As you near retirement you may start to think about planning for your future. In addition to transitioning from a regular salary to income comprised of your savings, pensions, and investments, your healthcare options will transition from employer-sponsored or private coverage to Medicare.
What is Medicare? Medicare is a federal social health insurance program for people 65 or older, certain people who are under 65 with disabilities, and people of any age with End-Stage Renal Disease (ESRD.)
Medicare coverage is dependent on three things:
- Federal and State Laws
- National Coverage Decisions by Medicare about What is Covered
- Local Coverage Decisions Made by Companies in Each State that Process Medicare Claims
Medicare can be confusing because of the different local and federal laws creating different coverage limitations and gaps. Many people choose to purchase a Medigap policy to help pay for some of the costs Original Medicare doesn’t cover.
Partnering with a licensed, independent insurance professional to help you find the right plan for your needs at an affordable rate can help to keep your costs low and maximize your coverage. This is likely the last major health insurance decision you will make, so it’s important to do it right the first time!
If you’re researching Medicare for the first time, here are the three most important things to know about Medicare.
1. The Four Parts of Medicare
The different parts of Medicare help cover specific services.
Part A (Hospital Insurance)
Medicare Part A helps cover inpatient care in hospitals, hospice care, and home health care.
Part B (Medical Insurance)
Medicare Part B helps cover services from doctors and other healthcare providers, outpatient care, durable medical equipment, and many preventative services like yearly well visits or vaccines.
Part C (Medicare Advantage) or *Medigap: Medicare Supplemental Coverage
Medicare Part C is not part of Original Medicare. It is an alternative to Original Medicare (Part A, Part B, and Part D), and is a Medicare-approved plan from a private company. In most cases, you can only use the doctors who are in the plan’s network.
*Medicare Supplement Insurance (Medigap) is extra insurance you can buy from a private health insurance company to help pay your share of out-of-pocket costs in Original Medicare.
Part D (Prescription Drug Coverage)
Medicare Part D helps cover the cost of prescription drugs. Part D plans are run by private insurance companies that follow rules set by Medicare, and the costs are dependent upon the drugs included in the plan.
People who are on original Medicare may shop for supplemental coverage to help pay out-of-pocket expenses like copayments, coinsurance, and deductibles.
2. Eligibility and Enrollment
Enrolling in Medicare at the right time is important. You can enroll in Medicare during the Initial Enrollment Period which is 90 days before your 65th birthday, the month you turn 65 and 90 days after your birth month. It is VERY important that you do not terminate current coverage until you can confirm your Medicare Part A and Part B effective dates in order to avoid a potential gap in coverage.
Delaying Medicare enrollment has several consequences including a less-than-favorable Medicare effective date and a fine for each 12-month period you failed to enroll in Medicare Part B. That fine will be charged for as long as you have Medicare Part B!
Enrolling is straightforward and can be done online, over the phone, or in person. Each method begins with Social Security. To complete the online enrollment, you can visit https://www.ssa.gov/medicare.
3. Medicare Costs
The most common question about Medicare is what it will cost.
No, Medicare does not cost the same for everyone. You have paid for Medicare during your working career with a Medicare tax. This tax will cover your Medicare Part A premium. Your Part B premium is dependent upon your income, but for most people in 2023 the Medicare Part B premium is around $165. Under Medicare with a Medicare Supplement your total costs will be approximately $285.
Medicare is also beneficial because it is widely accepted and portable throughout the U.S. It’s an affordable option compared to insurance coverage from either an employer or the individual market.
In addition to cost savings, Medicare benefits are typically much more substantial than those you have had during your working years through an employer or the marketplace.
Advanced Benefit Solutions can provide you with various Medicare Supplement options three months in advance of your birth month. You will receive coverage and premium information from up to eight different carriers, and we will be available to answer all your questions and explain every aspect of Medicare, Medicare Supplement coverage, and the differences in the carriers providing coverage.
Enroll in a Medicare Plan That's Right for You
We have a dedicated team specifically set up to answer your Medicare, Medicare Supplement, and Medicare Part D market questions. We at ABS will not only answer your questions, but we can also help you enroll and figure out the lowest cost carriers for Medicare Part D coverage.