Published on November 11th, 2021
As you approach your planned retirement date, there are many things you have to consider, from planning your retirement budget to deciding how you want to spend the next chapter in your life.
But probably one of the most pressing concerns that people have at this stage of their life is choosing the right health-insurance. For a lot of soon-to-be retirees, Medicare is the one thing that gives them trouble when they try to plan their future.
Medicare can indeed be confusing and complicated, especially if you’ve never taken the time to learn all the ins and the outs of the system.
However, if you want to walk into retirement without a care in the world and make the most of your senior years, you should have this part of the plan figured out.
If you’re still struggling to understand Medicare and decide which plan you should opt for, it’s time to shed some light on this topic. So, here are 8 things you should know about Medicare before you enroll.
What Is Medicare?
Medicare is a national program in the US that provides healthcare coverage for people over 65 or for individuals with disabilities or certain health conditions.
This program was introduced in 1965, but even if it’s been around for decades already, due to its various options and rules, there are very few people who could call themselves experts on Medicare.
It’s important to clarify that Medicare and Medicaid are two different things since people often confuse them due to the name similarity. Medicaid is another government health insurance program, but unlike Medicare, it only covers people with low incomes.
Once you turn 65, Medicare is going to be your primary health insurance provider, even if you don’t apply for it. All other insurance plans that you might already have will be considered secondary.
You Should Start The Application Process Early
Although Medicare benefits only begin when you turn 65, it’s a good idea to sign up for Medicare early on. The Initial Enrollment Period (IEP) when you can apply for Medicare starts three months before your 65 birthday and ends four months after.
It is generally recommended to start the enrollment process in the three months period prior to your birthday. Late enrollment could lead to penalties, so it’s a good idea to familiarize yourself with the program in due time and apply when the IEP starts.
There are different parts to your Medicare plan
Applying for Medicare isn’t like applying for other types of insurance, where you just choose a policy and you call it a day. There are different parts to Medicare that you have to be aware of, as follows:
- Part A and Part B (Original Medicare)
- Medicare Part C (also known as Medicare Advantage)
- Medicare Part D (prescription drug plans)
While Medicare part A and B cover hospital care, doctor’s visits, and outpatient medical care, Medicare part C offers an alternative route which implies getting coverage through private insurance companies.
Each of these options come with their pros and cons, so you have to study them thoroughly to understand what they offer.
You Have To Choose Your Plan Wisely
Questions such as is Medicare Advantage good or how do I know what Medicare coverage is right for me are some of the most common things people ask when the time comes to apply for Medicare. The truth is, the answer to these questions differs depending on who’s asking.
Since different people have different health needs, there isn’t a one-size-fits-all Medicare plan for everyone.
For some people, Original Medicare might be better than getting Medicare Advantage, while for others it might be the other way around. You have to assess your specific requirements and circumstances in order to determine which plan works best for you.
It Comes At A Cost
Before you decide on a plan, you must know that Medicare will not cover all your healthcare expenses. Depending on which plan you choose, you also have to take monthly premiums, deductibles, or coinsurance into account.
You won’t have to pay a premium for part A if you’ve paid Medicare taxes for at least 10 years. Premiums for Medicare part B started at $144.60 per month in 2020, but costs vary based on revenue.
Part D can also come with monthly premiums, depending on the plan you choose.
You Can Cover The Gaps With A Medigap Plan
After reviewing all your options, you might realize that none of the plans can cover all your health care requirements. In this case, you can opt for a Medicare Supplement Plan, or Medigap policy to do just what the name implies, fill in the gaps in your Medicare plan.
Medigap policies can pay for out-of-pocket costs such as coinsurance, co-payments, and deductibles. Make sure you take this option into consideration during your Initial Enrollment Period, as you could be charged higher premiums or be denied the possibility to buy extra coverage afterward.
You Can Get Support With Medicare
As you’ve probably realized by now, the Medicare program is quite complex and it can take a while for people to learn all the ins and the outs on their own. And even if they do, there’s still the risk of misunderstanding certain aspects which can lead to making the wrong decision.
The easy solution to these problems is to get support from a qualified counselor. Every state has a State Health Insurance Assistance Program (SHIP) where qualified professionals can provide all the information and explanations you require on the topic.
You Can Make Changes To Your Medicare Coverage
Not happy with the Medicare plan you’ve chosen? Not a problem. You can make changes to your Medicare coverage each year during the Medicare Annual Open Enrollment Period, also called the Annual Election Period (AEP), which lasts from October 15th to December 7th.
Even if you were initially satisfied with your Medicare plan, it’s still a good idea to review it every year to make sure it still meets your needs.