Medicare is a Government provided service that is available for citizens over the age of 65 or those with terminal, late-stage illnesses. Medicare is broken down into several parts with each part serving a single purpose and whether insureds have to pay for the service varies from person to person. Original Medicare is made up of Parts A and B but an insured can add additional parts as they see fit.
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How Does Medicare Work After Retirement?
According to the US Government’s Medicare website, a retiree becomes eligible for Medicare once they reach 65 years old. Those that don’t enroll as soon as they’re eligible can incur financial penalties that will apply to their monthly payments as soon as they enroll.
Medicare Part A covers:
- Inpatient hospital care: as long as the hospital accepts Medicare and as long as the insured was admitted with a doctor’s orders.
- Skilled nursing facility care: short-term care and can only be utilized in conjunction with a doctor’s orders.
- Hospice care: only covered if an insured’s regular doctor and their hospice doctor agree that the insured is terminal if the insured accepts comfort care instead of care to cure their illness, and as long as they sign a waiver accepting comfort treatment instead of Medicare-covered treatments for the illness.
- Home health care: covers things like physical therapy, occupational therapy, speech-language pathology services, and other medical social services.
Medicare Part B covers regular outpatient services. This includes medically necessary services and preventative services like doctor’s visits, health screenings, and yearly wellness checks. It also covers clinical research, ambulance services, durable medical equipment, mental health services including outpatient and partial hospitalization, and limited prescription drugs. The drugs covered under Part B are usually ones that patients don’t give to themselves, like injectable osteoporosis medications or other medications infused through durable medical equipment.
Part C plans are also called Medicare Advantage plans and are considered the package that combines Parts A, B, and D. This Part operates more like traditional medical insurance with options for HMO and PPO and will cover things like fitness, dental, vision, and hearing, which aren’t covered in Original Medicare. This Part will also cover prescription costs depending on which plan the patient chooses. Please note that Part C and Medigap don’t work together.
Part D is the drug coverage part of Medicare and is an included part of the Medicare Advantage plans. There are several plans within this part and each plan has its own list of covered drugs. While different plans may cover different drugs, all of the plans are required to cover at least 2 drugs from most categories. All Part D plans must cover all of the drugs in the following 6 categories: HIV/AIDS treatments, antidepressants, anticonvulsive treatments for seizure disorders, immunosuppressants, and anticancer drugs not covered under Part B.
This part of Medicare was designed to work in conjunction with Original Medicare to fill the financial gaps that these coverages can leave. Medigap coverage can cover deductibles, coinsurance, or copays plus it can extend to cover medical care while traveling abroad and other things that Original Medicare doesn’t cover. Something to keep in mind is that Medigap can’t be purchased if an insured already has Medicare Part C.
Will I Have To Pay For Medicare After Retirement?
Whether insureds will have to pay for Medicare coverage after retirement depends on several factors: how long they paid into the Medicare system while they were working, what their gross income is on their yearly taxes, and which parts they select to make up their coverage. As long as they’ve contributed to the Medicare system for at least 10 years while they were working, insureds can generally receive Medicare Part A coverage for free. These services are subject to meeting the deductible for the benefit period, which is $1556 for this part according to the Medicare website, and a coinsurance payment that is applied after 60 days of inpatient services.
The official Medicare website notes that the deductible for Medicare Part B is $233 for the policy term and the patient is responsible for 20% of all of the services rendered under this part. Additionally, the monthly payment for this part is as low as $170 per month according to the Medicare website, and goes up according to the patient’s gross income on their tax filings. All other medicare options are a la carte and carry their own fees to be added to an insured’s plan.
Enrolling In Medicare
Some insureds are automatically enrolled in Medicare Parts A and B as soon as they turn 65 while others will have to enroll themselves as soon as they’re eligible. Those insureds that are collecting social security benefits for at least 4 months before their 65th birthday will be automatically enrolled. Those that won’t be enrolled in the program automatically will have a 7-month window to enroll, which includes the 3 months before their birthday month, their birthday month, and the 3 months after their birthday month. If the retiree doesn’t enroll during that enrollment period, it can cause their premium to permanently increase for the rest of their lives once they do enroll in the program.
An insured will qualify for a special enrollment period if they’re still covered under a spouse’s employee health insurance after they turn 65. If that’s the case, then they have a window of 8 months after their spouse stops working to sign up for Medicare without penalty. Insured can sign up online, over the phone, or in person at a local social security office. Learn more about Medicare by visiting the official website.