6 Things to Not Overlook When First Enrolling in Medicare
So, you’re turning 65 in a few months. First of all, happy early birthday! Along with planning your birthday party, it’s time to start exploring your Medicare options.
That’s because your Initial Enrollment Period (IEP) for
Medicare will likely begin shortly. That’s a seven-month Medicare sign-up
window that includes the three months before, the month of, and the three
months after your 65th birthday.
“Any time someone is approaching age 65, it’s a great idea
for them to talk to a licensed insurance agent,” says Silas Jessup,
HealthMarkets’ contracted licensed insurance agent and executive sales leader
in Indiana. “That’s true even if you’re still employed and plan to stay on your
employer-based insurance.”
Enrolling in Medicare can feel really difficult. Make it
easier on yourself by learning about possible oversights and how to avoid them.
If you know someone on Medicare, they probably have a story or two about how
signing up was not a walk in the park. Here are some potential oversights
to avoid and tips that could help you make the stroll easier.”
Potential
Oversight #1: You don’t know your ABCs… or Ds of Medicare
Medicare is the U.S. government’s national healthcare
program for adults ages 65 and older. (It’s also for individuals with
disabilities, End-Stage Renal Disease (ESRD), or ALS (also called Lou Gehrig’s
disease.).) It’s divided into sections, each of which provides a certain type
of coverage and is identified by a letter:
- Medicare Part A: This is the part of Medicare
everyone gets when they first sign up. You don’t have to pay a premium (or
monthly bill) for it if you’ve been working and paying taxes for at least
10 years. If you do not qualify for premium-free Part A, you can still
sign up for it and pay monthly premiums. Medicare Part A covers services
such as in-patient hospital care, nursing home care, and home health care.
- Medicare Part B: When you sign up for Medicare
Part A, you also have the option to sign up for Part B, which covers
medically necessary and preventive care. These types of health services
include things such as doctor visits, preventive services (flu shots and
vaccines, for example), ambulance services, and mental health services.
You’ll pay a monthly premium for Part B.
- Medicare Part D: This part covers medications
(yes, it’s separate). Medicare Part D will also cost you a monthly
premium.
There’s a third letter of the Medicare alphabet— Medicare
Part C. These plans are also known as Medicare Advantage plans, and they’re
the equivalent of coverage under Medicare parts A and B (also called Original
Medicare). They may also include additional benefits, including coverage for
prescriptions, vision, hearing, dental services, expanded telehealth, and even
fitness. And you get them all in one plan. However, you may need to use the required
networks, much like many employer-offered health plans.
Potential
Oversight #2: You don’t compare your current plan to Medicare
Let’s say you turn 65 and you’re comfortable with the group
health insurance plan that you’re already on through either your employer or
your spouse’s. (Yes, you may still be working at age 65.)
If you still have one of these traditional plans, you don’t
have to switch to Medicare right away. But you might save money if you do.
“Sometimes group insurance is the better option, and other
times Medicare can be a better solution,” says Jessup. “It all depends on your
personal situation, the cost of the group insurance, and the benefits that are
being provided. An insurance agent can help you decipher which coverage would
be better for your individual circumstances.”
Comparing costs on your own can be difficult, Jessup says.
One option can be to call me, your licensed health insurance agent from
HealthMarkets at (605) 868-8330 or
visit GregNinkeAgency.com to
figure out what insurance plans are available to you.
Potential
Oversight #3: You don’t take time to read the fine print
If you stick with Original Medicare, you’ll be getting Part
A (and likely Part B), and that means about 80% of your medical costs will be
covered, says Jessup. That leaves you to pay for the other 20%.
Original Medicare has no out-of-pocket expense limits.
Costs may add up if you end up going to the doctor a lot or if you need an
expensive medical procedure.
Check with me to learn about ways to cover some of the
expenses that Medicare does not.
Potential
Oversight #4: You don’t check the medication lists for Medicare Part D or the
Medicare Advantage plan you’re interested in
If you’re taking multiple prescription medications, you’ll
probably want to add coverage for that—that is, Medicare Part D.
All Medicare Part D plans must cover a wide range of
prescription drugs, including most drugs in “protected classes” like those that
treat cancer or HIV/AIDS. But before you sign up for a plan, you’ll want to
make sure your prescriptions are on your plan’s list of covered drugs, which is
called a formulary (each plan has its own).
Many plans place medications into different levels, called
“tiers,” on their formularies. Drugs in each tier have a different cost,
with lower tier ones usually costing you less than higher tier ones.
So, take some time to learn which of your prescriptions may
be covered and the tiers they fall into. Having that information on hand will
help you determine how much you’ll be spending on prescriptions.
Potential
Oversight #5: You don’t check the out-of-pocket limits on the Medicare
Advantage plan
In general, Medicare Advantage plans usually have a lower
premium, but the out-of-pocket limits can be different from plan to plan says
Jessup.
Out-of-pocket costs can vary, but you won’t have to pay
more than the out-of-pocket limit—the government capped it at $7,550 in 2022.
And many Medicare Advantage plans have out-of-pocket limits below that.
Potential
Oversight #6: You don’t pay attention to the deadlines
Remember: Your Medicare IEP is only seven months. So, depending
on when you sign up during the IEP, you’ll just need to pay attention to
deadlines, based on where your 65th birthday falls.
As we mentioned earlier, you can sign up for Medicare
starting three months before the month of your 65th birthday,
and you have until three months after the month of your 65th birthday
to enroll. Or, if your birthday is on the first of the month, your seven-month
window starts four months before the month you turn 65 and ends two months
after.
In short, your Medicare or Medicare Advantage coverage will
start anywhere from one to three months after you sign up for it.
If you miss your IEP, though, you’ll likely have to pay a
late enrollment fee, which goes up the longer you wait to enroll. For Part B,
for example, it’s 10% of the premium—or your monthly payment—for every 12
months you delay. The standard premium for 2022 is $170.10, but it can change
every year (and your penalty can too). That can really add up.
There’s also a late penalty for Medicare Part D. It’s equal
to 1% of the national base beneficiary premium times the number of months that
you didn’t have Part D or other qualified continuous coverage.
Late enrollment can also mean you’ll have some serious gaps
in coverage. Keep track of your deadlines. They could end up saving you a lot
of money.
Make
no mistake: If you’re on Social Security, life is good
Good news if you’re on Social Security: You don’t have to
worry about signing up. (Yes, you read that right.) If you’ve been receiving
Social Security benefits for at least four months before you turn 65, you’ll be
automatically enrolled in Medicare parts A and B.
You only need to be concerned with your Initial Enrollment
Period if you’d like to choose a Medicare Advantage plan instead of Original
Medicare, or if you’d like to delay enrollment.
Along with the birthday cards you’ll get for turning 65,
you’ll also get a welcome package in the mail plus your Medicare card.
Looking for the Medicare plan to fit your lifestyle? Contact me at (605) 868-8330 or (480) 400-9837. Visit GregNinkeAgency.com to schedule an appointment.
