As you approach your 65th birthday, there is a lot you need to learn about Medicare and fast. Once you turn 65, you are automatically enrolled in Medicare Part A and B, also known as government or original Medicare. However, these two automatic Medicare plans do not cover all of your health insurance costs as you age. To help you navigate the additional plans that are available, here are seven tips about Medicare that will help you decide the right plan for you.
Tip #1: Original Medicare is not free.
Original Medicare is given to you automatically because you have been paying into your Medicare program via taxes your whole working life. However, Medicare Parts A and B does not cover all of your costs – you will still have to pay a monthly premium and copays as needed. This can quickly add up.
Tip #2: There are supplemental plans you can choose from to cover out-of-pocket costs.
Arguably the most important of the tips about Medicare are understanding the different supplemental options. There are two main options to choose from when you want to help pay for the extra costs associated with Medicare. The first option is Medicare Supplemental that can cover a majority of the extra costs associated with Medicare AND/OR Medicare Part D that helps control prescription drug costs. The second option is Medicare Advantage, also known as Medicare Part C, that combines Parts A and B and provides additional benefits like covering prescription drug costs.
Tip #3: Choices for supplemental Medicare plans vary by state.
While original Medicare is the same across the country because it is a federal program, the other supplemental plan options are offered by private companies. This means certain plans or options will be different state-by-state and possibly by region as well. Research what Medicare supplemental options are available in your state.
Tip #4: Choosing a supplemental plan is the only way to help curb prescription drug costs in Medicare.
Original Medicare does not provide prescription drug coverage, making this a very pricey out of pocket expense. If you choose to go with a Medicare Supplemental plan, you can add Medicare Part D additionally to cover those out-of-pocket costs. You can also enroll in Medicare Part D without subscribing to any additional Medicare coverage outside of Parts A and B. The other option you have is to go with Medicare Advantage which includes prescription drug costs in the plan.
Tip #5: Know when to enroll to get your plan and avoid penalty.
IEP: Medicare enrollment has an Initial Enrollment Period (IEP) that provides your first and most important time to enroll in Medicare. The period covers the three months before your 65th birthday, the month of your birthday, and the three months afterwards. Enrolling in the three months before your birthday month means coverage starts on the first day of your birthday month. If you enroll during your birthday month or later, the coverage will start on the first day of the month following your enrollment. Beware – if you enroll after the IEP, you may see increased cost in your plan and/or reduced coverage.
OEP: After you initially enroll, you are able to make changes to your Medicare plans once per year during the Open Enrollment Period (OEP). This period spans from October 15-December 7. This is the perfect time to drop coverage you don’t want to pay for anymore or add plans that will help cover some of the expenses you had in the previous year.
SEP: There are special circumstances where you can enroll and/or change plans outside of the IEP and OEP. This is known as the Special Election Period (SEP). Much like special circumstances in changing healthcare plans, you are awarded the SEP if you retire and leave a healthcare plan through an employer or union OR you move out of your current health plan’s coverage area.
Tip #6: Not enrolling in additional prescription drug coverage can result in a penalty.
Since original Medicare does not cover prescription drug costs, you may have to pay a penalty if you do not add Part D or Medicare Part C as you are enrolling in Medicare. If you qualify for an exception, you do not have to pay for Part D.
Tip #7: Evaluate your current healthcare before settling on a Medicare plan.
If you have coverage from an employer or retiree insurance as you approach your 65th birthday, you will need to evaluate your current healthcare coverage and decide which Medicare plan will work with it.
Extra Tips About Medicare
Even with these tips about Medicare, deciding on the best Medicare coverage for your needs can be confusing. What is important to remember is there is plenty of help available. There are numerous Medicare resources online that can help you define certain aspects of Medicare. However, the best thing you can do is get personalized help from a Medicare professional.