Part 1 in our Medicare 101 series will answer the following three questions –
- What is Medicare?
- Are you eligible for Medicare?
- How to enroll.
So lets jump right in!
Medicare: The Maze of Confusion
By now you’re probably aware that Medicare has quite the reputation for being a maze of confusion, and a cause of frustration for the ones that rely on it the most.
Lets go over exactly what Medicare is, as a foundation to your understanding about how the supplements work.
Why is this important?
Because getting this foundation will help you better understand the differences between the plan types.
There’s really just two scenarios to “supplement” your Medicare.
When I teach about Medicare, I always emphasize the big picture, (without drowning you in details) and use LOTS of repetition.
You’re going to see how easy this can be, and by the end of this 5 part series you’ll have a solid grasp of your options and will have learned how to choose what path is right for you!
So Let’s move on to What Medicare is, and what it covers.
What Is Medicare?
Medicare is a health insurance program primarily for people age 65 or older, administered by the Federal government (it also benefits those under age 65 with a disability).
Medicare is not to be confused with Medicaid, which is income based, and for ALL ages.
We’re going to cover just the two main Parts of Medicare to start – Parts A & B.
The Hospital coverage is Part A, and doctor visits plus other medical services are covered by Medicare Part B.
Usually the Part A hospital coverage requires no monthly cost to you; as long as you worked and paid Medicare taxes the required number of years.
Part A covers inpatient hospital, which means you are admitted and stay overnight 1 or more nights.
Part A also covers:
- Skilled Nursing Facilities
- Hospice
- Some Nursing Home Care (non-custodial)
- Home Health Care
Part B is most often known for covering doctor visits.
Part B also covers:
- Labs, X-rays, CT scans and MRIs
- Outpatient surgeries (which means you have a procedure done, but go home the same day)
- Chemotherapy & Radiation,
- ER,
- Ambulance,
- Mental Health Services
- Durable Medical Equipment
Medicare Part B will cost you a monthly premium.
There’s a standard premium that the majority of folks pay, and this is based on your income level.
The good news is, there’s no additional cost for preventive care on Medicare Part B.
Now just a quick mention of the remaining parts of Medicare – Medicare Part C, and Medicare Part D.
Medicare Part D is for prescriptions, and the plans are ONLY available through private insurance.
More about this later.
Medicare Part C combines Medicare Parts A and B (and sometimes D) into ONE plan, administered through private insurance companies.
This is called Medicare Advantage, and while some folks love this program, it is still a source a great controversy and confusion.
Just To recap –
Medicare Part A and B provide your Hospital and Medical coverage.
These Parts of Medicare are known as “Original Medicare”.
No matter what path you choose on Medicare, you have to start by enrolling in Original Medicare first.
Two most important “need-to-know” facts about Original Medicare:
#1) There’s no out of pocket Maximum cut-off on Original Medicare.
That means there’s no limit to what your portion of the costs might be.
So why is this important?
This gives argument to the case for choosing a supplement.
#2) There are no networks with Original Medicare.
You have the freedom to use any hospital or doctor in the U.S. that accepts medicare.
Why do networks matter?
Because many folks these days are enrolling in plans that HAVE network restrictions, and don’t realize until it’s too late just how frustrating and limiting this can be.
So this is something to consider right from the get-go.
Is provider freedom important to you?
This concept of provider freedom is going to come up again and again as we move through this training.
Are you Eligible for Medicare?
First, unless you are under 65 and disabled, the general eligibility age for Medicare is always age 65.
It’s important to note that the time to enroll is months before you’re 65th birthday, because the benefits may start as early as the 1st day of your birthday month.
So if you’re 65, or almost 65, you may need to hurry so you don’t miss out!
What about Social Security?
Medicare eligibility is not dependent upon when you begin receiving Social Security benefits.
In other words, if you delay your Social Security benefits, you’re not required to delay Medicare also. In fact, you may be penalized if you wait.
In most cases, as long as you’re eligible, you should enroll in Medicare by age 65.
Here’s how to check your eligibility for Medicare, and how to find out your Part B premium.
[If you are already enrolled, and know the amount you’ll be paying, stay tuned, because in just a moment I’m going to cover some of the most frequently asked questions about Medicare eligibility and enrollment.]
Medicare has a very easy to use eligibility and premium calculator tool.
Click “Find out if I’m eligible,” and enter your date of birth.
If you are currently 65, or within 3 months of your 65th birthday, it’ll ask you a series of eligibility questions.
Answer the questions to be taken to a results page with the exact dates of your Initial Enrollment Period, and other information about enrolling in Medicare.
This page even includes a link to enroll in Medicare, and explains the late enrollment penalty.
If it’s MORE than 3 months until your 65th birthday, the eligibility calculator will not ask you the eligibility questions, but will only inquire whether you are disabled.
However, the tool will still let you know when your future Initial Enrollment Period is.
The Initial Enrollment Period (IEP) is a 7 month span of time, based on the month of your 65th birthday.
The IEP begins three months before your birthday month, includes the month of your birthday, and extends an additional three months beyond the month you turn 65.
You may inquire about your eligibility further by contacting Social Security.
How to Enroll in Medicare
We just went over what an Initial Enrollment period is, how to use the eligibility calculator, and that you can even access the online enrollment right from the calculator.
I wanted to mention a few more points about enrolling in Medicare that you need to consider.
If you already happen to be receiving Social Security benefits, you’ll be automatically enrolled in Medicare three months before your birthday month, and will receive your Medicare card in the mail.
However, it’s probably more common that you’ll still be working around the time you turn 65, and won’t be receiving social security benefits yet. So in that case you’ll have to actively enroll.
In this case, the easiest way to enroll is online.
Alternate enrollment options are to call or visit your local Social Security office.
In Most Cases You Shouldn’t Delay!
Unless you have full health insurance coverage through your employer, and your monthly out of pocket premium costs for Medicare would be much higher than what you pay for your insurance now, I can’t think of any reason to delay getting enrolled in Medicare as soon as you’re eligible.
Many folks tend to procrastinate, including me!
(I’m definitely working on this…)
But since you’re taking part in this mini-course, and getting the help and information you need, I’m confident you’ll be motivated to take action right away!
So if there’s no reason to wait, you may enroll in Medicare three months before your birthday month, and it will be effective the first day of your birthday month (unless your birthday is on the 1st).
If your birthday is on the first, it backs up your eligibility one whole month, so it’s actually effective the first of the month before your birthday month.
If You’re Already Enrolled in Part A and Still Need Part B
If you are over 65, and maybe you enrolled in Part A already but opted not to get Part B yet because you’re still working, that’s ok.
Maybe now that you’re retiring and losing your group coverage, you’d like to add Part B. This is quite common, but takes a little more effort to enroll because you can’t just enroll online (this option is only available if you’re enrolling in both Parts A & B for the first time).
So again, if you have Part A, you’ll need this specific form, and will have to either mail it or bring it to your local Social Security office.
After you complete your enrollment, you’ll receive your medicare card in the mail prior to your effective date.
If you do this early (which I highly recommend), it gives you plenty of time to learn about the options you have to supplement your medicare, and learn about how the prescription coverage (Part D) works.
Where you might get stuck
Top three mistakes to avoid –
- Don’t procrastinate – I already mentioned this, but it truly is important. It gives you enough time to get enrolled, learn about supplemental plan options, decide if you want a drug plan, and avoid penalties.
- If you are working and have group health insurance, you may safely postpone enrolling in Medicare Part B. But, if your employment ends and you get on COBRA (which is an extension of your group coverage after employment), you may no longer safely postpone Medicare Part B. In other words, even though you’re still on the group plan, the end of your employment triggers your medicare enrollment period, even though you’re still on the group plan through COBRA.
- Not learning about all your options, and just choosing a plan, “because my neighbor has it,” for example… I’m just going to throw this out there for now, but will come back to it in a later part – It’s imperative you learn the supplement options, because the plan with the most freedom (no networks) might be impossible to get later if you develop certain health conditions.
That concludes Part 1 of the “New to Medicare 5 Part mini-course!”
If you have any questions or comments, please leave them below. And I’ll see you on Part 2!