for Medicare coverage. In this blog post, we will discuss the top three things you need to know about Medicare as you approach the age of 65.

Understanding the Different Parts of Medicare

Medicare is not a one-size-fits-all program. Instead, it consists of various parts, each covering specific aspects of your healthcare needs. Here’s a breakdown of the primary parts:

  • Medicare Part A (Hospital Insurance): This part covers inpatient hospital care, skilled nursing facility care, hospice care, and some home health care. Most people do not pay a premium for Part A if they or their spouse have paid Medicare taxes while working (minimum 40 quarters or 10 years).. Even though most people don’t pay for Part A monthly premium they must meet the hospital deductible which is $1600. The deductible resets every benefit period. In Part A, the maximum benefit period encompasses 60 full days of hospitalization along with 30 coinsurance days. In other words, when you exceed the 90 days you will have to pay $1600 to start a new benefit period.
  • Medicare Part B (Medical Insurance): Part B covers doctor’s services, outpatient care, preventive services, and medical supplies. It does require a monthly premium based on your income (IRMAA). For 2023, monthly premum is $164.90 for most Medicare beneficiaries. Part B also has an annual deductible which is obligatory to all Medicare enrollees and it is set at $226. Before your Part B coverage starts to kick in you must meet the deductible.
  • Medicare Part C (Medicare Advantage Plans): This is an alternative to traditional Medicare and is offered by private insurance companies. Medicare Advantage plans often include prescription drug coverage and additional benefits like dental and vision care. Also, all MA plans are obligted to cover all the same benefits as Part A and B do.
  • Medicare Part D (Prescription Drug Coverage): Part D helps cover the cost of prescription medications. It works alongside Original Medicare (Parts A and B). If you have Medicare Advantage plan it usually have Part D in their coverage package so you can’t purchase it separately. However, if you have Original Medicare coverage it is recommended to purchase standalone Part D plan from insurance companies. Before you determine which plan is good for you don’t forget to check drug formulary which can be subject to change every year. Drug formulary can help you to choose a plan which best sutis your medical needs. In 2023, an average monthly premium for Part D coverage is $31.50 an the deductible can’t exceed the amount of $505.
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Enrolling in Medicare at the Right Time

Timing is crucial when it comes to enrolling in Medicare. Missing deadlines can result in penalties and gaps in coverage. Here’s what you need to know:

  • Initial Enrollment Period (IEP): Your IEP begins three months before your 65th birthday, includes your birthday month, and extends for three months after. During this time, you can enroll in Medicare Parts A and B without penalty.
  • General Enrollment Period (GEP): If you missed your IEP, you can enroll in Medicare during the GEP, which runs from January 1 to March 31 each year. However, you will face a late enrollment penalty for Part B (if w assume that you had applied for part A during IEP) if you decided to delayed it during your IEP but later you have found out that you don’t have creditable coverage. Part b late enrollment penalty is a 10% from your monthly premium amount for each you you could have applied but choosed not to.
  • Special Enrollment Periods (SEPs): Some individuals may qualify for SEPs, which allow them to enroll in or make changes to their Medicare coverage outside of the IEP or GEP. Common triggers for SEPs include retiring after age 65, losing employer-based coverage, or moving to a different state. if you didn’t have other creditable coverage such as large employer group plans, federal employee health plans and union health plans. In other words, if you have worked in a company that had less than 20 employees and turned 65, Medicare pays first so your employer health plan don’t count as creditable coverage.
  • Medicare Advantage and Part D Enrollment: The enrollment periods for Medicare Advantage and Part D plans may differ from those of Original Medicare. For Part D coverage there is an Annual Enrollment Period which runs each year from October 15th till December 7th. During this period you can add, drop or change your Part D coverage. Typically you can enroll in Medicare Advantage plan when you have an existing Part A and B coverage.

Evaluating Your Medicare Coverage Options

As you approach 65, you’ll likely receive a bunch of information about Medicare plans. It’s essential to take the time to evaluate your options carefully. Here are some key considerations:

  • Original Medicare vs. Medicare Advantage: Decide whether you want to go with Original Medicare (Parts A and B) or a Medicare Advantage plan (Part C). Original Medicare provides nationwide coverage and allows you to see any doctor who accepts Medicare, but it may require additional coverage like Part D and Medigap plans for comprehensive benefits. On the other hand, Medicare Advantage plans are offered by private insurers and often include prescription drug coverage and other benefits, but they may have network restrictions.
  • Medigap Plans: If you choose Original Medicare, you may want to consider a Medigap (Medicare Supplement) plan. These plans help cover out-of-pocket costs, such as deductibles and coinsurance, that Original Medicare doesn’t cover. There are several standardized Medigap plans to choose from, each offering varying levels of coverage. Plans are named from letters A to N and Medigap policies help you the get the most of your Medicare coverage.
  • Prescription Drug Coverage: If you take prescription medications, it’s good to enroll in a Part D plan unless you have creditable drug coverage through another source, like an employer or union. Be sure to compare Part D plans based on the specific medications you need, as formularies and costs can vary widely.
  • Provider Networks: If you opt for a Medicare Advantage plan, consider the network of doctors and specialists included in the plan. Make sure your preferred healthcare providers are in-network to minimize out-of-pocket costs.

Author: Matt Temmen, CEO and owner of Missouri Insurance Advice and Temmen Insurance