Medicare, the federal insurance program for individuals 65 or older, insures over 44 million individuals across the country. At Better Health Advisors, we frequently receive Medicare related questions from retirees and family offices. In response, we have put together a guide to take the confusion out of the enrollment process and ensure that you have the best coverage for your specific health and wellness needs. Here is what you should know:
There are four parts of Medicare:
- Part A: Hospital Insurance (inpatient care)
- Part B: Medical Insurance (outpatient care)
- Part C: Medicare Advantage (combines coverage of Part A, Part B and sometimes a prescription drug plan and other additional benefits)
- Part D: Prescription Drug Plan (prescription drug coverage also available through a Medicare Advantage Plan)
Part A and Part B are collectively referred to as “Original Medicare.”
In addition to Part A, Part B, and Part D, many individuals also purchase a Medigap (supplemental) Policy to pay for some of the costs not paid for by Original Medicare.
You will automatically be enrolled in Part A and Part B when you turn 65 if you receive Social Security or Railroad Retirement Board benefits. If you do not receive those benefits, you can sign up for Medicare through the Social Security Administration.
If you don’t collect Social Security when you turn 65 and are still working and have insurance coverage, you can wait to enroll in Medicare until after you stop working and are no longer covered by your employer-based insurance policy. However, we suggest you enroll in Medicare Part A as soon as possible, regardless of whether you already have coverage (except if you are using a Health Savings Account). For most people, it won't cost anything. If you do not have other coverage, you should enroll in Part B prior to the month of your 65th birthday.
There is a seven month window for the Initial Enrollment Period. It begins 3 months before the month of your 65th birthday and extends 3 months after the month of your 65th birthday. If you miss this window, you may be subject to late fees.
* Adapted from https://www.medicare.gov/sites/default/files/2018-07/02110-medicare-medigap.guide_.pdf
MEDICARE TIPS AND FAQ:
- You can make changes during open enrollment. If you already have Medicare and are unhappy with your plans, you can make changes to your coverage each year during Medicare Open Enrollment, which is October 15th to December 7th.
- Do not auto-enroll in your plan. You should shop around for Part D plans each year. Private insurance companies offer a range of options which change year to year, so the best plan in one year is not necessarily the best plan the next year.
- Part F is one of the most comprehensive Medigap plans. It is one of only two plans that cover the Part B deductible. However, new enrollees may not be eligible for this plan as of 2020.
- You cannot have a Medigap policy and a Medicare Advantage Plan (Part C). As of 2019, there are 10 options for Medigap policies.
- Medicare Advantage has an annual out of pocket limit. This is not the case with Original Medicare. However, if you have Original Medicare, a Medigap policy can cover many of the out of pocket costs.
- Medicare Advantage has drawbacks. Compared to Original Medicare, Medicare Advantage has a smaller network of doctors, and typically requires you to get referrals for specialists.
- You can appeal high premiums. If you have had a decrease in income due to retirement, divorce, death of a spouse or other life events, you can appeal the high income surcharge.
For more information about Medicare and for help enrolling, contact Better Health Advisors.