Nearing retirement? Have a 65th birthday coming up? If you answered “yes” to either, you may be wondering what your healthcare options are—and what you need to do to ensure proper health coverage. Of course, most choose to enroll in Medicare, but between Parts A, B, and C and Plans L, M, and N, it all starts to look a little bit like alphabet soup.
It’s important to understand how Medicare works, so you can make the right choices for your insurance needs. Below, we provided a brief overview of what Medicare is, who qualifies, and how it works.
What is Medicare?
Medicare is the national health insurance program, established by Congress in 1965 for citizens who are 65 years or older and for younger people with certain disabilities. It is administered by the Centers for Medicare & Medicaid Services (CMS).
What Does Medicare Cover?
The different parts of Medicare cover different services and expenses, such as hospital stays, doctor’s visits, prescription drugs, and more.
Original Medicare includes:
- Medicare Part A (Hospital Insurance): Provides coverage for inpatient hospital care, care in a nursing home, hospice, and some home health care.
- Medicare Part B (Medical Insurance): Provides coverage for outpatient care, certain doctor’s services, medical supplies, and preventative services.
Medicare Part D (Prescription Drug Plans) is not included in Original Medicare but can be elected as an add-on to Medicare Parts A and B. Medicare Part D provides coverage for the cost of medications, including many shots and vaccines.
Medicare Advantage Plans
Medicare Advantage Plans (Medicare Part C) is an alternative to Original Medicare that bundles all Medicare coverage into one private insurance policy. It typically covers Parts A, B, and D, but can sometimes also cover dental care, vision benefits, and more.
Medicare Supplement, or Medigap plans, refers to Medicare Plans A through N. These are voluntary, additional coverage options that help fill in any gaps left uncovered by Medicare Part A and Part B, and coverage varies by each plan’s benefits.
When enrolling in Medicare, most choose between Medicare Advantage and Medicare Supplement plans (but that’s a blog post for a different day).
Who Qualifies for Medicare?
To be eligible for Medicare, you must be:
- Age 65 or older
- Disabled and have been receiving Social Security Disability benefits for at least 24 months
- Suffering from certain applicable diseases, such as End Stage Renal Disease or Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig’s disease), just to name a few
Additionally, to qualify for Medicare, you must be a U.S. citizen or permanent legal resident for five continuous years. You must also be eligible for Social Security benefits with at least 10 years of payments contributed to the system.
How to Apply for Medicare
While the CMS is in charge of the Medicare health insurance program, you’ll apply for your coverage through the Social Security Administration (SSA). Those who are already collecting Railroad Retirement Board or Social Security retirement benefits are automatically enrolled in Medicare Parts A and B around their 65th birthday and do not have to apply. Your Medicare card and enrollment information are typically mailed three to four months before your 65th birthday.
If you don’t want to be automatically enrolled in Medicare Part B, (perhaps you already have health coverage through an employer or union), you have a few options to drop the coverage depending on whether your coverage has started:
- If you have already received your Medicare card and your coverage hasn’t started, simply follow the instructions on the back of your card.
- If your Medicare coverage has started and you want to drop Part B, contact Social Security for instructions on how to submit a signed request. Your coverage will end the first day of the month after Social Security gets your request.
If you are not automatically enrolled in Medicare, you may need to manually enroll. There are several ways you can enroll in Medicare Part A and/or Part B:
- Online at https://www.ssa.gov/
- By calling Social Security at 1-800-772-1213
- In-person at your local Social Security office
If you’d like to enroll in Part D, want to switch to Medicare Advantage (Part C), or want to enroll in a Medigap plan, you can do this during enrollment. There are several enrollment deadlines and dates you’ll need to be aware of.
Initial Enrollment Period
This is a seven-month window around your 65th birthday. It begins three months before your birthday, includes the month of your birthday, and extends three months after your birthday. During this time, you can enroll for Medicare Parts A, B, and D, including Medigap or Medicare Advantage without a penalty.
Medicare’s open enrollment is from October 15 through December 7 every year. During this time, you may enroll in Medicare Part D, change from Original Medicare to Medicare Advantage (and vice versa), make changes to your Medicare Advantage plan, or drop your drug coverage completely.
If you did not enroll in Medicare during your initial enrollment period when you were first eligible, you can enroll during the General Enrollment Period, which is from January through March 31 every year. You may have to pay a late enrollment penalty. During this time, if you’re already enrolled in a Medicare Advantage plan, you can also switch to a different Advantage plan or switch to Original Medicare.
In instances where you did not choose to enroll in Medicare Part B when you were first eligible, you can sign up at any time that you are still covered by the group plan or during a Special Enrollment Period (SEP).
You also have an eight-month window that begins either the month that your group health coverage ends to sign up for Part A and/or Part B. Typically, you do not have to pay a late enrollment penalty.
Medigap Open Enrollment
This is a six-month window that begins the month you turn 65 and are enrolled in Medicare Part B. However, if you decided to delay your enrollment in Medicare Part B, this period will not begin until you sign up for Part B.
Get the Health Coverage You Need
At The JL Smith Group, we specialize in helping you make the right choices to get the health coverage you need. Through a comprehensive planning process, our advisors will explore your needs in order to keep your costs down and help you find the full range of coverage that best meets your needs. Call (440) 934-9181 or contact The JL Smith Group to schedule a Medicare consultation today!
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