1. KNOW WHEN AND WHERE TO ENROLL
Once you turn 65, you qualify for Medicare. However, you can begin the enrollment process three months before turning 65. Upon your 65th birthday though, you only have three months to enroll before you incur penalties that can permanently impact your premium. Exceptions do apply to the age requirement. For instance, those with a disability or a special condition or those who receive benefits from Social Security or Railroad Retirement Board may qualify for Medicare prior to age 65; or, they could be automatically enrolled once they turn 65.
To enroll in Medicare, you must go to the Social Security office or online at www.socialsecurity.gov. To determine you eligibility and calculate your premium, go to www.medicare.gov.
2. EVALUATE CURRENT COVERAGE
Are you or your spouse covered by an employer’s plan? If so, ask the benefits administrator if they require you to enroll in Medicare. If not, then you can enroll later without being penalized. Once you drop your employer’s coverage, then you qualify for a special enrollment period (SEP) at which point you can enroll in Medicare.
Another matter to check with your employer is if your prescription drug coverage is creditable after turning 65. It must be at least equal to the drug coverage offered by Medicare. If not, then you may be subject to another late penalty.
3. UNDERSTAND THE MEDICARE BASICS
If you’re not covered by an employer or former employer, there are two main ways to get Medicare coverage: Original Medicare and Medicare Advantage. If you opt for Original Medicare, then you can also purchase a Part D drug plan or Medicare Supplement.
Original Medicare (Parts A and B) and Part D Prescription
Medicare Part A covers inpatient stays, skilled nursing facilities, and hospice care. As for Part B, Medicare covers doctor services, outpatient care, medical supplies, and preventative care. These two parts make up what is called Original Medicare – the bare bones of Medicare. They do not include value-added benefits or services like dental and vision or health management programs. It’s just the essentials. However, most prescription drugs are not covered by Original Medicare. Therefore, a separate Medicare prescription drug plan (Part D) is required.
If contributed to during employment, Part A will have no premium. As for Parts B and D, there is a monthly premium. Some people also opt for an added cost supplement, which can be purchased at any time. Medicare Supplements (Medigap) are available through private insurance companies. Essentially, they create more comprehensive coverage by covering medical costs not covered by Original Medicare.
Medicare Advantage (Part C)
Offered by health insurance companies, Medicare Advantage (Part C) replaces Original Medicare. It provides the same level of coverage as Original Medicare, as well as other benefits not coverage by Original Medicare. With some Medicare Advantage plans, the consumer gets dental, hearing, vision, annual physicals, and wellness benefits – all of which are not covered by Original Medicare. In addition, Medicare Advantage plans also provide prescription drug coverage (Part D). For some, Medicare Advantage is preferable as it is convenient having all one’s Medicare benefits administered by one policy. As for price, monthly premiums vary by company and change annually.
4. AVOID LATE PENALTIES
Failing to meet the enrollment deadline for Medicare can result in steep penalties that are oftentimes permanent. Because of the long-term consequences for late enrollment, it’s best to contact a licensed agent. They can keep you apprised of enrollment deadlines and answer any questions you may have.
5. REMEMBER OPEN ENROLLMENT
From October 15 to December 7, there is an open enrollment period – the Annual Election Period (AEP). This enrollment period is not only for new enrollees though. Whether you’ve just turned 65 or you’ve been on Medicare for years, you can take this time to evaluate your options. It’s an opportunity for Medicare recipients to revisit their plan and make the necessary changes to meet their current needs. This is the only time in the year when consumers can make changes to their Medicare Advantage or prescription drug plan.
Some questions to ask yourself and discuss with your agent are:
- Has your health changed?
- Are you happy with your current plan?
- Did you have significant out-of-pocket costs?
- What were these costs for?
- Will your current plan change in the coming year?
Having these answers prior to open enrollment will help you make smart choices.
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