As you get closer to Medicare eligibility, you may wonder if it’s worth it to research ahead of time. Many people approach Medicare expecting it will work the same as employer coverage. However, this is not the case as Medicare operates in a specific way with different plan options and coverage guidelines.
So, should you take the time to learn about Medicare? Yes, taking the time to learn about Medicare before the time comes should be a top priority. Otherwise, you risk missing out on crucial information, resulting in higher costs, and having to navigate different enrollment periods.
Medicare Basics
The way Medicare works may be different than what you usually experience. There are four parts to the Medicare program: Part A, Part B, Part C, and Part D. It’s best to understand the parts of Medicare and what they cover to help you prepare.
Medicare Part A
Medicare Part A is coverage for your inpatient hospital needs, including room and board and food while in the hospital. Part A can also cover skilled nursing, nursing home, hospice, and home health care.
Most people qualify for premium-free Part A based on work history. However, you will need to pay a monthly fee if you don’t have enough work history in the U.S.
Medicare Part B
Medicare Part B is coverage for your outpatient hospital care. Outpatient care can include various medical services like doctor’s visits, surgeries, lab work, and more.
Unlike Part A, everyone must pay a monthly premium for Part B, which changes yearly. In 2022 most people will pay $170.10 each month. However, if your income is above a certain level, you will pay an additional charge on top of the standard amount.
Additionally, Part B only pays 80% of Medicare-approved services, leaving you responsible for the remaining 20%. Fortunately, there are supplemental plans, like Medigap plans, you can sign up for to help cover this 20%.
Medicare Part C
Medicare Part C is another name for the Medicare Advantage plan program. An Advantage plan is a different way to receive your Part A and Part B benefits through a private insurance company rather than the federal government.
Typically, Advantage plans have low monthly premiums and higher out-of-pocket costs, but each plan is different in its specific pricing.
Medicare Part D
Medicare Part D is coverage for your retail prescription medications. Like Advantage plans, private insurance companies are the ones who manage Part D plans. In other words, each plan will have a different monthly premium and cover different medications.
So, if you take medications, you must research and choose a plan that covers your needs.
Late Enrollment Penalties
Something else to keep in mind is there are financial penalties if you don’t enroll in Medicare at the right time. These penalties are permanent for as long as you have Medicare insurance. So, you should know when and how to enroll.
For example, most people should sign up during their Initial Enrollment Period (IEP). Your IEP is a 7-month-long window for you to enroll in Part A and Part B through Social Security. It begins three months before your 65th birthday month and ends three months after. If you miss this period, you risk being charged a penalty and waiting for a different enrollment period.
However, other enrollment periods may apply to you instead. For example, if you have creditable employer coverage for Medicare and plan to work past 65, you will have a different enrollment period.
Medicare Plan Options
There is no one-size-fits-all when it comes to Medicare plans, as there are many options. When you sign up for Medicare, you have two main choices. First, you can sign up for a Medigap and a Part D plan. However, there are ten Medigap plans to choose from, and they all provide different levels of coverage for different monthly premiums. The same is true for Part D plans, as each plan differs in the medications it covers and for how much.
The second option is to joinan Advantage plan. People sometimes refer to them as all-in-one plans, which often include built-in Part D coverage. Additionally, they have lower monthly premiums. However, Advantage plans can be tricky. For example, they can change their benefits each year. Also, it can be difficult if you have an Advantage plan and want to switch to a Medigap plan later.
Final Thoughts
The bottom line is that there are many factors to consider before enrolling in Medicare and choosing your plans. It would help if you took the time to research each option and think about which route is best for you and your needs. If you don’t, you may end up paying more than necessary and not having the healthcare coverage you need.
