Navigating Medicare can be overwhelming. Who is eligible? When do you enroll? What are all the “parts” of Medicare, and which parts do you need?
The Wandacare Team is here to help you understand all the ins and outs of Medicare so you can make informed choices about the right plan for you. We’re breaking it all down in this comprehensive guide.
What Is Medicare and How Does It Work?
Medicare is a federal health insurance program administered by the Centers for Medicare and Medicaid Services (CMS), part of the U.S. Department of Health and Human Services (HHS). It is designed to provide medical coverage to individuals that are aged 65 and older, as well as to those with certain disabilities.
Basic or Original Medicare has two parts: Part A covering hospital insurance and Part B covering medical insurance. You then have the option to sign up for additional “parts,” such as coverage for prescription drugs, vision, and dental through private insurers with plans supplemented by Medicare.
Similar to private health insurance, you receive a Medicare card to present at your doctor’s visit. Medicare will pay a set amount for covered services, and you will be responsible for any deductibles, copayments, or coinsurance in a cost-sharing, fee-for-service structure.
With Original Medicare, this is an 80/20 split, with Medicare covering 80% and you responsible for the remaining 20%. Medicare doesn’t have “plans” covering couples and families. Coverage is on an individual basis, with each person enrolling for their Medicare “parts” that cover different aspects of healthcare services.
It’s these various parts, options, and their coverage that can be complex/challenging to navigate. But these “parts” are also what make Medicare so flexible and customizable, allowing you to craft healthcare coverage that meets your requirements based on your health needs, budget, and desired coverage.
Let’ts take a look at the parts of Medicare, what they cover, and how they work together for you.
Medicare Part A: Hospital Insurance Coverage
Medicare Part A covers inpatient hospitalization care, including hospital admittance, skilled nursing facility care, hospice care, and some home health care services. You can find the complete list of what Medicare Part A covers on the Centers for Medicare and Medicaid Services site, Medicare.gov.
Hospitalization and in-patient care costs can quickly add up, being some of the most expensive forms of healthcare. Luckily, most people do not have to pay a premium for Part A coverage, as they’ve already paid for it through Medicare payroll taxes during their working years. Anyone who worked and paid Medicare tax for ten or more years qualifies for premium-free Part A coverage. If you’re already collecting Social Security disability benefits, you’re automatically covered by Part A.
In short, you’ve earned your coverage. However, Part A coverage does come with an inpatient hospital deductible you are responsible for. For 2023, that deductible is $1,600.
Medicare Part B: Medical Insurance Coverage
Part B is the medical insurance component of Medicare and covers typical healthcare services, including preventive care and screenings, doctor visits, lab work, outpatient and ambulatory services, and durable medical equipment. It also covers some in-patient services that Part A doesn’t cover, such as some home health care, physical and occupational therapists, and mental health services (inpatient and outpatient), as well as partial hospitalization. You can find the complete list of what Medicare Part B covers on the Centers for Medicare and Medicaid Services site, Medicare.gov.
The majority of people will pay some form of monthly premium on Medicare Part B, with Medicare paying 80% of healthcare costs and you paying 20% The Part B premium, deductible, and coinsurance rates are set annually, based on income according to the Social Security Act. For 2023, the monthly premium is $164.90, with the annual deductible being $226.
While Medicare premium and deductible rates are lower than many traditional health insurance plans (even some employer-provided plans), there are still out-of-pocket costs. This is where a Medicare Supplement plan, or Medigap, comes in. These plans from private insurance companies are designed to work with Original Medicare, filling in the “gaps” or costs that Medicare Parts A and B do not cover, such as deductibles, copayments, and coinsurance. They can provide that extra security in covering surprise expenses, especially for seniors on fixed incomes.
There also may be additional health benefits you’re looking for—dental, vision, and prescription drug coverage. That’s where the additional “parts” of Medicare come in.
Original Medicare vs. Medicare Advantage: Deciding Between Options
Original Medicare is the government-funded and managed insurance that provides the hospitalization and medical coverage of Parts A and B. Medicare Advantage Plans, also known as Medicare Part C, are offered and managed by private insurance companies approved by Medicare. Essentially Medicare pays the insurance company to cover your Medicare benefits and your healthcare services are coordinated through the Medicare Advantage Plan.
Medicare Advantage Plans provide Part A and B coverage, but usually also include prescription drug coverage (Medicare Part D), as well as additional benefits like dental and vision plans, and wellness and fitness programs. Beyond the Medicare Part B premium, these Medicare Advantage Plans all have various premiums, based on the coverage and features of your plan and may have different cost-sharing requirements.
Medicare Advantage Plans provide more options and choice of structures, similar to private health insurance plans. You can choose from HMOs, PPOs, those with health savings accounts (HSA), or even those similar to Original Medicare with a “fee-for-service” structure. These plans often have a set network of providers you choose from, whereas with Original Medicare you can go to any hospital, doctor, or provider within the U.S. who accepts Medicare.
One of the main draws of Medicare Advantage Plans is that they include Medicare Part D Prescription Drug Coverage. All Medicare Part D plans are offered by private insurance companies and supplemented by Medicare. It is not included in the federal program, so even If you choose Original Medicare, you’ll still be paying a monthly premium to a private insurer if you want Part D prescription drug coverage.
In deciding between Original Medicare or a Medicare Advantage Plan, consider the type of coverage you want, the costs and your budget, and the level of flexibility and benefit choices (Medicare Advantage gives you more), so you can select the Medicare option that best meets your healthcare needs.
Eligibility for Medicare: Are You Qualified?
Now that you understand Medicare and all its different parts and options, when are you eligible to take advantage of it?
Medicare eligibility falls into two categories, based on age or medical conditions/disability.
Age-Based Eligibility
The majority of Medicare recipients are eligible based on their age. Individuals aged 65 and older are eligible for Medicare. Once you turn 65, you can take advantage of Medicare benefits by enrolling during your Initial Enrollment Period, which begins three months before your 65th birthday month, includes your birthday month, and continues for three months after your birthday month.
Medical Disability Eligibility
People under the age of 65 can qualify for Medicare if they are receiving disability benefits, either from Social Security Disability Insurance (SSDI) or Railroad Retirement Board (RRB). Individuals must be receiving these disability benefits for a minimum of 24 months to be eligible. Then, they are automatically eligible to enroll in Original Medicare Parts A and B. Additionally, those with End-Stage Renal Disease (permanent kidney failure) or ALS (Lou Gehrig’s Disease) are eligible for Medicare as soon as they start receiving disability benefits, or if they are the spouse or dependent child of an individual eligible for disability benefits.
Anyone eligible for Original Medicare Parts A and B is also eligible for the optional Medicare Advantage (Part C) and Part D prescription drug coverage. Those with Medical Disability-Based Eligibility can choose from select Medicare Advantage Plans, called a “Special Needs Plan,” which tailor plan benefits based on the medical disability or condition.
To determine your eligibility for Medicare, check your birthdate to know when you’ll be eligible to enroll, and/or verify your disability status with the Social Security Administration. You can learn more about disability status with Medicare benefits here.
Enrolling in Medicare: When and How?
You know all the parts of Medicare. You know if you’re eligible. Now, it’s time to enroll in Medicare. But when and how do you do that? When to enroll in Medicare depends on your individual circumstances. It’s not strictly a “turn 65 and enroll in Medicare” scenario. You have several opportunities and several Medicare enrollment periods to keep in mind. Here’s how to enroll and when to do it:
Initial Enrollment Period
Your Initial Enrollment Period (IEP) begins three months before your 65th birthday, includes your birthday month, and continues for three months after your birthday month. If you are receiving disability benefits or are already receiving Social Security or Railroad Retirement Board benefits when you turn 65, you will be automatically enrolled in Original Medicare Parts A and B.
You’ll complete your initial enrollment for Medicare through the Social Security Administration (SSA). This is to verify your eligibility. You can enroll in person at your local SSA office, on the phone with the SSA’s toll-free number, or sign up online through the SSA website.
During your IEP, you’ll choose to either enroll in Original Medicare Part A and Part B or a Medicare Advantage Plan (Part C). If you choose Original Medicare, you can also elect to add prescription drug coverage (Part D) and supplemental Medigap coverage. Your Medigap Open Enrollment Period begins the month you turn 65 and lasts for six months.
General Enrollment Period
You have seven months total for your Initial Enrollment Period. However, if you miss your IEP you can enroll during the Medicare General Enrollment Period (GEP), which runs from January 1 to March 31 every year. However, your coverage won’t take effect until July 1, and you may incur late enrollment penalties of 10% on each part if you do not qualify for a Special Enrollment Period.
Special Enrollment Period
Perhaps you’re elected not to enroll during your IEP because you’re still covered by your employer’s healthcare plan, or you’re on your spouse’s plan. When that coverage ends, you’ll be able to enroll for Medicare during a Special Enrollment Period (SEP). You typically have eight months from the time your other coverage ends to enroll in Medicare without facing late enrollment penalties.
The SEP also applies to current Medicare enrollees (Original Medicare and Medicare Advantage) who need to drop or change their plan coverage due to certain events, such as moving out of your plan’s service area, international relocation, or having to move to a long-term care facility.
Annual Enrollment Period
The Medicare Annual Enrollment Period (AEP), also known as the Medicare Open Enrollment Period, is when individuals already enrolled in Medicare can make changes to their coverage and plans. The Annual Enrollment Period runs from October 15 to December 7 every year and applies to everyone enrolled in Original Medicare (Parts A and B), Medicare Advantage Plans (Part C), and Medicare Part D prescription drug plans.
AEP is your opportunity to make any plan changes or adjustments based on your healthcare needs and budget, including switching plans (between Original Medicare and Medicare Advantage or from one Medicare Advantage Plan to another) and adding any “parts” you may be eligible for. Any changes you make during AEP go into effect on January 1 of the following year.
Medicare Advantage Open Enrollment Period
If you enroll in a Medicare Advantage Plan, you’ll actually have two opportunities to make changes to your plan coverage: the Medicare Annual Enrollment Period and the Medicare Advantage Open Enrollment Period.
The Medicare Advantage Open Enrollment Period runs from January 1 through March 31 every year (the same timeframe as the Medicare General Enrollment). This period gives those with Medicare Advantage plans one additional opportunity to switch to a different Medicare Advantage Plan or move from Medicare Advantage to Original Medicare, along with the ability to enroll for prescription drug coverage (Part D). Any changes then take effect the first day of the following month.
This is a one-time, either or choice, so if you have a Medicare Advantage Plan, don’t wait until the Medicare Advantage Open Enrollment Period to review your plan and think about changes. You’ll want to do that during Medicare Annual Enrollment when you have the opportunity to make as many changes as you want.
Maximizing Medicare: Tips for Optimal Coverage
When it comes to getting the most out of your Medicare coverage, you want to be sure you have a plan that is meeting your needs. In turn, you also need to be sure you’re getting (and using) what you’re paying for. Here are some tips to help you maximize your Medicare plan so you get the optimal coverage:
Assess Your Healthcare Needs
Evaluating your current healthcare needs and thinking about what you may need in the future will lead you to a plan that meets both. Consider factors like current prescription drugs you’re taking, how frequently you go to the doctor, and any lifestyle changes you anticipate (relocation, travel plans, etc.). This will help you choose a plan that aligns with both your wants and needs, now and for the future.
Choose the Right Medicare Plan
Knowing your healthcare needs is one of the surest ways to ensure you choose the right Medicare plan. Be sure you understand how all the Medicare “parts” can work to meet those needs and your healthy goals. Compare the various plans and parts, and if you opt for a Medicare Advantage plan, compare the multiple plans available in your area and what they offer. Look at premiums, deductibles, copayments, network providers, and additional benefits like dental, vision, and fitness programs, to be sure you’re getting the best coverage for you, at the best price.
Consider Medigap Policies and Cost Savings Programs
If looking for the best priced plan leaves you in a state of sticker shock, look to programs that can help you save. Seniors on a set or limited income can qualify for assistance programs, like Medicaid and Medicare Savings Programs that help cover premiums and other healthcare costs. If you choose Original Medicare for your coverage, consider a Medicare Supplement Plan (Medigap) that can help you save on future, out-of-pocket costs like deductibles and copayments. Be sure to compare the different Medigap plans offered in your area, so you get the coverage you need.
Don’t Skip Preventive Care
Get the most out of your plan by using the preventative services it offers. Most preventative screenings, vaccinations, and wellness visits are covered at no cost to you. Taking full advantage of preventative care can also help catch health issues early, so you stay healthy, saving on costs and promoting your quality of life.
Use All of Your Plan Benefits
Many Medicare Advantage Plans include benefits like gym memberships, vision or dental coverage, and transportation services to and from medical appointments. Just like using your preventative services, these additional benefits can go a long way in maintaining your health and saving on costs. Plus, these additional plan benefits often come at an additional cost, so be sure you’re using them if you’re paying for them!
Review Your Coverage Annually
Reviewing your plan coverage and assessing your benefits will help you determine if you’re getting the most out of your plan. If you find that you’re not using all your plan’s benefits, you may want to consider making changes during the Medicare Annual Enrollment Period (October 15 to December 7). This is the ideal time to not only review your current Medicare plan, but also to think about your healthcare needs for the coming year and compare the plans available to you.
Consult with a Medicare Expert
Navigating the parts and plans of Medicare can be overwhelming. A Medicare counselor or insurance agent who specializes in Medicare can help you through the process, helping determine your eligibility, walking you through Medicare enrollment, and doing the research of plan comparison to ensure you find the best plan for your needs.
The Wandacare Team can help you with all these aspects of Medicare, and so much more! You don’t have to embark on your Medicare journey alone. Our licensed Florida agents are here to help you every step of the way.
Contact us to get started today!
