If you’re turning 65 soon then you will likely be embarking on a crash course of trying to figure out the ins and outs of Medicare. If you can understand these 5 items before you start Medicare you will be in much better shape than most…
1. Throw away all that junk mail and ignore all those calls. When you are about 6 months away from your 65th birth month you will notice that your mailbox can hardly hold the amount of literature you are receiving from every carrier and agent on the planet. You will also notice that your phone is ringing constantly with solicitations. You can ignore all this stuff. At this point the two main pieces of literature that you need to fully understand Medicare and your coverage options are:
Both of these are published by the Centers for Medicare and Medicaid Services so you won’t be “sold” anything. Familiarize yourself with both of these booklets and you will be 90% more informed than all your friends and family that are already on Medicare.
2. When should you enroll in Part B?
If you are already receiving Social Security benefits you will automatically be enrolled in Medicare Part A and B on the 1st of the month you turn 65 (if your birthday is on the 1st you will be enrolled on the 1st of the month prior to your 65th birth month).
If you are not receiving Social Security you will need to enroll in Part A and B. There is a 7 month period for you to enroll (3 months before, month of, and 3 months after you turn 65. You can enroll online at Social Security’s website here.
If you are continuing to work past the age of 65 and have coverage through this employer you may want to opt out of Part B since this coverage has a monthly cost. You can find detailed information about this in the Medicare and You book linked above.
3. Medicare Advantage vs Medicare Supplements…They’re like apples and oranges grapefruit!
Many people confuse Medicare Advantage plans with a Medicare Supplement plan. The two options couldn’t be more different.Medicare Advantage plans are managed health plans (like a PPO or HMO) that replaces your Medicare Part A and B. Now your insurance carrier is managing your Medicare for you and you have to pay/play by their rules. Some have very high out of pocket exposure and limited doctor networks. Each carriers plans and networks are different.
So if you are thinking of going this route (not our preferred choice) then you must make sure that you understand the pros and cons of the plan you are enrolling in.
Medicare Supplement, aka Medigap, plans simply covers the “gaps” that Medicare Part A and B doesn’t cover (like copays and deductibles). Medigap plans allow you to have all the freedom of Original Medicare (Part A and Part B), allows you to budget your health care costs, and freedom of choice for your doctors and hospitals (not limited by a network).To see a side by side comparison of these plans you can reference this Medicare Advantage vs Medicare Supplement page.
4. Standardization, making sense of all the plan offers.
One of the main points to take away from point #3 is that Medicare Supplement plans are Standardized and Medicare Advantage plans are NOT. What does this mean?
All Medigap plans (plans A – N) must cover the exact same benefits determined by Medicare regardless of carrier or price. Therefore, Plan G with carrier ABC is the exact same as Plan G with carrier XYZ. It’s like going to two grocery stores for a box of Cheerios. The prices will be different between the two grocery stores, but you are still buying the same box of Cheerios.
Medicare Advantage plans must only cover the basic benefits of Medicare but how they collect on those benefits will be drastically different between each carrier, because they are NOT standardized. Copays, out of pocket maximums, prescriptions, and networks will be very different from each carrier. Expect these benefits to change each year depending on how Congress funds them.
5. Prescription drugs can be very expensive.
Prescription drugs for many seniors will be their largest expense while on Medicare. All Part D drug plans are not created equal. Yes, they all must cover the basics of what Medicare says they must cover but how they cover these are very different with each one. Many people will simply buy their Part D coverage from their pharmacy (have you seen those signs at your pharmacy?) or from an ad they saw on TV. This is NOT how you should choose which plan is right for you.
There are over 30 options available in most areas. To make sure that you are paying the lowest premium that covers all your medicines, the best step you take is make a list of all your prescription drugs and call 1-800-MEDICARE and let them tell you which plan is best for you for that year. This will give you an unbiased opinion (with over 30 options available most agents only represent 1-5 of these carriers…don’t let them push you into one that isn’t right for you). Since plans change and your medications change yearly you need to do this every year during your annual enrollment period (Oct 15 – Dec 7) which is the only time you can make changes to your Part D plan.
If you would like more guidance on navigating Medicare, contact us through the button below. We will make this process smooth and simple for you.