Are you about to turn 65?
If so, then you probably have Medicare on your mind. And if you don’t, well — you should!
First and foremost, you should know you will NOT be automatically enrolled in Medicare on your 65th birthday. Unless you have already been collecting Social Security benefits, you will have to initiate the enrollment process yourself.
So, what is involved?
Understanding Medicare can be overwhelming, so here are some tips:
Key Medicare Terms
|Medicare Part A is hospital insurance. It covers inpatient hospital care, skilled nursing facility or nursing home care, hospice, and home health services. There is no premium for Part A coverage if you or your spouse has earned at least 40 Social Security work credits.|
|Medicare Part B is medical insurance. It covers preventive care, doctor’s visits, and outpatient services.|
|Part D is prescription drug insurance. Part D plans are private insurance plans covering prescription medications.|
|Part C – Medicare Advantage is a program in which private insurance plans are paid by the federal government to provide coverage that is equivalent to Medicare. It is a substitute for original Medicare.|
|Medigap plans are private plans used to supplement traditional Medicare and help pay out-of-pocket expenses and other things not covered by Medicare. Medigap is optional but strongly recommended.|
When to Enroll in Medicare
Your initial enrollment period for Medicare will run from the three months before your 65th birthday to the three months after it.
You should enroll in Medicare during that time. Don’t put it off, or you will be penalized (unless, that is, you have health insurance through your job or your spouse’s job.)
It is really important to enroll as soon as you’re first eligible — during your initial enrollment period or when your job-based coverage ends — because the penalty you will pay actually raises your premiums for Part B and Part D for the rest of your life. For each year you delay signing up for Part B, your monthly premium goes up by 10%. And, even missing the deadline by one month is considered one year! Not enrolling on time in Part D results in a 1% penalty for every month you delay. Yikes!
If you are entitled to free Part A coverage, you may want to enroll as soon as you’re eligible. Note if you are making contributions to a Health Savings Account (HSA), you may want to delay enrollment in A. Please check in with us for guidance specific to your situation. If you don’t qualify for free Part A, it is best to defer enrollment until you have stopped working.
Understand Your Current Insurance
Make sure you understand if and when your current insurance coverage ends. Some retiree plans and employer sponsored coverage ends at age 65. You don’t want to be caught with an unexpected gap in coverage!
COBRA and Medicare
If you are on COBRA, you must enroll in Medicare when you turn 65.
If your COBRA ends after your initial Medicare enrollment period, and you enroll then, you will be penalized for late enrollment in Medicare Part B. It’s best to check in with us as you are nearing retirement to make sure you meet all important deadlines!
When you enroll in Medicare, your COBRA usually ends. But you may be able to keep COBRA for certain services which are not covered by Medicare (e.g. COBRA dental coverage).
Medicare Open Enrollment
Each year in the fall — October 15 through December 7 — there is an Open Enrollment period during which you can switch plans.
This can be a little tricky because it’s not so easy to switch ALL types of Medicare plans.
You can switch Medicare Advantage and Part D plans each year.
However, switching from one Medigap plan to another often requires a health evaluation. And you can be rejected for new Medigap coverage or face a rate increase based on any health issues you may have developed.
For this reason, when choosing supplemental Medigap coverage, we suggest you always get the most comprehensive coverage you can afford when you initially enroll.
Understand All Costs
Choosing the Medicare plan with the lowest premium does not always mean it is the most affordable option. You need to consider co-payments, deductibles, etc. when figuring the actual cost of any plan you’re considering.
For More Information
At Virginia Medical Plans we strongly recommend supplemental Medicare coverage, and we are able to help you find the right plan. Contact us by phone 703-707-8270 or email email@example.com to learn more.
Also, here are a couple of great resources that provide useful, more-detailed information:
Medicare website: http://www.medicare.gov/
Consumer Reports: http://www.consumerreports.org/cro/2012/09/managing-medicare/index.htm