How Medicare Works
In 2011, approximately 78 million baby boomers were reaching the 65-year mark on January 1. Now there are about 10,000 individuals each day who are reaching the same milestone and will do so by 2030.
So, if you're about to turn 65, then it's time to think about Medicare.
You will become eligible for Medicare by age 65, and a delay in your enrollment may incur penalties, so please act promptly.
There are several distinct options available when enrolling in Medicare, and you can see this by the four major insurance programs:
- Medicare Part A - encompasses hospital stays
- Medicare Part B - will cover medical fees
- Medicare Part C - allows Medicare beneficiaries access to medical care from a variety of medical providers
- Medicare Part D - will cover prescription drugs
Medigap insurance policies provide supplementary coverage for individuals who entered Parts A and B.
When is Medicare Enrollment?
Enrollment in Medicare begins three months before your 65th birthday and runs for up to seven months after. You do not have to do anything if you receive Social Security benefits.
You will automatically become enrolled in Medicare Parts A and B, starting from the month of your 65th birthday.
If you aren't receiving Social Security benefits, they will require you to enroll in Medicare by calling the Social Security Administration at 800-772-1213 or online http://www.socialsecurity.gov/medicareonly/.
It would help if you started as soon as possible so your coverage can begin once you turn 65.
However, suppose you are working and have health insurance coverage from your employer or union group. In that case, you may not need to enroll in Medicare Part B right away. Check from your employer if the employer's plan is your primary insurer.
If Medicare is the primary insurer, instead of your employer's plan, you still have to enroll in Part B.
Even if you are not joining Part B, enroll in Medicare Part A, which may help pay some costs that are not covered under your group health plan.
Suppose you have no employer or union health insurance plan, or this plan is second to Medicare. In that case, it is vital to enroll in Medicare Part B during the initial enrollment period.
Please note that coverage under COBRA will not count as a medical insurance plan for Medicare's purposes.
Neither does coverage for retired persons or VA benefits because you have some health insurance; it does not mean that you don't have to enroll in Medicare Part B.
Your employer insurance must be where you work actively, and still, should the employer have less than 20 employees, you will probably still have to enroll in Part B.
Confused? We can help!
Call us today and we'll help you find the plan that fits your life and your needs.
Failure to enroll in Part B immediately may cause a penalty.
Your premium for Medicare Part B may increase by 10% for each 12-month period that you might have had Medicare Part B but have not taken it.
You have to wait for the General Enrollment period before applying. The General Enrollment Period usually runs from January 1 to March 31 of each year.
With all the deductibles, co-payments, and coverage exclusions, you will find that Medicare will only pay around one-half of your medical costs.
Most of the balance is not under Medicare can be insured by purchasing a policy called "Medigap" from private insurance companies.
Medicare offers Medicare Part C (also known as Medicare Advantage). You have to enroll in Medicare Part A and B to enroll in a Medicare Advantage plan, the name given for private health plans operating under the Medicare program.
Subscribing to a Medicare Advantage Plan provides you with all of your Part A and Part B coverage. It can offer additional benefits such as vision, hearing, dental, health, and wellness programs.
Most of these plans include Medicare prescription drug coverage. Last, Medicare provides prescription drug coverage under Medicare Part D.
If you will not enroll in a Medicare Advantage plan with prescription drug coverage, you will then want to enroll in a prescription drug plan at the same time as you enroll in Parts A and B.
For each month you delay enrollment beyond the initial enrollment period, your Medicare Part D premium increases by a minimum of 1 percent.
It exempts you from such penalties if you have not enrolled because you had coverage for medicines from a private insurance company, like through a retirement plan which works as well as Medicare. They refer to this as "credible coverage."
Your insurance company should inform you whether their coverage will be considered credible.