With the 78 million baby boomers entering retirement years, about 10,000 boomers a day will reportedly be turning 65 between now and 2030. If you are nearing age 65, you should be thinking about Medicare in advance. The age for Medicare eligibility is still age 65. It has not changed. Delaying enrollment can result in costly and unexpected penalties, so it is important to know your options and act promptly.
If you want in-person, unbiased counselling through this area, you may want to consult with NC SHIIP through the NC Department of Insurance. The contact information is at the end of this article.
Medicare includes four major programs, as follows:
- Part A covers hospital stays
- Part B covers physician fees
- Part C provides Medicare beneficiaries optional, alternative plans (sometimes called Choice or Advantage plans) for care coverage
- Part D covers prescription medications
In addition to these government programs, Medigap policies (also called supplemental insurance policies) are available for purchase for additional coverage to individuals enrolled in Parts A and B.
You can begin Medicare enrollment three months before your 65th birthday, and for the 7 months afterwards. If currently receiving Social Security benefits, you don’t need to do anything. Effective the month you turn 65, you will be automatically enrolled in Medicare Parts A and B. However, if you do not receive Social Security benefits, then you would sign up for Medicare by calling the Social Security Administration at 800-772-1213 or visit online at http://www.socialsecurity.gov/medicareonly/.
Generally Medicare Part A does not require a monthly payment. But if you have a limited work history, you may have to pay a Part A premium. Most people pay a premium for Part B. That premium can increase based on the person’s income, or if they did not enroll in Medicare when they were first eligible. You can sign up for Medicare Part A without signing up for Part B, but you might have to pay more for Part B if you don’t sign up right away.
You may not need to sign up for Medicare Part B immediately if you still are working and have an employer or union group health insurance plan. However, proceed carefully or you may get an unpleasant surprise later. First find out from your employer whether the employer’s plan is the primary insurer. If not (i.e., Medicare, rather than the employer’s plan, is the primary insurer), then you still will need to sign up for Part B. Even if you don’t sign up for Part B, you still should enroll in Part A, which may help pay some of the costs not covered by your group health plan.
For everyone else (i.e., if you don’t have an employer or union group health insurance plan, or that plan is secondary to Medicare), you need to sign up for Medicare Part B during your initial enrollment period. Otherwise you will be subject to a penalty that will increase the cost of Medicare Part B for the rest of your life. Your Medicare Part B premium goes up 10 percent for each 12-month period that you could have had Medicare Part B, but did not take it. If you miss the initial enrollment period, you have to wait for the next general enrollment period to enroll. The general enrollment period usually runs between January 1 and March 31 of each year.
After you’ve signed up for Medicare Part B, you can schedule a free “Welcome to Medicare” exam with your doctor.
Medicare does not cover all medical costs, and there are various deductibles and copayments. If you select traditional Medicare Part A and B, you may want to purchase a “Medigap” insurance policy from a private insurer to help cover some of the Medicare deductibles and copayments. You can search online for a Medigap policy in your area at http://www.medicare.gov/find-a-plan/questions/medigap-home.aspx.
If you are enrolled in Medicare Parts A and B, you have the option of selecting a health care plan under Medicare Part C (also called Medicare Advantage). There are various Medicare Advantage plans, which are private health plans that operate under the Medicare Part C program. If you join a Medicare Advantage Plan, the plan provides all of your Part A and Part B coverage, along with extra coverage, such as for vision, hearing, dental, and/or health and wellness programs. Many Advantage plans include Medicare prescription drug coverage. However, there will also be more limitations on where you can get your care, and particular limitations on services for rehabilitation.
Medicare Part D supplements Medicare Parts A and B with prescription drug coverage. Signing up for Part D may not be necessary if you sign up for a Medicare Advantage plan with prescription drug coverage. But if you’re sticking with traditional Medicare Parts A and B, then you should enroll in a prescription drug plan when you sign up for Parts A and B. Delaying your enrollment in Part D past the initial enrollment period means your Medicare Part D premium increases at least 1 percent per month. This penalty doesn’t apply if you did not enroll because you had “creditable coverage” for prescription drug costs from a private insurer, such as through a retirement plan, at least as good as Medicare’s. Ask your insurer whether their coverage will be considered creditable. You can visit the Medicare Web site at https://www.medicare.gov/find-a-plan/questions/home.aspxto find a drug plan in your area.
In North Carolina, you may want to consult with the Seniors’ Health Insurance Information Program (SHIIP). NC SHIIP counsels Medicare beneficiaries and caregivers about Medicare, Medicare supplements, Medicare Advantage, Medicare Part D, and long-term care insurance. This is free, in-person counselling by a toll-free phone line, through the NC Department of Insurance and the counselors are selling any products. The website is at http://www.ncdoi.com/SHIIP/ and the toll-free phone number is 855-408-1212.