Making Sense -- and Making the Most -- of Medicare
Tools and Tips
With its multiple parts and the many choices it offers, Medicare can seem complicated, even confusing. But learning the basics will help you navigate the program. And the following advice, from the American Geriatrics Society’s Foundation for Health in Aging, will help you make the most of it.
While Medicare helps cover healthcare costs, it doesn’t cover all medical expenses or the cost of most long-term care. The program has four basic parts:
Medicare Part A is hospital insurance that helps cover necessary care in a hospital, or a skilled nursing facility following a hospital stay, some home healthcare, and hospice care. There are deductibles, co-pays and other out-of-pocket costs for stays, services, and equipment.
Medicare Part B is medical insurance that helps cover most doctors’ services, preventive care, hospital outpatient services, laboratory tests, X-rays, mental heath care, some home health and ambulance services, and durable medical equipment. There are out-of-pocket costs for some services. Medicare Parts A and B are together known as “traditional Medicare.”
Medicare Part C is private “Medicare Advantage” insurance that helps cover both hospital and medical services and is an alternative to traditional Medicare. Medicare Advantage plans are usually “managed care plans” and the cost of Medicare Advantage coverage varies from plan to plan.
Medicare Part Dis prescription drug insurance that helps cover the cost of medications that your healthcare professionals prescribe.
Note: Supplemental health insurance policies called Medigap policies are not part of Medicare. Sold by private insurance companies, they help cover certain healthcare costs that Medicare doesn’t. Usually, you must have Part A and B coverage or Medicare Advantage coverage in order to buy Medigap.
Tips for Making the Most of Your Medicare Coverage
If you started getting Social Security benefits before you turned 65, you’ll be automatically enrolled in Medicare, effective the first day of the month you celebrate that birthday. If you’re not already getting Social Security benefits by the time you turn 65, you’ll have to sign up for Medicare by calling or visiting a Social Security office. (To find an office near you, call 800-772-1213; TTY 800-325-0778.) If you want prescription drug coverage, you’ll also have to sign up for that, too, or choose a Medicare Advantage plan that covers drug, medical and hospital care. To make the most of your coverage:
Sign up for Part B coverage early to avoid penalties
If you started getting Social Security prior to turning 65, you’ll be automatically enrolled in parts A and B—but can decline Part B coverage. Likewise, if you’re signing up for Medicare, you can choose Part A coverage only, and skip Part B. If you think you’ll want Part B eventually, however, it would be a mistake not to get it from the start. Why? There’s a penalty for getting Part B later, instead of sooner: If you don’t choose to have Part B from the outset, you’ll be charged a higher Part B premium when you do opt to sign up for that coverage later on. In fact, each year you wait to enroll in part B, the penalty gets bigger. One exception: If you have health coverage through your or your spouse’s employer, you may be able to defer enrolling in Part B without paying a late enrollment penalty. Check with your Social Security office.
Consider several factors when choosing between original Medicare and Medicare Advantage
If you don’t need a lot of care, Medicare Advantage plans may be less expensive than original Medicare, according to the Medicare Rights Center. Keep in mind, however, that these private plans may place more restrictions on where and when you get care. They may, for example, cover services only if you get them from physicians or at hospitals in their “network.” For that reason, you should check to see whether your healthcare providers and hospital are in the networks of the Medicare Advantage plans you’re considering. Some of these private plans also require that you get prior permission for certain services—a referral from your primary physician to see a specialist, for example. For this reason, they may not be the best choice if you need a lot of specialized medical care.
Compare options when shopping for a plan
Medicare’s online “Medicare Options Compare” search tool—at http://www. medicare.gov/choices/advantage.asp—can help you compare original Medicare, Medicare Advantage, Medicare prescription drug, and Medigap plans, to find those that are the best match for you. If you don’t have a computer, ask a friend who does to help you use the search tool. Or visit your public library; most have computers and Internet service and staff who can show you how to use them.
Enroll early in Part D
As with Part B, it’s usually better to sign up for Part D earlier than later. In most cases, you’ll pay a higher premium for Part D if you wait. If, however, you or your spouse are still working after turning 65 and your employer provides you with “creditable” prescription drug coverage (coverage that’s as good as or better than Part D coverage) you can sign up for Part D later without paying a penalty. In that case, you can avoid the penalty if you sign up for part D within 63 days of leaving your job or losing your employer-provided insurance. Check with your Social Security office to make sure this is an option for you.
Consider Medigap coverage if you have original Medicare
Getting Medigap coverage is generally a good idea if you have original Medicare, since deductibles and co-pays can add up, according to the Medicare Rights Center. Note: Medigap polices are designed to supplement original Medicare but not Medicare Advantage plans.
Sign up for Medigap within six Months of getting Part B coverage
If you want a Medigap policy, enroll within six months of signing up for Medicare Part B. The private companies that sell Medigap insurance can’t refuse to sell you a policy, or charge you more for a policy because you have certain health problems, if you buy within this sixmonth period. If you try to buy later, the companies may turn you down.
Reevaluate your plans annually
From one year to the next, the cost of differing plans and what they cover can change. In addition, new plans may come on the market. So don’t assume that the plan that looked like the best option this year will still be the best option next year. Compare plans annually. During Medicare’s “Annual Coordinated Election Period,” which runs from November 15 through December 31 every year, you can change plans. You can also make some changes (but can’t add or drop Medicare Part D coverage), during the Medicare’s “Open Enrollment Period,” which runs from January 1 through March 31.
Get the financial help you need
If you need help with Medicare costs, call 1-800-MEDICARE (1-800-633- 4227 TTY 1-800-325-0778) and ask about getting financial assistance, or visit www.medicare.gov.
Medicare’s “Medicare and You” is an easy to understand, comprehensive guide to Medicare. You can find it online, or order a free printed copy by calling 1-800-MEDICARE.