Table of Contents:
- When Am I Eligible?
- What Are My Options for Coverage?
- How Do I Enroll?
- What If I’m Still Working?
- How Much Can I Afford to Pay Each Month, or in the Event of a Medical Emergency?
- What Are My Healthcare Needs?
- Will My Preferred Providers Accept My Plan?
- Where Can I Find Additional Information?
You’ve heard of Medicare, but how well do you understand it? As you approach eligibility, it’s crucial to make sure you understand the plans available to you, the coverage they provide, and the costs you may incur.
When Am I Eligible?
Seniors are first eligible for Medicare three months before the month they turn 65. Day 1 of this month opens an enrollment window that remains open until three months after the month they turn 65. For example, someone who turned 65 on July 30 would be eligible to enroll from April 1st to October 31st.
- Americans who receive disability benefits from the Social Security Administration or the Railroad Retirement Board qualify after 24 months of benefits.
- Americans with end-stage renal disease (ESRD) qualify after three months of dialysis treatments or one month of at-home dialysis.
- Americans with amyotrophic lateral sclerosis (ALS) qualify as soon as they begin collecting disability benefits.
What Are My Options for Coverage?
Medicare is not just one health insurance plan. Beneficiaries meet their healthcare needs through a combination of the following Medicare programs:
- Original Medicare: Since 1965, Medicare has included the same two primary components.
- Medicare Part A (Hospital Insurance): Medicare Part A covers a variety of in-patient services including hospital visits and home health services.
- Medicare Part B (Medical Insurance): Medicare Part B covers other medically-necessary services and procedures like x-rays and blood transfusions.
Original Medicare does not cover a number of essential healthcare services (including those related to routine dental, vision, and hearing care) or the cost of prescription drugs. Most beneficiaries choose to fill in these gaps with additional coverage through one or more of the following supplementary programs:
- Medicare Advantage: Part C is an alternative to Original Medicare that enables beneficiaries to receive additional healthcare benefits from private insurance providers. In 2020, Americans have the option to enroll in more than 3,100 different Medicare Advantage plans. Providers offer six different types of plans:
- Health Maintenance Organization (HMO) Plans
- Preferred Provider Organization (PPO) Plans
- Private Fee-for-Service (PFFS) Plans
- Special Needs Plans (SNPs)
- HMO Point of Service (HMOPOS) Plans
- Medicare Medical Savings Account (MSA) Plans
Provider network size, drug availability, and costs will vary based on the provider and type of plan. According to the Kaiser Family Foundation, 90% of all Medicare Advantage plans offer prescription drug coverage in 2021.
- Medicare (Part D): Original Medicare beneficiaries and the few Medicare Advantage beneficiaries who do not already have coverage can choose a Part D plan to cover their prescription drug costs. Like Medicare Advantage plans, these plans (often called Prescription Drug Plans or PDP) are provided by private insurance companies.
- Medigap: Private insurers provide Medigap plans to beneficiaries who want help covering their out-of-pocket Original Medicare costs. Across the country, Original Medicare beneficiaries can choose one of eight standardized Medigap policies. Not all eight are available in every county. A Medicare-eligible individual has access to a six-month Medigap Open Enrollment Period on Day 1 of the first month that the individual is both 65 years old and enrolled in Medicare Part B. During this period, they have access to any Medigap policy available in their state regardless of any pre-existing conditions. This is the only guaranteed issue period that is open to all beneficiaries interested in Medigap. Otherwise, both plan availability and enrollment periods will vary based on location. Medigap plans do not cover the cost of prescription drugs and they are only available to individuals.
Keep in mind that Medicare Advantage and Medigap availability varies across the country. Use Medicare Plan Finder to learn more about options in your county.
How Do I Enroll?
Those who are already collecting Social Security benefits are automatically enrolled in Medicare when they become eligible. Three months before turning 65, seniors will receive a “Welcome to Medicare” packet in the mail. This will provide deadlines, paperwork, and other important information on opting out of Part B and/or selecting supplemental benefits. They will also receive a Medicare identification card.
Americans with ALS are automatically enrolled in Original Medicare once they start collecting disability benefits. Those who qualify for Medicare because of other disabilities are automatically enrolled after collecting benefits for 24 months. Both groups have the option to opt out of Part B and will receive their Medicare identification card in the mail upon enrollment.
Those who are not already receiving Social Security benefits will need to enroll online or call the Social Security Administration to enroll.
What If I’m Still Working?
While most seniors enroll in both parts of Original Medicare when they first become eligible, they are not required to do so. Many seniors opt out of one or both parts because they are already covered by their employer or their spouse’s employer. Depending on the size of their organization, these seniors may avoid late enrollment penalties later on.
Seniors who have paid Medicare taxes (or whose spouse has paid Medicare taxes) for ten or more years are eligible for premium-free Part A coverage. Anyone who does not qualify must buy into Part B to receive Part A coverage, even if they are currently employed.
How Much Can I Afford to Pay Each Month, or in the Event of a Medical Emergency?
No, Medicare isn’t free. In addition to monthly premiums, Original Medicare and most Medicare Advantage plans present beneficiaries with a number of out-of-pocket expenses. Some of these — like drug costs or copays for doctors visits — are fairly predictable. Other costs might depend on unexpected events like lengthy hospital stays or certain procedures. It’s important to compare your income against your regular healthcare expenses while also considering which deductibles you could meet in an emergency.
What Are My Healthcare Needs?
- How often do I typically go to the doctor each year?
- How many prescriptions do I take?
- Do I have any pre-existing conditions that require regular treatment or might in the near future?
It’s also important to think about which benefits you definitely won’t need. Medicare Advantage plans, for example, occasionally offer fitness or transportation benefits. If you know you won’t take advantage of these perks, you can eliminate certain plans from your search.
Will My Preferred Providers Accept My Plan?
The vast majority of doctors, hospitals, and other healthcare providers accept Original Medicare. As mentioned above, coverage is far different for Medicare Advantage beneficiaries. Medigap SELECT beneficiaries are also required to stay within a specific network of providers.
Where Can I Find Additional Information?
There are a number of resources available to beneficiaries while they assess their options:
- Call Marigold to speak to one of IHC Specialty Benefits’ licensed insurance agents to review plans in your area
- Use the Medicare Plan Finder to see which plans are available in your area
- For additional information on PDPs, log in to the Medicare Drug Plan Enrollment Center
Information adapted from the Centers for Medicare & Medicaid Services
Additional data and cost information adapted from the Kaiser Family Foundation
Medicare Advantage 2021 Spotlight: First Look, 2020. Kaiser Family Foundation