Turning 65 can mean a lot of things, but for most people it means signing up for Medicare. This can be a confusing thing to navigate. Let’s take a look at some Medicare basics and what your options are.
Medicare is a federal health insurance program. Those who are turning 65 can sign up between three months before their birth month and three months after their birth month, providing a 7-month window.
There are different parts of Medicare to cover specific services.
Medicare Part A (hospital insurance) covers inpatient hospital stays, care in a nursing facility, hospice, and some limited home health care. Normally, you don’t pay a monthly premium for Part A. There are some people who are not eligible for premium-free, but might be able to purchase Part A.
Part B (medical insurance) covers most doctor visits, outpatient care, medical equipment, diagnostic testing, ambulance service, and preventative services. Part B requires a premium amount, which for most people in 2024, is $174.70 per month and an annual deductible of $240. After the deductible is met, Medicare Part B covers 80% of your covered medical services, the remaining 20% you pay out of pocket.
Medicare Parts A & B are often called Original Medicare. Original Medicare pays most, but not all, of the costs of covered health care services. A Medicare Supplement Insurance, also known as Medigap, can help pay some of the remaining costs of your health care. This includes things like copayments, coinsurance, and deductibles, (the 20% from above). Some Medigap policies may also cover services or supplies Original Medicare doesn’t cover. Generally, you must have Medicare Parts A & B to buy a Medigap policy. One of the big advantages of a Medigap policy is you have the freedom to see any doctor that accepts Medicare.
Part C is known as Medicare Advantage and offers an optional, alternative way to receive your Original Medicare benefits. These plans are offered and managed by private health maintenance organizations (HMO’s). Instead of having Original Medicare, Parts A & B, you would have a managed plan like an HMO. To be eligible, you must already be enrolled in Parts A & B. These plans will cover the same services that traditional plans cover, but the independent HMO are allowed to set their own cost share requirements as well as their own co-pay and coinsurance amounts that you are responsible for paying. These costs are subject to increases as per the HMO. They also have different rules for how you can receive services. A downside to Medicare Advantage plans is they don’t always cover certain expenses when you get sick, resulting in unforeseen out-of-pocket costs, and what you end up paying for these plans can differ depending on your overall health. A significant limitation is Medicare Advantage plans use a network of doctors and hospitals, restricting your care to a list of approved doctors and facilities.
One challenge with the Medicare Advantage plans is that they can leave a market area and stop covering people in that area. Leaving these people to wake up one day with no additional coverage other than their original Medicare parts A & B. Medicare Supplement insurance companies can’t do that, providing you with reliable coverage. Once you are covered, the only way to lose the policy coverage is to stop paying the premiums.
Part D helps pay for prescription drugs and recommended shots and vaccines. To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage. Each plan varies by cost and specific drugs covered, but they all must provide at least the standard coverage set by Medicare.
Deciding what coverage works best for you and your situation can take some research and consideration and will depend on your own personal factors. Do your homework and review each plan and its pricing.
Photo 1 by Marcelo Leal
Photo 2 by Hush Naidoo Jade Photography
Photo 3 by freestocks