Medicare is health insurance for Americans 65 and older, those younger than 65 with certain disabilities, and people of any age with End Stage Renal Disease (ESRD). The federal government administers Medicare, and you apply for it through the Social Security Administration (SSA). There are several types of Medicare coverage.
- Original Medicare, or Parts A and B, cover inpatient care (Part A) and outpatient services (Part B).
- A Medicare Advantage plan, called Part C, is sponsored by a private company. Medicare Advantage plans sometimes offer additional services not covered under Original Medicare. Some Medicare Advantage plans also provide prescription drug coverage. You must have enrolled in Parts A and B to enroll in Part C.
- Medicare prescription drug coverage is called Part D. Like Part C, Part D is provided by private companies.
- Medigap plans are forms of supplemental insurance that pay for costs not covered by Original Medicare. If you have a Medicare Advantage plan, you cannot also have a Medigap plan.
The advantage plans or Part C, and Part D are likely to become more important than ever. With the baby boomers retiring in massive amounts the Medicare System will be stretched very thin. This will cause two things, 1) an increase in taxes and premiums to pay for the coverage, and 2) a continued reduction of benefits paid for by Medicare.
There are different time periods during which you can enroll in Medicare. For many people, the Initial Enrollment Period - a seven-month period around your 65th birthday - is common. There are also Special Enrollment Periods for people who are retiring and losing employer health coverage, or whose spouse who carried coverage is retiring.
You will want to learn about the different times you can enroll, and which time applies best to your situation. If you don’t enroll on time, you could be without coverage for up to four months and you may have to pay a penalty that lasts as long as you have Medicare!
Timing is also important if you decide to purchase supplemental insurance. You should sign up for supplemental insurance within six months of when you sign up for Part B. If you wait too long, the insurance company can deny you coverage, or charge you higher premiums for pre-existing conditions and impose a waiting period before your coverage starts.
Many people continue to work past age 65, and have health coverage through their employers. Others may be retired, and have insurance through the military (VA or TRICARE benefits) or employee unions. There are different rules depending on whether you are “actively employed” or retired.
Be sure to contact the benefits administrator of your current plan to ask about how it works with Medicare, and if and when you need to sign up for Medicare. You may also want to call the Social Security Administration to make sure that your employer’s advice is consistent with SSA policies.
It is recommended that you seek advice well in advance of signing up for Medicare. Find a trusted insurance source that is well trained in the ins and outs of Medicare. Do your own research as well. Knowing when to sign up and what to sign up for can save you headaches and hassles down the road!
One headache is finding the right doctor, prior to signing up you will want to find out if your current doctor accepts Medicare. If not you will have to go Medicare doctor hunting, which is about the same thing as hunting elephants in Alaska! Fewer and fewer doctors are accepting Medicare – I was visiting with one Doctor who had to stop because his office overhead (staff, rent, utilities, supplies, etc.) was higher than what he was being reimbursed by the government. What has been your experience with Medicare? Good? Bad? Or indifferent?