Medicare and You – Things You Need To Know If You’re Turning 65

If you are turning age 65 soon, there are several things you should know about Medicare. You need to know if and when you should apply for Medicare and what your options are when you sign up for Medicare. You can find more information on the Medicare website at www.medicare.gov.   

When to sign up for Medicare coverage:

The initial enrollment period for all Medicare plans is the seven calendar month period starting three months before the month you turn 65.  If you sign up during the first three months of the enrollment period, Medicare will be effective on the first day of the month you turn 65.  If you enroll during the last four months, Medicare Part B will be effective one to three months following the month of enrollment.  There is a late enrollment penalty if you do not enroll in Medicare during the enrollment period.  This penalty is in the form of additional premium when you do enroll.

If you are age 65 and are covered under a group health plan from your or your spouse’s current employment, you may enroll in Medicare Part B at any time while covered.  You may also defer enrolling in Medicare Part B without paying a penalty.  If you defer enrolling, you have eight months after the earlier of the month employment ends or the group health coverage ends to enroll in Medicare Part B.  COBRA and retiree health coverage do not count as current employer coverage.

**You may switch plans each subsequent year from October 15 to December 7. 

Types of Medicare Plans:

Original: 

Original Medicare is comprised of Part A and Part B.  Medicare Part A is hospital insurance and covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.  There are no premiums for Part A.  Medicare Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.  Premiums for Part B are due monthly and vary according to your income and when you sign up for Medicare.  If you are receiving Social Security benefits, you will automatically get Part A and Part B starting the first day of the month you turn 65 and premiums will be deducted from your benefit payments.  If you are not already receiving Social Security benefits, you need to sign up for Part A and Part B during the enrollment period.  You may sign up online at www.medicare.gov or at the local Social Security Administration office.  You will be billed for the Part B premiums. 

Part D: 

Medicare Part D is prescription drug coverage.  Parts A and B do not cover prescription drugs.  If you want prescription drug coverage, you can enroll in Medicare Part D online at www.medicare.gov. This website can give you the plans available to you in your geographical area and the premium costs of the various plans if you enter the prescriptions you are currently taking.  The premiums vary among different companies depending on your prescriptions. 

Advantage Plan (Part C):

A Medicare Advantage Plan, also known as Medicare Part C, is a plan that includes both Part A and Part B.  It may also include Part D if you want to and may include other benefits.  This is like an HMO or PPO.  Private insurance companies approved by Medicare provide the coverage.   In most plans, you need to use plan doctors, hospitals and other providers or you pay more or all of the costs.  You cannot have a Medigap policy if you are enrolled in a Medicare Advantage Plan and you may be limited in your ability to switch from a Medicare Advantage Plan to other plans.

Supplement Insurance (Medigap) policies:

You must be enrolled in Medicare Part A and Part B.  Medigap policies are sold by private companies and help pay for costs not covered by Original Medicare, such as co-payments and deductibles.  It may cover other services not covered by Original Medicare, such as medical care when you travel outside the US.  You must pay the private insurance a monthly premium in addition to the Part B premium.  A Medigap policy only covers one person so both you and your spouse need your own separate plan.  Some companies may offer a discount on premiums if both spouses have policies through their company.  Medigap policies do not cover long-term care, vision or dental care, hearing aids, eyeglasses or private-duty nursing.  There are many types of Medigap plans and you will need to compare coverages and out of pocket costs before you enroll in one.

It may be helpful to enlist the aid of a professional or an investment counselor to help you determine the best fit for your particular situation. LBA Haynes Strand can help – set up your no-cost consultation.