Even if you haven’t turned age 65 yet, chances are that you are considering what moving to Medicare for your health care coverage when you become eligible or decide to retire. Unlike in the past, when only Original Medicare (Part A and Part B) were available, today there are a number of different ways that you can configure your Medicare coverage.
There are literally thousands of combinations out there for you to choose from. Before you get overwhelmed, it is important to know what your alternatives are, and which one may be the best for you. With that in mind, i’d say it’s never too early to start educating yourself and shopping for your Medicare coverage. You’ve also got to be familiar with the rules around when you’ll actually be able to enroll in the plan(s) you choose. This post serves as a primer for people brand new to the process – the blog has a lot more in-depth information. Just search!
For those who opt for Original Medicare coverage, there is an Initial Enrollment Period, or IEP, that lasts for seven full months. This time period starts three months prior to your 65th birthday. It includes the month in which you turn age 65, and it then runs for an additional three months afterwards.
If you are eligible for Medicare Part A (hospitalization coverage), you will be automatically enrolled in this part of Medicare, provided that you are also receiving retirement benefits from either Social Security or the Railroad Retirement Board. Because Medicare Part A is premium-free for most people, it can make sense to have this coverage, even if you also have other health insurance benefits.
With regard to Medicare Part B (doctors’ services), you could choose to delay enrollment if you have health insurance coverage from another source, such as your or your spouse’s employer. This being the case, you can enroll in Medicare Part B during the General Enrollment Period, or GEP – which runs between January 1st and March 31st of each year – or during a Special Enrollment Period (SEP).
Provided that you had viable health insurance coverage prior to that time, you won’t have to pay a penalty. Otherwise, you may be required to pay a higher premium rate for your Medicare Part B coverage going forward. In either case, it makes sense to know what your options are – and what you may be required to pay in terms of premium – before your Medicare enrollment period ends.
If you choose to go with Original Medicare, there can be a number of out-of-pocket charges that you are responsible for. These come primarily in the way of copayments, coinsurance, and / or deductibles. In order to help ease these expenses, you may choose to purchase a Medicare Supplement insurance plan.
Medicare Supplement – also known as Medigap – is designed specifically for paying some, or even all, of the costs that you may be responsible for in conjunction with your Medicare Part A and B coverage.
Should you decide to purchase a Medicare Supplement insurance plan, you will have a six month enrollment period, which starts on the first day of the month in which you are 65 or older and you are also enrolled in Medicare Part B. While you are not required to enroll for a Medigap plan during this time, it could be beneficial for you to do so – particularly if you have various health issues.
This is because you cannot be turned down for Medicare Supplement insurance coverage – or even required to pay a higher amount of premium – if you apply for coverage during this time. If, however, you wait to enroll in Medicare Supplement until after this initial enrollment period, you run the risk of being charged a higher premium rate, or even being denied altogether for the coverage that you choose.
It is a good idea to shop for Medicare Supplement insurance before your initial enrollment period ends. One key reason for this is because Medicare Supplement insurance is sold by private insurance carriers – and, while the benefits that are offered in these plans are required to be the same, the premium that is charged can oftentimes differ, sometimes significantly, from one insurance company to another.
Rather than getting your Medicare coverage through Medicare Part A and Part B, you may instead choose to go with a Medicare Advantage plan. These plans, which are also referred to as Medicare Part C, offer the same coverage as Original Medicare, but they can also include additional benefits, such as vision, hearing, and dental. Many of these Medicare Part C plans will also include prescription drug coverage.
If you are newly eligible for Medicare coverage and you decide to go with a Medicare Advantage plan, you can enroll during a seven-month enrollment period which begins three months before you turn age 65, includes the month of your 65th birthday, and runs for an additional three months after you turn age 65.
As with Medicare Supplement insurance, Medicare Advantage plans are also offered via independent insurance carriers. Therefore, some of the additional benefits that are offered through these plans may differ, as can the premium rate.
Given that, it is important to begin shopping for Medicare Advantage coverage early, so that you know what your options are in terms of coverage, and the amount of premium that you will be required to pay.
The three choices you have – Medicare Advantage, Medicare Supplement with a PDP, or staying on Original Medicare and adding a PDP – are fairly simple to comprehend. The devil is in the details. Hospital and doctor networks vary widely, formularies for your prescription drug coverage can also be very different, and prices are all over the map. Independent agents can be helpful to you in navigating the maze, or you can go it alone on Medicare.gov.