For those approaching the age of 65, Medicare can be confusing, and you might also be wondering how it compares to your current health care coverage. This guide helps address questions you might have about Medicare and how you could deal with coverage gaps.
Medicare is a government program that provides medical insurance for United States citizens or permanent legal residents ages 65 and older. It is also available to younger individuals with disabilities. It is not the same as Medicaid, which is a similar program for qualifying low-income people of all ages.
Before you consider Medicare, make sure you are enrolled in social security benefit collection. You can do so through the Social Security Administration website in the time period of three months before and after your 65th birthday.
Once you begin receiving your social security benefits at age 65, you are automatically enrolled in Medicare parts A and B (often called original Medicare). Medicare part A covers hospital costs and Medicare part B covers doctor visits. Prescription coverage, which is Medicare part D, is the only part you need to enroll in yourself as it is an optional add-on.
You might be wondering, what about part C? This is where your options broaden. If you’re not satisfied with the coverage that parts A, B, and D provide, Medicare part C allows you to choose your benefits through a Medicare Advantage plan. Most standalone part C coverage has built-in prescription coverage, but if not, you can still supplement your coverage from part C with additional coverage in part D. Most part C plans offer extra benefits, such as vision, hearing, and dental, among others. So, it may be worth your time to explore those options to ensure you feel comfortable with your coverage.
Here is a summary of what we just reviewed:
- Medicare part A – Covers hospital costs. You are automatically enrolled.
- Medicare part B – Covers doctors’ visits. You are automatically enrolled.
- Medicare part C – Medicare Advantage plan, which you can shop for yourself. It often includes prescription coverage, but you can supplement part C with any other part.
- Medicare part D – Prescription coverage. You must enroll in this yourself if you want it.
Look at the cost guidelines on the official Medicare website for up-to-date premium numbers. We would recommend consulting with a Medicare insurance agent if you are interested in finding the most reasonable prices and plans for a Medicare Advantage plan or if you have general cost questions.
The cost of your Medicare plan depends on which parts you’re enrolled in and a few other personal factors. However, all the plans have options to charge based on a monthly premium, which is a fixed amount you pay each month for your coverage.
There are also options to enroll in parts A and B with a deductible and coinsurance, which means you pay out of pocket for a set amount. Once your deductible has been spent, you may have 100 percent of the costs covered, or, for example, around 80 percent of the costs covered by your plan, and the remaining 20 percent will be paid by you.
Now that we’ve gone over your options, let’s talk about how to choose the right coverage for you. According to most Medicare resource sites, these are the questions you should consider before enrollment:
- How often do you go to the doctor?
- What health issues do you have or are you predisposed to?
- Do you take medication regularly? If so, are you comfortable paying those costs out of pocket?
- Do you have a specialist you see regularly?
- What can you pay each month in premiums?
- Are you able to pay copays or coinsurance for services?
- Would a high out of pocket cost completely throw off your budget?
- Do you have doctors, hospitals, and pharmacies you like to go to?
- Will you need health care coverage while traveling?
- Are there additional coverages to consider, such as an employer or retiree plan?
Turning 65 is an incredible milestone, so don’t let Medicare options weigh you down. Talk to your team at Planned Financial Services about your questions and concerns after reviewing this guide to ensure you feel confident with your coverage.
Investment advice offered through Planned Financial Services, a Registered Investment Adviser. This article is intended solely to provide general information and is not an offer or solicitation with respect to the purchase or sale of any security. Further, the information contained on this article may not be relied on in any manner as legal, tax, accounting or investment advice.
Content provider: ReminderMedia