Turning 65 means you are now eligible for Medicare. Due to the amount of misinformation and confusing choices, figuring out Medicare can be a daunting task, but it doesn’t need to be. We have done our best to make a simple Medicare guide to help navigate this major change in your healthcare life.
What is Medicare?
Original Medicare is our country’s health insurance program for people aged 65 or older. The program helps with the cost of health care, but it does not cover all medical expenses.
Original Medicare is broken into two parts: Medicare Part A (Hospital Coverage) and Medicare Part B (General Medical).
Part A Covers:
- Some hospital care (after deductible)
- Some skilled nursing facility care (after deductible)
- Some nursing home care (as long as custodial care isn’t the only care you need)
- Some hospice (after deductible)
- Some home health services (after deductible)
Part B Covers:
- 80% of most doctor visits (after deductible)
- Ambulance services (after deductible)
- Some Mental health -inpatient and outpatient (after deductible)
- Some durable medical equipment (after deductible)
- Clinical research
- Very Limited outpatient prescription drugs (after deductible)
- Second opinions before surgery (after deductible)
How much does Medicare Cost?
Part A Cost: For 2014, Medicare Part A’s monthly premium can be as high as $426, however if you qualify for Social Security you do not pay for this premium. There is an additional Part A deductible of $1,216 that you must pay for hospital services for each 60 day benefit period. If you have Medicare Supplement coverage this may be covered (explained below).
Part B Cost:The 2014 part B premium is $104.90 per month, and most seniors pay for this. Additionally seniors are subject to a Part B deductible of $147, and 20% of all approved doctor costs. Medicare Supplemental insurance may also cover your Part B deductible and coinsurance (explained below).
When Should I sign up for Medicare?
There is a seven month window to sign up for Original Medicare. This initial enrollment period is the three months before your birth month, the month you turn 65, and the three months after. If you miss this window you can sign up during the General Enrollment Period between January 1–March 31 each year, but you may have to pay a penalty.
We recommend signing up for Part A during the initial enrollment outlined above.
If you have coverage by an employer, union, TRICARE, are an active military member, or qualify for VA benefits you may want to hold off on signing up for Part B, if you current benefits are better/less expensive. Call us if you need help with this.
How do I sign up for Medicare?
If you’re receiving social security benefits, you may be automatically enrolled in Part A and Part B. If not, you can do it online. To sign up for Medicare today or to learn more, visit our Medicare Overview page.
With Part A and B am I totally covered? (Hint: The Answer is No)
Original Medicare was designed as a safety net so that all seniors would have a minimum level of coverage after retirement, but it leaves major coverage gaps. Original Medicare does not cover deductibles, excess fees, most prescription drug coverage, and extended hospitalization. For extended hospitalization, you could end up paying your deductible, eventually $608 per day in coinsurance and even the full hospital daily rate depending on the length of stay.
Additionally, with no drug coverage, Original Medicare leaves you at risk for major out of pocket costs should you be on an expensive prescription drug regimen.
Consider Medicare Insurance:
To address the above you should consider ONE of the following (you can’t select both)
1) Medicare Advantage (MA)
Medicare Advantage, AKA Medicare Part C, requires private companies to REPLACE Original Medicare. MA plans must cover at minimum the same benefits, but many plans cover additional costs such as prescription drugs, dental or some deductibles. Medicare Advantage plans work like a PPO or HMO, by creating a smaller network. It is less comprehensive and usually less expensive than Medicare Supplemental explained below. Click here for a Medicare Advantage overview.
2) Medicare Supplemental (Medigap)
Medicare Supplement Plan, AKA Medigap, fills in the medical and hospitalization gaps left open by Original Medicare. It works IN ADDITION to Original Medicare. Depending on which Medigap plan you select, it could cover all your deductibles, hospital coinsurance, an additional 365 hospital coverage, foreign travel emergencies, blood transfusions, and Part B excess charges. Here is a good Medigap overview.
Consider a Prescription Drug Plan (PDP)
If you choose to go with the Medigap and Original Medicare combo or just Original Medicare drug coverage is not included, as well as some Medicare Advantage don’t include drug coverage, you’ll most likely want to enroll in a separate PDP plan. PDPs, aka Medicare Part D, help cover the mounting cost of drugs. Click here for a Medicare Part D Overview.
Everyone should first enroll in Medicare Part A & Part B (you may not be able sign up for additional Medicare products without them). If you can afford it, then go with a Medigap plan and PDP plan. If not, consider a Medicare Advantage plan with Rx. For further questions about Medicare, Medigap, or PDPs call 800-930-7956 or contact Senior65.