As I reached 65, I started looking into Medicare. It seemed everyone I talked to had their own opinion and none of them seemed to agree with each other. My doctor said to choose one plan, friends all recommended their own plan but had little to say about other plans, and most websites seemed to have differing recommendations and advice. I soon learned that most of the folks I talked to had their own bias when it came to Medicare options and recommended only the ones that made them the most money. After listening to different advice, I set my sites to learn Medicare facts not get advice.
I don’t earn a single penny off of Medicare plans and I’m not a licensed insurance salesperson. My only goal is to help you learn Medicare so you can figure out what’s right for YOU, without all the hype and bias.
Let’s start with the basics.
Learn Medicare basics
The Medicare we all think about is actually two parts; Medicare Part A and Medicare Part B. The payroll deduction you made every pay period cover these federally funded programs.
Medicare Part A is hospitalization. It’s free and you should apply up to 3 months before you turn 65. Like most insurance, these plans involve co-pays and some pretty hefty deductables but you can use them at any hospital that takes Medicare. However, they don’t cover outpatient surgery or fees for doctors, etc.
Medicare Part B covers doctors through your payroll deductions. Currently, the cost is $165 (unless you earn around $200K), although there are discounts for folks that don’t have much income. Beware: If you don’t apply for Medicare Part B immediately before you turn 65 or within a short period afterward, you pay a PENALTY EVERY MONTH for as long as you have Medicare. However, if you’re covered under and employer plan (NOT COBRA), you avoid the penalty as long as you fill out the proper form and include verification from your employer that you were covered under their plan.
Depending on the policy offered by your employer, you might still find Part B is better for your situation when you include the cost and co-pays. Do the math to figure out which is best in your situation.
Part B also involves co-payments and deductables but, again, you can use it with any doctor that takes Medicare. Some doctors recommend this and my understanding is that they prefer it because their reimbursements are higher. So, beware of that bias as you learn Medicare basics and make a decision. You can learn more from Medicare.
Medicare beyond the basics: private insurance
But, you will learn Medicare has other parts offered through private insurance companies. There are Parts C, D, E, F, and G and it all gets really confusing. ALL require you enroll in Medicare Parts A and B to apply for coverage.
Part C is a Medicare Advantage plan and there are tons of them out there. A variety of insurance carriers like Aetna, Humana, etc offer these plans. Most are free or involve a small monthly fee. They cover everything in Parts A and B, often with lower deductables and co-pays, as well as prescription drugs. Some offer additional benefits such as coverage for hearing, dental, and vision (although most are pretty poor for these, like $500 max). Some offer other benefits such as gym membership, food, and transportation for medical appointments, and more. Some even offer a small rebate on your Medicare Part B.
Some Part C plans are HMOs which restrict your access to only their doctors and you may find it hard to get treatment coverage when you travel. Others are PPO plans with fewer restrictions.
These policies very WIDELY from location to location, in what’s covered, and co-pays/ deductables. So, learn Medicare options in your area. Also, check to see which plans cover your existing doctors and medications before making a choice. About half of all Medicare enrollees choose this option.
Part D involves prescription drug coverage. If you only have Medicare Parts A and B, you probably want this as drug costs skyrocket.
Medicare Supplement insurance or MediGap insurance (an example is Part G) helps close the loopholes left by Medicare Parts A, B, and D. A host of private insurance companies sell this product and most involve some additional premium. These are meant to fill the gaps left after Medicare Part A and B by reducing out of pocket expenses. If you enroll in one of these programs, you should consider enrolling in Part D, as drugs aren’t covered by these plans.
Learn Medicare nuances
Learn Medicare nuances to help you make the right decision for your situation. Drug coverage involves formularies and each company decides which drugs to cover at higher or lower amounts. Hence, you should enter the drugs you take to determine the benefit.
You can change plans during open enrolllment, normally around the end of each year. If you move or have another qualifying event, you can change your plan if you choose. During the first year, you can make one change if you’re not happy with your decision. After that, insurance companies may refuse to enroll you or charge an extra fee if you have poor health conditions, such as heart disease, cancer, or stroke.
Medigap insurance costs may vary based on your health, gender, age, or smoking status. Medicare Advantage plans don’t during initial enrollment.
If you have a low income or qualify for Medicaid, you may have additional options.
I spent time to learn Medicare from insurance agents, talking to friends, doing comparisions on the Medicare website. What I shared involves my unbiased synthesis of everything I learned rather than an expert opinion. Don’t make any decisions without doing thorough research on your own. Enter your current medications and doctors into a plan to ensure you get coverage without having to switch.
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