Medicare 101

Turning sixty-five can be a major milestone that, for many, offers more time to spend with family, the freedom to focus on hobbies, and even the chance to travel to new destinations. But, for many people, it also brings an important responsibility: signing up for Medicare. Due to the various deadlines and numerous plans available, though, the process can seem confusing at first glance. This guide helps break it down, making it much easier to understand.

The basic parts of Medicare

Medicare is the federal health insurance program designed primarily for people sixty-five and older, though it also covers certain younger individuals with disabilities. Think of it as a way to ensure that you have consistent coverage during a stage of life when health care often becomes more important. It is divided into several parts, each serving a different purpose.

Part A (hospital insurance)
This helps pay for hospital and nursing facility stays, hospice care, and some home health care. In addition, most people don’t pay a premium if they or their spouse paid Medicare taxes for at least ten years. (You can confirm by checking your pay stubs or via the Social Security Administration.) However, there is a $1,736 deductible per hospital admission per benefit period and possible copays for extended stays at both hospitals and skilled nursing facilities.

Part B (medical insurance)
Part B helps cover outpatient care, doctor visits, most preventive services, and durable medical equipment such as wheelchairs. This version requires a monthly premium (starting at $202.90, though it’s based on income) and has a $283 annual deductible. After that, Medicare generally covers 80 percent of approved services. Together, Parts A and B form what’s known as Original Medicare, the primary benefit of which is being able to see any provider that accepts Medicare.

Part C (aka Medicare Advantage)
Offered by private insurers approved by Medicare, these plans bundle Parts A and B and often include added benefits like fitness programs, vision, dental, and prescription drugs. Costs and coverage vary, and many have annual out-of-pocket maximums. However, your list of available providers may be more limited than Original Medicare, and you may need referrals for specialists and approval for certain services and supplies.

Part D (prescription drug coverage)
Finally, Part D helps cover the cost of prescription medications and is available from private insurance companies. Each plan has a formulary that lists covered drugs, and you can expect a separate premium, deductible, and copay.

Medigap (supplemental insurance)
This is an additional insurance plan you can purchase to help cover costs not paid by Original Medicare, such as deductibles and copays. It is sold by private insurers and is only available to those enrolled in Original Medicare, not Medicare Part C.

Key dates to know

Timing is critical when it comes to enrolling in Medicare. Your Initial Enrollment Period (IEP) spans seven months: three months before your sixty-fifth birthday, your birthday month, and three months after. Missing this window could mean waiting until the General Enrollment Period from January 1 to March 31 and facing late penalties added to your monthly premium.

However, there are a few situations where you normally wouldn’t have to worry about your Initial Enrollment Period. For one, if you’re already receiving Social Security or Railroad Retirement benefits before age 65, you are usually automatically enrolled in Parts A and B. You may also qualify for a Special Enrollment Period that allows you to sign up later without any penalty. For example, if you’re still working and have employer-provided health insurance, you can delay enrollment and sign up once you retire.

Also, keep in mind that after you enroll, you can change your coverage during the Open Enrollment Period from October 15 to December 7, such as moving between Original Medicare and Medicare Advantage. Any adjustments will go into effect on January 1.

Next steps

Before enrolling, you’ll need to carefully review your health-care needs and explore all the available plans. Doing the following can help you find the right plan:

• Consider your current health. Make a list of your regular doctors, any medications you take, and the health services you use most often.
• Use online comparison tools. Medicare.gov offers various tools to help you better understand your options, including the costs of different plans as well as in-network providers and facilities.
• Don’t be afraid to ask for help. A licensed Medicare agent can answer questions and walk you through the process step by step.

When it comes to Medicare, it’s important that you don’t wait until the last minute to prepare. By taking time to review your options now, you can make a more confident decision and ensure that you have the health-care coverage you need during your golden years.

For more info, visit medicare.gov