Haven’t gotten this Medicare thing figured out yet? You’re in the right place.
If your experience with Medicare is anything like what my mom went through, chances are the mail is starting to pile up and you have no clue where to start.
Does it seem as if the insurance companies are trying to make you more confused, rather than less confused?
To get you on track, I’m covering the MOST important, need-to-know facts about how to enroll in Medicare and find yourself a plan.
You’ll find out:
- What is Medicare?
- When do you sign up?
- How do you sign up?
- Mistakes to avoid.
- Should you supplement your Medicare?
- Should you consider a Medicare Advantage Plan?
- How to find the right plan for you.
- How to handle your drug plan.
Let’s dig in.
The Parts and Costs of Medicare
Medicare consists of Part A (hospital coverage), Part B (office visits, tests, etc.) and Part D (prescription drugs).
Part C is “Medicare Advantage,” which is covered in a bit.
Most people get Part A at no cost.
The standard Part B premium is $121.80 in 2016.
Part D (drug) premiums vary, depending on the plan and which insurance company you choose.
Double check your eligibility and premium amounts with the Eligibility Check & Premium Calculator.
When do I sign up?
Did you know that the age of eligibility for Medicare is 65, and has nothing to do with when you choose to retire?
You may sign up EVEN if you are working and have health insurance through your employer.
If you have health insurance through work, compare your group coverage to medicare. Medicare will probably be better, and cost less.
You may sign up starting three months before your birthday month.
(I recommend this! Get it DONE and check it off your list).
The deadline to sign up is the third month past your birthday month.
Example – your birthday is in May. You can sign up starting the first day of February. The deadline is the end of August.
Let’s just say for now that missing the deadline can create a multitude of problems, and unless you have a strong reason not to enroll, don’t miss your deadline!
If you are planning to delay enrolling in Medicare Part B for any reason, get some professional advice about what will happen if you don’t.
How do I sign up?
If you are already receiving Social Security, enrollment is automatic. It doesn’t get any easier than that.
You will be sent your Medicare Card three months before your 65th birthday.
You can opt out of Part B at this time but I don’t recommend this.
Not receiving Social Security yet?
These days, more and more people are working past age 65, and delaying Social Security.
In that case, you will NOT be enrolled automatically, and must apply.
Not only should you take advantage of your eligibility right away, if you delay, it could hurt you in the long run.
You should apply three months before your birthday month.
The easiest way to apply is to go the the Social Security website and apply online.
Go to SocialSecurity.gov/medicare and scroll down to the button that says “Apply for Medicare Only.”
Here’s a screen shot:
AVOID THIS MISTAKE!!
One of the biggest mistakes you can make is keep your Marketplace plan (Obamacare) when you turn 65. (Skip this section if this doesn’t apply to you)
You are allowed to keep a Marketplace plan once you turn 65, but as soon as your Medicare starts, you’ll lose all your tax credits.
I received a call from a woman in this very situation.
She didn’t realize she was supposed to cancel her Marketplace plan and enroll in Medicare. By the time she called me she was already beyond the Medicare enrollment deadline. She had to wait months to apply to Medicare, and due to the late enrollment, experienced an additional delayed effective date.
You need to be especially careful if you retire before age 65 and enroll in a Marketplace plan. The reason is that your Medicare Part A will begin automatically if you are receiving Social Security.
Once your Medicare Part A (and/or Part B) begins, you lose all subsidies to your Marketplace plan.
You’ve signed up – Now what?
So you’ve signed up on time and you have your Medicare card a few months before the effective date.
You might be wondering, do I need a supplement?
Do I need a drug plan?
Yes, and YES.
Why get a Supplement?
The most important reason to supplement your Original Medicare is that Medicare offers NO out of pocket maximum limit on spending.
People are usually in one camp or the other when it comes to these two very different plan types.
It’s important to note that Medicare Advantage plans are NOT Medicare Supplements.
Understanding the difference between the two may be the single most important step you can take on your Medicare journey.
The difference between Medicare Supplements and Medicare Advantage
I cover this topic in-depth in my post How to Compare the Two Most Common Medicare Plans
What is Medigap?
Medicare Supplements are also called Medigap Plans.
Rather than replace your Original Medicare Like Medicare Advantage plans do, Medigap plans are a gap plan that you “add-on” to your Original Medicare.
When you go to the doctor, you hand them your Medicare card and your Medigap card.
Medicare Supplements, or Medigap plans will cost you a monthly premium, and give you the freedom to go to any doctor or hospital that accepts Medicare.
That is the biggest selling point – total freedom.
The big warning in regards to Medigap is that you only have a narrow window of 6 months for a guaranteed enrollment. Beyond 6 months you would have to answer medical questions when you apply, and could be denied.
There’s a chance you may never qualify again.
If you really value freedom to choose doctors, and predictable out of pocket costs, this is the plan for you.
Medicare Advantage – There’s lovers and haters.
Medicare Advantage Plans are administered through private insurance and paid for by Medicare.
So while you’re still a beneficiary of Medicare, when you enroll in a Medicare Advantage Plan, you are signing a contract allowing a private company to administer your Medicare benefits.
You must play by their rules in exchange for your low premiums and sometimes extra benefits such as dental and vision.
Despite giving up some freedom, the low monthly premiums win over many seniors.
But I still have very mixed feelings about Medicare Advantage plans.
I rarely, if ever recommend them and if I do, it depends where you’re located and what your mindset is.
I began my career in San Diego where there’s at least 50% enrollment in Medicare Advantage plans among seniors. Some carriers there are thriving in that market – providing stability in premiums and copays year after year, with plans that offer sought after provider networks such as Scripps, UCSD, Sharp, and Kaiser.
When I moved to Tampa, Florida, I began to see the greater value of Medicare Supplements (Medigap) plans. I became so concerned about the instability of Medicare Advantage plans that I switched my mom to a Medigap plan before it was too late.
(Remember – not enrolling in a Medicare Supplement (Medigap) plan when you’re first eligible could disqualify you later based on health).
I get feedback from clients in my county that the provider choices are slim on Medicare Advantage. I have seen first hand, drastic changes within plan benefits and networks from one year to the next.
Since I moved to Florida, at least Two Medicare Advantage providers have either gone bankrupt or been forced to stop selling the plans, leaving seniors scrambling to find a new plan.
So what’s my advice to you?
Get REALLY clear within yourself: know what’s important to you in the long term.
If you are considering Medicare Advantage, make sure you talk to an agent that is familiar with your local Medicare Advantage Market.
Your agent should know:
- What plans are accepted by what providers
- What are the limitations of the local plans
- Which local carriers are the most stable
Get an agent that offers many options and is willing to listen to your needs. I advise against working with a captive agent (can only sell plans from one company).
How do I find a plan?
Once you decide on the plan type for you, the next step is to narrow it down.
Find a Medigap Plan
Medicare’s 2015 Choosing A Medigap Policy outlines the Medigap plans on page 11.
The hard part is getting pricing. Most websites won’t let you just run a quote without putting in your personal information.
Some State Department of Insurance websites offer pricing.
Insurance leads are big business, so you should be careful when searching online and entering information to get a quote (especially phone number). This information is often sold online to many agents and you will get bombarded with calls.
I recommend either directly calling or emailing an online agent that you trust (i.e. someone that you have gotten to know through social media, online videos, articles, etc. and they offer testimonials from clients) – or finding a local agent to call.
You should be able to get an immediate quote through email or over the phone.
Another option is to directly call a few different carriers to get a quote. Be aware that the big names aren’t always the best value, so it pays to shop around.
The most popular plans are F, G, and N. Plan F is going to be obsolete in a few years, so I’d start by looking at G and N.
Find a Medicare Advantage Plan
I wrote a post about how to find the best Medicare Advantage plan anywhere in the country for do-it-yourselfers.
In the article I talked about the Medicare plan finder on Medicare.gov. It is extremely useful and you can find the best plan for you in your zip code.
Make sure you enter your list of medications. The results can change drastically, depending on your medications.
You can search for, and enroll in, a Medicare Advantage plan right on the Medicare site.
If you are good at researching online, and trust your own judgment and understanding of these plans, finding a plan and enrolling yourself might work for you.
You must get verification that your providers are in-network. Once you find your ideal plan on the Medicare.gov plan finder, call the insurance company directly to see if your doctor is in the network.
Be aware of ALL limitations (the only way to be really sure is to get a full presentation from a licensed agent or call the carrier directly).
After your 1st year on a Medicare Advantage plan you can no longer go back to Original Medicare Plus Medigap as “guaranteed issue.”
If you don’t feel comfortable researching and enrolling yourself online, find a nearby agent that really knows your local Medicare Advantage market.
What is my number one recommendation?
My first recommendation is always to go with a Medigap plan.
The coverage and freedom can’t be beat.
Medicare Advantage plans are too unpredictable, too limiting, and you could lose your ability to ever get a Medigap plan again.
Last but not least – Medicare Part D
Medicare Part D is your prescription drug coverage. It’s important to enroll when you first become eligible to avoid penalties later.
If you decide to enroll in a Medicare Advantage Plan, most plans include your Part D.
Make sure the plan you choose includes prescription coverage.
If you choose to supplement Medicare with a Medigap policy, you will have to add a stand-alone drug plan.
The process for finding a Part D plan is exactly the same as your search for a Medicare Advantage plan.
Go to the plan finder on Medicare.gov. Follow the instructions (make sure to enter a complete list of your medications).
It is staggering how much the plans can vary in price based on an individual’s list of medications.
Review your coverage annually! Many agents will do this for you, for free, if you are an existing client (I do this for my clients).
That’s a wrap!
- It’s in your best interest to enroll in Medicare when you turn 65. Enroll early so your coverage can begin the first day of your birthday month.
- Chances are your employer plan is more expensive and less coverage than Medicare plus a supplement. Compare before you decide to delay your Medicare enrollment.
- If you plan to delay enrolling in Medicare for any reason, make sure to find out whether you will end up with a penalty. Talk to a professional about any drawbacks to waiting.
- Find out the difference between Medicare Advantage Plans and Medicare Supplements (Medigap)
- Determine which plan type is the best fit for you.
- Once you decide what plan you are going with, you can either get help from an experienced agent (always free), research and enroll yourself online, or call a carrier direct and enroll over the phone.
I’m continually striving to make this information more simple and easy to understand. Let me know if anything was confusing or you still have unanswered questions.