8 Things Everybody Should know About Medicare

Navigating Medicare can feel like wandering through a maze, especially if you’re new to it. It’s significantly different from the coverage you’re used to from an employer or through the Affordable Care Act. Starting your research early is critical as you approach Medicare eligibility so you can prepare and avoid making mistakes. Here’s a straightforward guide to help you understand the essentials before starting Medicare.

1. What is Medicare

Medicare is a federal health insurance program for people aged 65 and older. However, it also covers those under 65 with disabilities or specific diseases like End-Stage Renal Disease and ALS. Understanding the basic structure of Medicare and when you are eligible are important so you’re aware of your coverage and when it can start.

2. Medicare Parts Explained

Medicare is divided into four main parts:

• Part A (Hospital Insurance): Covers inpatient hospital stays, hospice, skilled nursing facility care, and some home health care services. Most people don’t pay a premium for Part A if they have worked in the US for at least ten years and have paid Medicare taxes.
• Part B (Medical Insurance): Covers outpatient care, doctor visits, durable medical equipment, and preventive services. Part B requires a monthly premium, which can vary based on your income.
• Part C (Medicare Advantage): This private insurance plan combines Parts A and B and often includes Part D (prescription drug coverage). Many plans offer additional benefits like vision or dental, Part B premium reimbursement, and gym memberships.
• Part D (Prescription Drug Coverage): These plans help cover the cost of prescription medications. You can get it as a standalone plan from a private insurance carrier.

Understanding these parts and how they coordinate is key to maximizing your coverage and minimizing out-of-pocket costs.

3. Enrollment Periods Matter

Timing is everything with Medicare. When it comes to Medicare, there are enrollment periods when you can choose plans and enroll. Missing an enrollment period could result in a late enrollment penalty, so you want to research these ahead of time. Here are the main enrollment periods:

• Initial Enrollment Period: This is a seven-month window that starts three months before your 65th birthday, includes your birthday month, and ends three months after. During this window, you can apply for Original Medicare, Medicare Advantage, and a Part D plan.
• General Enrollment Period: If you miss your initial period, you can enroll between January 1 and March 31 each year, with coverage starting on the 1st of the following month. The GEP is for Original Medicare.
• Special Enrollment Periods: Certain life events—like moving, losing other health coverage, or qualifying for Medicaid—can trigger special enrollment options. A Special Enrollment Period for Original Medicare opens an 8-month window. However, there are Special Enrollment Periods for Part D or Medicare Advantage in which you would get a 2-month window to enroll in either of those plans.

Missing these windows can lead to penalties or gaps in coverage, so be aware of your options.

4. Costs Can Vary

Medicare isn’t free. While many people don’t pay for Part A, there are costs associated with the other parts:

• Part A: There’s usually no premium if you’ve worked enough. However, deductibles and coinsurance apply for hospital stays.
• Part B: There’s a standard monthly premium (which can increase based on your income) and an annual deductible. After that, you typically pay 20% of the Medicare-approved amount for services.
• Part C and D: Costs, including premiums, deductibles, and out-of-pocket maximums, can vary widely depending on the plan.

Make sure you understand what you’ll pay for each part. Budgeting for these costs is essential for managing your overall health expenses.

5. Preventive Services are Key

Medicare offers a range of preventive services at no cost to you (as long as you’ve met the criteria). These include:

• Annual wellness visits and the one-time Welcome to Medicare visit
• Screenings for cancers (like mammograms and colonoscopies)
• Vaccinations (like flu shots)

Utilizing these services can help catch health issues early and save you money in the long run.

6. Medigap Policies

Medigap (Medicare Supplement Insurance) can help if you’re worried about out-of-pocket costs. These private policies fill in the gaps left by Medicare Parts A and B, covering copayments, coinsurance, and deductibles.

Here’s what you should know:

• You have a six-month Medigap Open Enrollment Period, which is six months from your Part B effective date. When you enroll during this time, you don’t have to answer health questions. After that window, you will likely need to answer health questions to apply for a plan.
• Medigap policies are standardized in most states, offering the same basic benefits, but premiums can vary. For example, Medicare Plan G coverage is the same no matter which carrier you choose, but the premium will be different.

Understanding Medigap options can provide peace of mind, especially if you anticipate needing more healthcare services.

7. The Coverage Gap in Part D

Part D plans have a “coverage gap,” often called the “donut hole.” This means that after you and your plan have paid a certain amount for your covered drugs, you may pay more out of pocket until you reach a catastrophic coverage level.

The coverage gap will remain until the end of 2024. However, in 2025, it will disappear, and there will be a $2,000 cap on out-of-pocket costs instead. This can be beneficial for many seniors who cannot afford their expensive medications.

Staying informed about your Part D coverage can help you budget for prescription costs.

8. Don’t Go It Alone

Medicare can be overwhelming, but you don’t have to figure it out yourself. There are numerous resources available:

• Experienced Medicare broker: Medicare brokers can offer several insurance carriers and plans, allowing you to compare your options in one place.
• State Health Insurance Assistance Programs (SHIPs): These offer free, personalized counseling to help you understand your options.
• Medicare’s Official Website: This is a great source for information and tools, including plan comparisons.
• Local Senior Centers or Community Organizations: Many offer workshops or one-on-one assistance with Medicare questions.

Utilizing these resources can help demystify Medicare and ensure you make informed decisions about your healthcare coverage.

Conclusion

Medicare is a crucial program that can significantly impact your health and finances. Understanding its components, costs, and enrollment rules can help you navigate it more effectively. Don’t hesitate to seek help if needed—getting the right coverage is essential for your well-being. By staying informed and proactive, you can make Medicare work for you.