If you’re approaching age 65, now’s the time to consider your Medicare enrollment. Medicare is the Federal health insurance program for those aged 65 and older (plus other eligible adults). Familiarizing yourself with the Medicare program can help maximize your entitlements. SageVest Wealth Management outlines the basics of Medicare enrollment at age 65.
Basic Medicare – Parts A and B
Medicare consists of several plans or ‘parts.’ Parts A & B are called ‘Original’ or ‘Traditional’ Medicare because they formed part of the initial Medicare program back in 1965. Medicare Part A is hospital insurance and Medicare Part B is medical insurance that covers doctors’ services, outpatient care and other medical services. Most health insurance plans pay secondary to Medicare.
Medicare Part A
When you enroll in Medicare, you’re automatically enrolled in Part A. Part A covers about 80% of costs associated with inpatient hospital care. It’s typically premium-free.
Medicare Part B
Medicare Part B helps pay for doctor visits, services like lab tests, physical therapy, and rehabilitation services, plus medical equipment. You must pay a monthly premium for Medicare Part B coverage.
Additional Medicare Coverage Options
Medicare Parts A and B have many coverage ‘gaps’. They also involve out-of-pocket costs such as deductibles and co-payments. To avoid these extra costs, you can purchase additional coverage to supplement the program’s basic insurance.
Medicare Part C
Also called Medicare Advantage or Medicare Health Plans, these are private insurance options that you can select once you’ve enrolled in Medicare Parts A & B. Offered by Medicare-approved private insurers, Medicare Part C is structured like an HMO or PPO. It covers services offered under Parts A and B, plus items such as dental care and vision.
Medicare Part D
Medicare Part D (also known as Medicare Prescription Drug Coverage) is also offered by Medicare-approved private insurance companies. It helps cover prescription drug costs. You’ll need to pay a monthly premium, copays, and an annual deductible.
Medigap Supplemental Policies
These complement Medicare Parts A, B and D. They come in a variety of plans, again offered by private health insurance firms. These plans can be more expensive, but they strive to cover your out-of-pocket health expenses.
You can only purchase either Medigap or Plan C coverage, not both since this would duplicate coverage.
Some, but not all plans, allow you to obtain coverage out-of-state. This could be an important consideration if you travel, have more than one home, or simply need freedom and flexibility in the medical care you receive.
Employer-Sponsored Health Plans
If you’re still working, your employer’s Group Health Plan (GHP) may cover costs over and above Medicare Parts A & B. You may not need Medicare coverage right away, or you may only need part of it. You might choose to delay enrolling in Medicare Part B until your employer-sponsored coverage ends.
It’s best to find out if you will be able to maintain your current employer-provided health insurance coverage in advance of turning 65, how the coverage will work with Medicare, and any costs you’ll incur to maintain employer-provided health insurance. Your employer or benefits administrator may be able to help answer these questions for you. It’s wise to compare insurance costs and coverage benefits with the options available under Medicare Part B.
Research your options carefully before changing your current healthcare coverage. We recommend that you contact Medicare, your current insurer, and your employer or union who provides your GHP coverage.
Enrolling in Medicare
Your Initial Enrollment Period (IEP) lasts seven months: the three months preceding your 65th birthday, the month of your 65th birthday, and the three months following your 65th birthday.
You can enroll later but may be subject to a late payment penalty plus higher premiums. Enrolling in Medicare during the three months before your 65th birthday ensures that everything is in place, and that you can begin receiving healthcare benefits as soon as you turn age 65.
If you already receive Social Security benefits at age 65, you should automatically receive a mailing about 3 months prior to your 65th birthday. If you’re not receiving Social Security benefits as you approach age 65, you’ll need to actively apply for Medicare.
Once you enroll in Part B, your Medigap open enrollment period begins.
Enrolling in Medigap
The open enrollment period for Medigap coverage begins on the first day of the month in which you’re 65 or older and also enrolled in Medicare Part B. The period lasts for six months from this date.
It’s best to purchase your Medigap policy during this timeframe because you can’t be denied coverage, regardless of illnesses or medical conditions. However, you may have to wait up to six months for coverage of pre-existing conditions.
If you miss your open enrollment period, you may have to pay higher premiums or even be denied Medigap coverage.
You enroll in Medigap by applying directly to the insurance company that offers the policy you have selected.
Additional Resources
This article is intended to offer only an overview of the Medicare program. The Medicare program is extensive and complex. To check your eligibility and apply for coverage, contact your local Social Security office, call toll-free at 800-772-1213, or visit the Social Security Administration’s website. For specific benefit questions, call 1-(800)-MEDICARE (1-800-633-4227) or Medicare.gov.
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