Embarking on your journey into Medicare can be both exciting and overwhelming. This is especially true if you’re not familiar with the intricacies of Medicare’s various parts, plans, and enrollment processes. The following guide covers the essential information you need to know as a newcomer to Medicare, so you can make the most of your new healthcare coverage.
Whether you’re about to become eligible for Medicare or you’re helping a loved one navigate this sometimes-complex system, the following tips can help you make confident, informed decisions.
Table of Contents
1. Begin Your Medicare Research Early
While you may begin researching your Medicare options sooner, it’s important to start really diving into the details as soon as you turn 64. This can help you gather the information you need to be prepared when the enrollment period begins.
During the research phase, you may want to review the Medicare website and familiarize yourself with the online tools available. You may also consider consulting with a Medicare professional if you still have questions after doing your own research.
2. Understand Medicare’s Parts and How They Work Together
Medicare coverage consists of four basic parts, which work together in different ways. This includes:
- Medicare Part A: Also known as hospital insurance, Part A covers inpatient hospital stays, skilled nursing facility care, hospice care, and limited home health services. If you or your spouse paid Medicare taxes while working, you may not have to pay a premium for Medicare Part A.
- Medicare Part B: Also known as medical insurance, Part B covers doctor visits, outpatient care, preventive services, and medical supplies. It requires a monthly premium, which is income based, but most insureds will pay the standard premium of $164.90 for 2023.
- Medicare Part C: Also known as a Medicare Advantage plan, Part C combines the benefits of Part A and Part B and often includes prescription drug coverage (Part D) along with additional benefits such as dental, vision, hearing, and fitness programs. Part C is offered by private insurance companies but overseen by the government.
- Medicare Part D: This is Medicare’s drug coverage, which helps lower the cost of prescription medications. Part D may be included in a Medicare Advantage Plan or purchased through standalone prescription drug plans (PDPs).
Together, Medicare Part A and Part B are also known as Original Medicare. Medicare Part C is an alternative to Original Medicare that may also include Part D coverage. Some Medicare Part C plans require a monthly premium, while others do not.
3. Check Your Eligibility and Enrollment Periods
Typically, you’re eligible to enroll in Medicare when you turn 65, although some people may qualify earlier due to disabilities or specific medical conditions. Your Initial Enrollment Period (IEP) begins three months before the month of your 65th birthday, includes your birthday month, and continues for three months after. If you miss the enrollment period, you may be subject to late enrollment penalties and delayed coverage.
If you are receiving Social Security or Railroad Retirement Board benefits when you turn 65, you’re automatically enrolled in Medicare Part A and Part B during the month you turn 65. Otherwise, you may need to visit the Medicare website, call the Medicare helpline, or visit a local Social Security office for assistance with enrolling. During your IEP, you can also make other changes, like enrolling in a Medicare Advantage plan or Part D coverage.
After the IEP has passed, you can take advantage of other Medicare enrollment periods, including Open Enrollment (Jan. 1 through March 31), Annual Enrollment (Oct. 15 through Dec. 7), and Special Enrollment Periods.
4. Review Medicare Advantage vs. Original Medicare
Next, consider the pros and cons of Original Medicare vs. a Medicare Advantage plan to determine which is likely to meet your needs. Original Medicare (Part A and Part B) covers hospital stays and medical services and allows you to see any doctor or healthcare provider that accepts Medicare.
Medicare Advantage plans are mandated to offer at least the same coverage as Original Medicare and often includes Part D coverage and other medical services not covered by Original Medicare, such as vision, dental, hearing, and wellness benefits. There are different types of Medicare Advantage plans, and some may also have a limited network of approved doctors, facilities, and other healthcare providers.
5. Explore Medicare Part D Coverage
Medicare Part D helps reduce out-of-pocket costs for prescription drugs. Many individuals who need to regularly take medications find this coverage helpful. If you’re enrolled in Original Medicare, you can purchase a standalone Part D plan. Otherwise, you may want to choose a Medicare Advantage plan that includes Part D coverage.
When comparing Part D plans, consider the plan’s premiums, copayments, deductibles, and the plan’s covered drugs list, also called a formulary. This can help you choose a plan that offers cost-effective coverage for the medications you need.
6. Consider Whether You Need Medigap (Supplemental) Insurance
While Original Medicare provides essential coverage, it may not cover all healthcare costs. This is where Medigap, also known as Medicare Supplement Insurance, comes into play. Private insurance companies offer Medigap plans, but they are federally standardized and may also be subject to state regulations.
Medigap plans can be added to Original Medicare but cannot be used alongside a Medicare Advantage plan. They help fill the gaps in Original Medicare, covering costs such as deductibles, copayments, and coinsurance. There are many different types of Medigap plans, each providing different coverage levels and out-of-pocket costs. To determine whether a Medigap plan is right for you, weigh each option’s costs and benefits and consider whether they fit your needs and budget.
7. Review important Cost Considerations
Understanding the basic Medicare costs can help you budget for your medical expenses and help you choose an appropriate plan for your needs. Some of the costs to consider include:
- Premiums: the amount you pay for your healthcare coverage, regardless of whether you receive covered services
- Deductibles: The amount you must pay out-of-pocket before your medical benefits kick in
- Copayments: A set dollar amount you must pay for services (e.g., $10 per doctor’s visit)
- Coinsurance: A percentage of your covered services you must pay out of pocket (e.g., 20% of the cost of your covered doctor’s visit)
- Out-of-network fees: An additional charge for using out-of-network providers
- Out-of-pocket maximums: The maximum out-of-pocket amount you’re responsible for each year (applies to Medicare Advantage plans but not to Original Medicare)
8. Review Medicare’s Network and Provider Choices
When you’re covered by Original Medicare, you can see any healthcare provider who accepts Medicare. However, Medicare Advantage plans often have networks of preferred providers who have agreed to provide medical services to plan participants at a discounted rate.
Using out-of-network providers may result in limited coverage and higher out-of-pocket costs, so it’s important to review plan networks before choosing a Medicare Advantage plan.
Check to see if there are a reasonable number of in-network providers within a convenient distance from your home. If you have preferred doctors, facilities, or other healthcare providers, make sure they are also included in the network.
If you choose Original Medicare, you may consider finding a primary care physician who accepts Medicare and can coordinate your care with other specialists as needed. Checking the Medicare Provider Directory or contacting the plan directly can help you locate providers who accept Medicare in your area.
Putting It All Together
As you prepare for your journey into Medicare coverage, many important factors must be considered. Begin your research early and make sure you understand how the different parts of Medicare work together. Explore the pros and cons of Medicare Advantage plans, Medicare Part D, and Medigap coverage. Review the costs involved in each option and consider whether a plan’s network of preferred providers meets your needs. Reviewing these crucial points can help you confidently choose the right Medicare coverage option for you.