Seniors can experience a lot of changes as they approach their 65th birthday. One of these is becoming eligible for Medicare.
Medicare can be confusing for many older Americans — especially those used to receiving private health insurance through their employer. Moving to Medicare, including knowing when to sign up and which plan to sign up for, might seem like a challenge.
If you’re new to Medicare, there’s no need to stress! There are many resources available to help you navigate this transition and find the best healthcare coverage for you. Here’s an overview of the basics of Medicare to get you started.
Medicare is a federally regulated and federally run program that’s designed to offer affordable healthcare coverage to seniors and younger people who have certain disabilities. Most people become eligible for Medicare when they turn 65.
A portion of Medicare is funded by Social Security and Medicare taxes paid by individuals. If you worked in the United States for multiple years and paid taxes on your income, you may be eligible to receive Medicare Part A without paying a monthly premium. Other parts of Medicare typically include monthly premiums.
Medicare is mandatory for people over the age of 65, except for in certain circumstances — and if you don’t enroll in Medicare when you’re first eligible, you may be subject to late enrollment penalties. These penalties can increase the cost of your monthly premiums and may be permanent! Plus, failing to enroll in Medicare right away could leave you with gaps in your healthcare coverage or without any health insurance at all. That’s why it’s important to start preparing for Medicare before your 65th birthday, so you can have the coverage you need when you need it.
Medicare is not one-size-fits-all health insurance. There are multiple parts to the Medicare program, each of which allows you to find and select the coverage to best meet your needs.
The four main parts of Medicare are Parts A, B, C and D. You may have also heard of something called Medigap. While this type of insurance does not provide healthcare coverage on its own, it does supplement your Medicare coverage to help pay the costs for covered services.
Here’s what you need to know about the individual parts of Medicare.
Medicare Part A is hospital insurance. It includes coverage for inpatient hospital stays, skilled nursing care and some in-home or hospice care.
Medicare Part A is one half of what’s considered “Original Medicare” — the other half being Medicare Part B. Both Parts A and B are available after you turn 65 and are required for you to purchase Medigap insurance or enroll in a Medicare Advantage plan.
Most people qualify for premium-free Part A because they’ve paid into Medicare throughout their working years. However, you are responsible for a Part A deductible, coinsurance and copayments for hospital services.
Medicare Part B is medical insurance. It covers outpatient healthcare services like doctor visits, outpatient medical procedures, surgeries, diagnostic lab tests and some durable medical equipment.
Medicare Part B requires you to pay a monthly premium. This premium is set at a standard rate each year by the federal government for most enrollees. On top of this premium, you will be responsible for a standardized Part B deductible as well as copayments or coinsurance for services. There is no limit on how much you pay out of pocket for covered services each year with Medicare Part B.
Medicare Part C, also called Medicare Advantage, is not a form of coverage like Part A and Part B. Instead, Medicare Advantage plans are used in place of Original Medicare — they combine Part A and Part B benefits into one plan.
Medicare Advantage plans are offered by private insurance companies and are regulated by the federal government. They include all Medicare Part A and Part B benefits, plus additional benefits that go beyond Original Medicare. Depending on the plan, these benefits may include things like hearing aids, dental care, vision care and other wellness services. Many Medicare Advantage plans also include prescription drug coverage, which helps make them convenient.
There are a wide range of Medicare Advantage plans available to people eligible for Medicare. They come with a wide range of benefits and have different monthly premiums, deductibles, copayments and coinsurances.
If you enroll in a Medicare Advantage plan, you will pay your Part C premium on top of your Part B premium (and Part A premium, if applicable). However, Medicare Advantage plans are subject to maximum out-of-pocket (MOOP) limits, meaning there is a cap on how much you will spend on healthcare services in a given year.
Medicare Part D is prescription drug coverage. Part D plans are offered by private insurers and can be purchased in addition to Original Medicare or Medigap plans. Part D coverage can also be included in Medicare Advantage plans.
There are many different plans available under Medicare Part D. Each plan has a different formulary that includes different prescription drugs at varying costs. Part D plans also require a monthly premium that is paid to the insurance company.
Medigap is not a part of Medicare like the other four parts are. Instead, it’s supplemental insurance that helps fill the cost-sharing gaps left by Medicare Parts A and B.
Medigap policies are sold by private insurance companies and require a monthly premium. Depending on the plan you choose, your Medigap policy will help cover costs associated with Original Medicare, such as copayments, coinsurances and deductibles. To purchase a Medigap policy, you must be enrolled in Original Medicare. You cannot have a Medigap policy with a Medicare Advantage plan.
One mistake people who are new to Medicare often make is assuming they can enroll in Medicare at any time. In reality, there are specific time periods during which you’re eligible to enroll in Original Medicare, Medicare Advantage and Medigap plans.
Most people who are new to Medicare will enroll during what’s called the Initial Enrollment Period. This is a seven-month window beginning three months before the month of your 65th birthday and ending three months after your birthday month.
During this time, you are able to enroll in Medicare Parts A and B as well as Medicare Part D. If you decide a Medicare Advantage plan would meet your needs better than Original Medicare, you can also enroll in Part C during this time.
If you fail to enroll in either Original Medicare or Medicare Advantage by the time your Initial Enrollment Period ends, you may be subject to late enrollment penalties — and face a gap in healthcare coverage.
The Medicare Annual Open Enrollment Period runs from October 15 to December 7 of each year. This period allows existing Medicare users to change their Medicare plans for the upcoming year.
For example, if you’re new to Medicare and initially enrolled in Original Medicare but it’s not meeting your needs, you can switch to a Medicare Advantage plan during this period. You can also move to a different Medicare Advantage plan, or switch from Medicare Advantage back to Original Medicare. The changes you make during Open Enrollment will go into effect on January 1 of the following year.
If you missed your opportunity to enroll in Medicare for the first time during your Initial Enrollment Period, you have another chance to enroll during the General Enrollment Period. The period runs from January 1 to March 31 each year.
During this time, you can enroll in Medicare Part B if you’ve already enrolled in Part A. If you’re enrolled in a Medicare Advantage plan, you can switch to a different Medicare Advantage plan during this period. You can also drop it and switch back to Original Medicare.
Special Enrollment Periods are triggered by specific life events like losing healthcare coverage from an employer, experiencing a change in income or moving to a new location. During a Special Enrollment Period, you may be eligible to enroll in or change your Medicare plan. Check with an agent to determine whether you are eligible to enroll in Medicare due to a major life event.
There’s a lot to learn if you’re new to Medicare. Determining which Medicare plan is right for you comes down to exploring plan options and determining your unique healthcare coverage needs. Getting help from an expert can make a big difference!
PlanEnroll is a brand operated by Integrity Marketing Group, LLC and used by its affiliated licensed insurance agencies that are certified to sell Medicare products. PlanEnroll is not endorsed by the Center for Medicare & Medicaid Services (CMS), the Department of Health and Human Services (DHHS), or any other government agency. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
Vance Insurance Group Are You New to Medicare and Medicare Advantage? Turning 65 Seniors can experience a lot of changes as they approach their 65th birthday. One of these is becoming eligible for Medicare. Medicare can be confusing for many older Americans — especially those used to receiving private health insurance through their employer. Moving […]
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