Just Turned 65?

Unless you already qualified due to a long-term disability, turning 65 means that you qualified for Medicare. You may have received your Medicare ID card in the mail a few months before you even celebrated your birthday. If Medicare is new to you, you should consider your options during your Initial Enrollment Period. Let’s go through some Medicare enrollment information so can choose the Medicare plan that’s right for you.

Initial Enrollment Period

Your Initial Enrollment Period is a 7-month period that begins three months before you turn 65, includes the month of your 65th birthday, and ends three months after your birthday. You have options when choosing Medicare. During this time, you can choose to get your Part A and Part B benefits through Original Medicare or from a Medicare Advantage (MA) plan. While Original Medicare is administered by the federal government, MA plans are offered by private companies who contract with Medicare to provide your Part A and Part B benefits. Even though Medicare Advantage plans are required to include the same coverage as Original Medicare Parts A and B, most plans include additional benefits.

Let’s consider the basics of Medicare coverage and discuss the options that may be available in your area.

Breaking down the parts of Medicare

Most people enroll in Medicare Part A (hospital insurance) when they turn 65 because if you paid into Medicare taxes for 40 quarters while working, you’ll get premium-free Part A benefits. If you haven’t earned premium-free Part A, you may be able to buy it. Many people choose to enroll in Part B (medical insurance) and Part D prescription drug coverage when they are first eligible in order to avoid late enrollment penalties if they decide to sign up later.

Medicare Part B, Part C, and Part D are all optional, but understanding how these benefits work may help you determine which plan will meet your needs.

Most people enroll in Part B (medical insurance) when they are first eligible for Medicare unless they have other creditable coverage. Part B is medical insurance and helps cover doctor visits, medically necessary outpatient care, preventive services, mental health care, clinical research, ambulance services, and durable medical equipment.

If you don’t have other creditable drug coverage through a group or employer, and your doctor prescribes medication to treat an illness or injury, your pharmacy costs can add up quickly. Part A and Part B do not include any drug coverage, so you’ll want to consider enrolling in Medicare Part D prescription drug coverage. If you get Part A and Part B through Original Medicare, you can enroll in a stand-alone Prescription Drug Plan. Another option is to enroll in a Medicare Advantage plan that will provide your Part A, Part B, and Part D benefits.

Why choose a Medicare Advantage (Part C) plan?

Part C, or Medicare Advantage (MA), plans are offered by private insurance companies that contract with Medicare to provide your Part A and Part B benefits. Many MA plans include additional benefits, such as prescription drug coverage, vision and dental care, hearing exams, and fitness programs, among others. Many people choose to enroll in an MA plan because of the convenience of having all of your insurance needs met in one package.

Once you’re enrolled in Part A and Part B, you can choose to enroll in a Medicare Advantage plan. MA plans can vary in costs and coverage, so it’s important to compare plans before enrolling.

Costs of Medicare

If you paid taxes while working for 40 quarters, you likely will get Part A premium-free. If you have to pay for Part A, you may pay up to $499 each month in 2022. You will also have to pay a deductible before your insurance kicks in. The Part A deductible in 2022 is $1,556 for each benefit period.

Part B usually requires a monthly premium, unless you qualify for both Medicare and Medicaid. The standard monthly premium for Part B is $170 in 2022,  but could be higher based on your income. If you don’t enroll when you are first eligible, you may have to pay a penalty when you decide to enroll later on. This penalty make your Part B premium go up 10% for each 12 month period that you could have had it, but didn’t enroll. 

If you enroll in Original Medicare and enroll in a stand-alone Part D Prescription Drug Plan (PDP), you will likely pay a premium for your Part D coverage. Since PDPs are offered by private insurance companies, premiums and the costs of drugs may vary among plans.

How can you lower your Medicare costs?

Many Original Medicare recipients choose to purchase a Medicare Supplement, or Medigap, policy. Medigap policies help cover some of the costs of care and supplies that Original Medicare does not, such as coinsurance, copayments, and even medical care you require while traveling outside of the country.  In order to have a guaranteed issue right to buy any Medigap policy sold in your state, you’ll want to buy a policy during your Medigap Open Enrollment Period. This 6-month period starts when you turn 65 and are enrolled in Part B. When this period ends, you may be subject to medical underwriting and can be charged more or refused coverage based on pre-existing conditions.

Medicare Advantage plans are an alternative to Original Medicare, offered by private insurance companies. MA plans are required to provide your Part A and Part B coverage, but most plans include additional benefits at little to no extra cost. Additional benefits vary, but may include dental and vision care, hearing exam and hearing aid coverage, fitness memberships, prescription drug coverage, or more. MA plans also offer an added layer of financial protection with an annual out-of-pocket maximum limit. Once you have paid a certain amount for medical care and services, you will not pay anything for the remainder of the year. During your Initial Enrollment Period (or an enrollment period during the year), you may want to compare MA plans available in your area.

With so many options available to you when you turn 65, take time to compare plans offered in your area. Online comparison tools can help you narrow down your choices and if you have additional questions, a licensed sales agent may be able to help you search, compare and enroll.

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