Medicare is a government health insurance program for persons 65 and older. There are several different types of Medicare Programs to navigate. If you are 65, you may apply up to three months in advance of the first day of the month you turn 65 or up to three months after the month you turn 65. You can sign up at a Social Security office or online here.
The online sign-up is very easy but you can only use this feature if you are not electing to receive social security payment at the same time. There are special times to enroll in Medicare other than when you turn 65, i.e. when you retire from a job after the age of 65 or if you are disabled under age 65.
What are the different parts of Medicare?
Medicare A: The program that pays for hospital stays and hospital-based services. This is usually premium-free if you’ve paid into FICA while working, if you did not qualify for FICA, you may purchase Part A for $425/month. There is a deductible for each hospital inpatient stay and copays for nursing home stays.
Medicare Part B: The program that pays for everything but the hospital, including doctor visits and outpatient treatment. It is divided into Medically Necessary Services (doctors visits, lab and X-Ray tests and durable medical equipment) and Preventive Services (flu testing and other screening tests). Everyone pays a premium for Medicare Part B (there are programs through Medicaid that help those who cannot afford the premium). The premium is means tested and based on your adjusted gross income from your tax returns. The premium ranges from $104.90 per month to $335.70 per month. There is also a deductible of $147/year.
Medicare Supplemental Plans (aka Medigap): These are plans offered by private insurance companies to match with the deductibles/out of pocket amounts remaining after Medicare has paid. These are available at many price ranges but all plans have the same benefits, just are priced differently. The most popular plan is Plan F which matches well with Medicare and pays all the Medicare deductibles. The cost is about $110/month for The F Plan. You sign up for this type of plan at the same time as you enroll in Medicare.
Medicare Part C (aka Medicare Advantage): Medicare Part C is an option to enroll into both A and B through a private insurance plan that covers both. Many plans also cover drugs (Medicare Part D). These plans can function like HMO or PPOs or can even be fee-for-service, like regular Medicare. Some also have added benefits like vision and eye care. The cost is attractive at about $70/mo (for HMO plans), but the downside is that there are more restrictions on the types of medical professionals and services you can access, and you may need to get pre-approval before you see a specialist. Many times you have to remain in the doctor network that is offered by the Plan, i.e. Kaiser. These plans can also charge deductibles and co-pays. While the monthly cost may be low, there are added copays for actual usage of medical services.
Medicare Savings Account (MSA): You can also opt for a Medicare Savings Account, which is a Medicare Part C/Advantage Plan with high deductibles. You are given a monthly deposit of funds to apply toward Medicare covered services. Deductibles and co-pays still apply, so there are out of pocket costs, and many of the same restrictions that apply to Medicare Part C apply to these plans (ie must used network providers and suppliers)
Medicare Part D (Drug Plan): Medicare now requires everyone on Medicare to have drug coverage. Some people have drug benefits through their Medigap plans or through their Medicare Advantage plan (HMO). Others purchase a Part D plan through a private insurance company. Medicare offers an online tool to review your current drugs and give you options as to the best plan to choose. There are copays for your medications but the drug plans also offer mail order options which can control the monthly costs. The cost of Part D plans ranges from $20-$110/mo.
Contrary to all the news discussion of the Affordable Care Act, Medicare did not change at all. It is important to keep in mind the dates for enrollment and to find a good supplemental plan (Medigap) and a good Part D drug plan. Most of the cost for people on traditional Medicare and Medigap plans are the insurance premiums and the out of pocket drug costs. For those with Medicare Part C (Medicare Advantage) plans, the insurance premiums may be low, but you will still need to pay a deductible and copays within a set network of doctors and providers.
–Jennifer Brokaw, MD Good Medicine and Patty Stone Ortenberg MBA StoneOrt Support Services