Medicare Questions to Ask
If you have just turned 65, then you might be eligible to enroll in Medicare. Medicare is a health insurance program offered by the federal government to retirees and others who qualify.
There are many options for health coverage with Medicare. It’s good to understand a little bit about these options, as they may be confusing, or at least at first.
To help you get started, here are some basic questions that you probably have about Medicare – and what different things can entail.
What is Medicare?
Medicare is a federal government program that gives seniors access to healthcare. It’s administered by the Centers for Medicare and Medicaid Services, which is an agency inside the U.S. Department of Health and Human Services.
In short, it’s a federal health insurance program for senior citizens. There are four separate parts to this program: Parts A, B, C, and D.
Parts A and B are referred to as “original Medicare,” because they were the two parts that were created when Medicare was first introduced. Parts C and D were added later.
Who is Medicare for? When are they eligible?
Medicare is offered to eligible individuals who are age 65 or older. If you qualify for Social Security disability or have been diagnosed with end stage renal disease (ESRD), then you may also be eligible for Medicare.
Medicare only offers coverage to individuals. There is no family coverage available under Medicare, as you would find with private health insurers.
If you are married, both you and your spouse will have to enroll in Medicare separately. Should you be eligible to enroll in Medicare when you turn 65, then your eligibility period will begin three months before the month in which you turn 65 and end three months after this month.
This is known as the Initial Enrollment Period. Medicare also offers a Special Enrollment period. This period is for those who are still covered under their employer’s health insurance plan when they turn 65 or have certain types of life changes, such as relocating or losing their current health coverage.
What if you don’t enroll in Medicare during the Initial Enrollment Period and you don’t qualify for the Special Enrollment Period? Then you will have to wait until the next General Enrollment Period begins the following January (and lasts through the end of March).
If you must wait for the General Enrollment Period to begin before you enroll, then your coverage won’t begin until July. You will also have to pay a late fee that is added to your Part A and Part B premiums.
What are your Medicare options?
As mentioned previously, there are four separate parts to the Medicare program. Each part covers a different aspect of healthcare.
Medicare Part A is one of the two original programs in Medicare. This part of Medicare provides hospital insurance. It will pay 80% of the costs that are incurred if you need hospital care. The expenses that Part A covers include:
Inpatient hospital care – expenses such as a semi-private room, meals, skilled nursing care, rehabilitation-related services, drugs that are necessary for your treatment, and other miscellaneous services and supplies.
The types of facilities in which you can get qualifying inpatient care include: acute care hospitals, critical access hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term care hospitals, and any inpatient care you receive as part of a qualifying clinical research study.
Home healthcare – nursing care that is only needed on a part-time basis when it’s medically necessary. This includes physical therapy, speech/language pathology, and ongoing occupational therapy.
Hospice care – for those with terminal illnesses or conditions. The recipient must have a life expectancy of six months or less to be eligible for this type of coverage.
Medicare Part A won’t pay for private-duty nursing, the cost of a TV or telephone in your room (if these are billed separately), or personal items of any kind (i.e., clothing, smartphones, etc.)
This is the other original part of Medicare, and it covers outpatient medical treatments. Part B covers the following types of expenses:
- Medically necessary doctors’ services
- Many forms of preventative care
- Durable medical equipment, such as walkers or wheelchairs
- Outpatient care from a hospital
- Laboratory tests
- Outpatient mental health treatment
- Some types of home healthcare
- Ambulance services
- Diabetic supplies
- Emergency room services
- Flu shots
- Screening mammograms
- Physical therapy
- Certain types of transplants
- Outpatient occupational therapy
Parts A and B both have premiums, deductibles, and coinsurance just like a health insurance plan in the private sector. Once the deductible has been met, Medicare will generally pay 80% of the cost of the services listed above. The insured is required to pay the remainder of these expenses out of pocket.
Most people don’t have to pay premiums for Part A because they paid Medicare taxes while working. However, everyone must pay the premiums for Part B. The amount of the Part B premium changes each year and varies based upon the insured’s income.
Original Medicare doesn’t cover dental, vision, hearing costs, cosmetic surgery, acupuncture, long-term care, or routine foot care.
Those who want or need this coverage will have to purchase separate policies for them, unless they decide to buy a Medicare Advantage Plan that offers this coverage (see below).
Part C – Medicare Advantage Plans
This alternative to Medicare Parts A and B works in the same way as an HMO or a PPO. Each Medicare Advantage plan must at least cover all services that Medicare Parts A and B cover.
Some Medicare Advantage plans also include prescription drug coverage. Advantage plans can have other types of coverage such as for dental, vision, hearing, and/or health & wellness programs.
Insured persons must be eligible for Medicare Parts A and B and live within the area that is covered by the plan. Those who have been diagnosed with ESRD aren’t eligible for this type of plan.
Medicare Advantage Plans only allow participants to use in-network services. Each plan is linked to a specific selection of doctors, hospitals, and healthcare facilities.
If you go to a provider who isn’t in their network, then you will have to pay for the entire cost yourself.
So, if you are considering enrolling in one of these plans, find out whether your current doctor and other healthcare providers are in that program’s network. Also, keep in mind that there might be co-pays and additional costs that you shoulder. Your financial professional can explain this in more detail.
Part D – Prescription Drug Plans
This plan covers some or all costs of both generic and prescription drugs. Medicare beneficiaries must choose a specific plan and join it on their own.
These plans are run by commercial health insurance companies or other companies in the private sector. All companies that offer this kind of coverage must meet the federally mandated criteria for this type of plan.
Medicare Advantage recipients can also purchase this type of coverage. Their plans are known as Medicare Advantage Prescription Drug Plans (MAPDs).
Part D plans have their own premiums, copays, and deductibles, and they come at an additional cost to Original Medicare.
Medicare Supplement Plans
Medicare supplement plans aren’t plan of Medicare per se. Even so, they are designed to cover most or all of the costs that the three basic parts of Medicare don’t cover (Parts A, B, and C).
Hence their name noting them as a supplemental. Medicare supplement plans are also known as Medigap plans.
You can’t hold a Medicare supplement plan if you already own a Medicare Advantage plan. These supplement plans are offered by commercial health insurance companies. Separate plans are available, and each plan is standardized.
These plans come at additional cost, so that is good to know. That being said, someone can buy a Medicare supplement plan and have great financial peace of mind in knowing that much of their healthcare expenses are covered. Ask your agent or financial professional for more information on what these options might involve.
How do you sign up for Medicare?
Have you decided on which Medicare program you want to enroll in? Consider speaking with your agent or financial professional about your options, and what else you should know, before making a choice.
No matter what, you will probably need to fill out an application form and submit it to Medicare. If you are going to use Parts A and B, you can apply online at SSA.gov.
Should you be unable to finish the entire application in one sitting, get a re-entry number so that you can come back to your application and finish it later. You can also call Social Security and apply over the phone.
For a Medicare Advantage plan, it’s advantageous to speak with your agent about your options here (and for other plan options in general).
You can sign up for Medicare Advantage plans during:
- the normal enrollment period (three months before and after the month in which you turn 65),
- the annual Open Enrollment Period for Part C (which lasts from October 15 to December 7), or
- a Special Enrollment Period if you qualify.
What will Medicare cost me?
Most enrollees in Medicare won’t have to pay anything for Medicare Part A premiums. That is because they have paid Medicare taxes from their wages for at least 40 qualifying quarters.
Those who don’t meet this standard will pay $278 per month in 2023. In 2022, it was $274 per month if they had 30-39 qualifying quarters of income. They will pay $506 per month in 2023 and paid $499 per month in 2022 if they have/had less than 30 qualifying quarters of income.
The deductible that participants must pay for Part A is $1,600 in 2023 and was $1,556 in 2022. This will cover the bill for a hospital stay of up to 60 days.
Those who are in the hospital for 60 to 90 days must pay a coinsurance cost of $400 per day in 2023 and paid $389 per day in 2022.
After 90 days are up, the number jumps to $800 in 2023 and was at $778 in 2022. The coinsurance cost for a stay at a skilled nursing facility is $200.00 in 2023 and was $194.50 in 2022.
Part B premiums have been based on your income level since 2007. There are six separate brackets of income from zero to over a half-million dollars.
The lowest premium is $164.90 for single filers with incomes of $91,000 or less or twice that amount for joint filers.
The highest bracket is for single filers with incomes of at least $500,000 or $750,000 for joint filers. For them, the monthly premium is $560.50.
What Medicare plan is right for you?
To find the best Medicare option for you, start by looking at your present health status and current health insurance coverage. From there, your post-retirement budget will help you see how much you can afford for premiums, copayments, and other costs.
The next step is to assess which types of coverage you may need.
What if you have a family history of dementia, cancer, or heart disease? Then it may be prudent to get a larger amount of coverage, as the costs for treating those conditions can be involved.
If you don’t take many medications now, then consider that in your choice for Part D coverage. Should you have chronic health problems that don’t appear to be going away soon, then a Medigap policy may be a good idea.
You might also consider a Medicare supplement plan if you are concerned about how much you might be paying in health expenses overall.
Sure, your monthly costs will be higher. But you can have peace of mind knowing that you probably won’t have to pay a huge medical bill out of pocket.
Not all Medicare Advantage plans are equal. Some cost more than others, and some have wider networks of providers than others.
If you plan on doing a good deal of traveling after you retire, then you should make sure that your plan can cover the costs of out-of-state treatment.
Where can I go for more help?
We have covered the basic tenets of Medicare here. But you probably have some further questions that you would like to have answered before you get started.
An independent agent or financial professional at SafeMoney.com can be of great assistance here.
They can help you understand different options in depth, determine which Medicare plan is best for you, and show you how to get that coverage. These financial professionals are independent, meaning they work for you and aren’t beholden to any one insurance company.
Don’t be afraid to ask any questions about things you don’t understand. You can also find more information on the Medicare website at Medicare.gov. This site has lots of additional information that can help you.
If you are ready for an agent or financial advisor to help you, get started by using our “Find a Financial Professional” section. You can connect with someone directly and talk about your health coverage needs. Should you need a personal referral, please call us at 877.476.9723.