Annoying. Difficult. Frustrating. For anyone who has applied to Medicare, these are the typical words that come to mind when describing the application process.
Part of the problem is that there’s no easy, one-size-fits all coverage option. The other part of the problem is that in an underfunded system, everyone’s on their own to navigate through as best they can.
So, what can you do to maximize your Medicare coverage while minimizing your expenses and stress? Give yourself plenty of time and read these top 10 things to know about Medicare before you turn 65:
1. Start the Application Process Early
Applying for Medicare is a complicated and lengthy process. How much time should you give yourself to apply? You should start your research when you turn 64.
2. Apply Before You Turn 65
Applying for Medicare on your 65th birthday is not ideal. You must apply during the initial enrollment period three months before your 65th birthday. This enrollment period ends four months after your 65th birthday.
3. If You Miss Enrollment, You’ll Have to Pay Penalties
If you miss the initial enrollment period, you can still sign up for Medicare during the general enrollment period which runs from January 1-March 31. People who sign up during the general enrollment period will be eligible for coverage the following July.
Late enrollment penalties apply for people who miss their initial enrollment period. Depending on the part of Medicare that you apply for, these penalties can vary from 10% for every 12 months you delay enrollment or 1% per month.
4. After You Turn 65, Medicare Is Your Primary Insurer
Do you have another form of insurance? Once you turn 65, Medicare is considered your primary insurer. This is true even if you haven’t applied for Medicare yet. It’s also true even if you have retiree health insurance, individual health insurance or COBRA.
This consideration is an important factor to know and understand because it means that you can’t count on your other forms of insurance to pay for your hospital or physician bills once you turn 65. These other insurance companies are considered your secondary insurer.
5. Medicare Coverage Is Composed of Four Main Parts
When you’re researching Medicare, you’ll inevitably come across terms like Part A, Part B, Part D and Medicare Advantage Plans. What do these mean?
According to Medicare Interactive:
Medicare Part A refers to hospital insurance and “covers most medically necessary hospital, skilled nursing facility, home health, and hospice care. It is free if you have worked and paid Social Security taxes for at least 40 calendar quarters (10 years); you will pay a monthly premium if you have worked and paid taxes for less time.”
Medicare Part B refers to medical insurance and “covers most medically necessary doctors’ services, preventive care, durable medical equipment, hospital outpatient services, laboratory tests, x-rays, mental health care, and some home health and ambulance services. You pay a monthly premium for this coverage.”
Medicare Part C refers to Medicare Advantage Plans. With these plans, private health insurance companies have contracts with the government. The Medicare Advantage Plans are not provided directly by the government like Medicare is. Many resources about Medicare often skip Part C when talking about Medicare benefits because it is not a separate benefit like Parts A, B and D.
According to Medicare Interactive, “Part C is the part of Medicare policy that allows private health insurance companies to provide Medicare benefits. These Medicare private health plans, such as HMOs and PPOs, are known as Medicare Advantage Plans. If you want, you can choose to get your Medicare coverage through a Medicare Advantage Plan instead of through Original Medicare.”
Part D refers to Medicare’s prescription drug insurance. Part D “provides outpatient prescription drug coverage and is “provided only through private insurance companies that have contracts with the government—it is never provided directly by the government (like Original Medicare is),” Medicare Interactive explains.
6. Choose Your Plan Wisely
You can choose either the original Medicare (Part A), or a Medicare Advantage Plan (Part C). You can also opt for the other parts as mentioned above, like adding prescription drug insurance, for example.
What type of Medicare do you want? That really depends on your unique circumstances, so there is no “right” answer here. But, there are some things to consider when choosing between Original Medicare and a Medicare Advantage Plan.
With Original Medicare:
You can usually choose to see any doctor (but check with the doctor first as some have dropped out of the original Medicare program) – This is a critical step if it’s important for you to remain with your family doctor
You may have more out-of-pocket costs
You will have a choice of the drug plans available in your area
7. On Social Security? You May Automatically Be Enrolled in Medicare
If you’re on social security (which you can begin at age 62), then you should be automatically enrolled into Medicare Part A and/or Part B when you turn 65. If you are a retired rail worker, and receive Railroad Retirement Benefits (RRB) then you should also be automatically enrolled in Medicare.
Of course, if you think you’ll be automatically enrolled in Medicare, it doesn’t hurt to double check that assumption well in advance of your initial enrollment period.
8. You Can’t Enroll in Medicare as a Family
Medicare is an individual benefit and each member of your family needs to apply for Medicare separately. There are no family Medicare plans.
9. You Can Supplement Medicare with a “Medigap” Policy
If you can afford it, it is possible to supplement Medicare with a “Medigap” Policy. This supplement will pay for expenses not covered by Medicare, like:
Coinsurance (the portion of money you pay after your insurance has paid your benefit)
Co-payments (the money you pay each time you seek care)
Deductibles (money you pay before your insurance benefits kick in)
There is a separate, six month initial sign up period for Medigap and not everyone is approved.
10. Record Details About Medicare Information
If a government official gives you incorrect information that causes you to miss your initial enrollment period, then you may not have to pay the entire penalty. However, you have to be able to prove that the government official gave you incorrect information.
Remember to take details about who you spoke to, the date and time, what they said, their contact information and any other pertinent information. You should do this every time you speak with someone in the government about Medicare.