You've heard of Medicare, and maybe you even have the coverage already. However, understanding how it all works can be confusing. The plan covers many of your medical expenses, but it doesn't cover everything. Learn more about Medicare to ensure you get the coverage you need to manage your changing health care needs as you age.
Medicare is the federal health insurance program designed mainly for older adults. Original Medicare offers fairly standard coverage that helps share the costs of many medical expenses. You also have optional plans you can choose from that may help cover additional medical expenses.
You generally qualify for Medicare when you turn 65. You have a small window for enrolling around your birthday. Enrolling outside that window could result in penalties and higher premiums. You can also get Medicare if you've qualified for Social Security benefits for 24 months, even if you haven't reached age 65. People with a disability, end-stage renal disease or ALS may qualify for Medicare.
Medicare options include Parts A, B, C and D. Some of the coverages are optional.
Original Medicare includes Parts A and B. Part A offers hospital coverage. This includes things like inpatient hospital stays, hospice care, skilled nursing facility stays up to 100 days and home health care.
Most people don't pay a premium for Part A. You may have to pay either $278 or $506 monthly if you or your spouse didn't pay Medicare taxes long enough to qualify for premium-free coverage. The deductible you'll pay is $1,600 per benefit period, which starts when you're admitted to the hospital and ends when you've had no inpatient care for 60 days. If you stay in the hospital longer than 60 days, you'll have daily co-payments for your care.
Part B is more like traditional medical insurance. It covers things like regular doctor's visits, preventive care and outpatient procedures. This coverage can also help you with durable medical equipment like wheelchairs, hospital beds and walkers.
The monthly premium as of 2023 is $164.90, but it could be higher based on your income. You'll also pay a $226 yearly deductible before the plan starts covering your medical expenses. This part also typically has a 20% coinsurance, which means you're responsible for 20% of your medical expenses after you reach your deductible.
Part D is an optional drug coverage that you can add on to Original Medicare, or Parts A and B. This option comes from private insurance companies, but they must follow Medicare rules. A Part D plan shares some of the costs of your prescription medications. The premium amounts vary by plan.
Part C is another name for Medicare Advantage. It bundles Parts A, B and D into one plan run by a private insurance company. These plans vary in their coverage, but they often cover things that Original Medicare doesn't include, such as hearing and vision services.
However, these plans might have different restrictions than Original Medicare. For instance, you might have limited options for in-network providers. Review all the coverage and restrictions if you're considering a Medicare Advantage plan instead of Original Medicare to ensure you know what it covers.
If you go with Original Medicare coverage, you can add a supplemental plan, such as Medigap, to help cover your out-of-pocket expenses. This coverage starts paying after Medicare pays its portion of your bills. There are different Medigap plans that pay for different things, such as your coinsurance for Part B coverage and your deductibles for Part A and B. Choosing a Medigap plan can help you stretch your budget, especially if you have lots of medical needs. Review what the plan covers to choose the best option if you want supplemental insurance.
You have a total of 7 months to enroll in Medicare without penalties. You can initiate enrollment in Medicare 3 months before your birth month in the year you turn 65. The initial enrollment period lasts until 3 months after your birth month that year. Your coverage starts the month after you enroll in Medicare.
You can still enroll for Medicare coverage outside this initial enrollment period. However, missing this window results in a penalty that remains on your Medicare premiums for the rest of your life. In other words, if you don't sign up during your initial eligibility period, you'll always pay more for the coverage.
The general enrollment period opens from January 1 to March 31 every year. You can enroll during this time if you missed your initial period. You might also qualify for a special enrollment period. For example, if you're currently covered by a group health plan through an employer, you can enroll in Medicare during a special enrollment period that lasts for 8 months starting when the employment ends or the group health insurance coverage ends.
Knowing when you can enroll helps you get the coverage you need. It also helps you pay the lowest possible premiums by avoiding penalties.