Medicare Enrollment – What do I need to know?

If you or someone close to you is nearing age 65, then you are probably trying to figure out Medicare.  Medicare is the national health insurance program in the United States administered by the Centers for Medicare and Medicaid Services. It is health insurance for Americans 65 years and older and younger people with some disability status as determined by the Social Security Administration.

Your initial enrollment period (unless you qualify based on a disability) for Medicare Part A occurs 3 months before you turn 65 and three months following. Each year following between October 15 and December 7 you can change plans for the following year. Signing up for Part B occurs from January-March of each year. There are also penalties if you don’t buy Medicare Part A when you are first eligible. For more information about enrollment, visit this page on the Medicare website.

Medicare Part A premiums are waived if you are 65 or older and a United States Citizen or have been a permanent legal resident for five continuous years, and you or your spouse has paid Medicare taxes for at least 10 years. If you paid Medicare taxes for less than 10 years or 40 quarters there are monthly premiums you need to pay. Medicare Part B costs $148.50 (2021) or higher depending on income. For more information on Medicare costs visit Medicare’s website. There are other costs such as deductibles and co-insurance as well. 

So if you are confused when I use terms like Medicare Part A or B, let me provide you with a brief explanation. 

  • Part A is known as hospital coverage. 
  • Part B is your medical coverage such as visiting your doctor. 
  • Part C is private insurance in place of Part A and B. 
  • Part D is prescription drug coverage. 

The plans are required to offer the same coverage as Medicare Part A & B, but often provide additional coverage. Premiums will vary depending on the coverage provided. Another decision you need to make is whether you want additional coverage if you have Medicare Part A and B. This is often referred to as Medigap coverage. For more information on the various parts visit the Medicare website.

If you are still confused, don’t worry. There are a lot of resources out there for help. Each state also runs a SHIP (State Health Insurance Assistance Program) program. To find a SHIP representative in your state, visit the State Health Insurance Assistance Programs National Network. You can also visit the Medicare website for information.  

University of Maryland Extension in partnership with University of Delaware Cooperative Extension will offer a workshop on October 25, 2021 and November 8, 2021. To register for either workshop, click on the date.

Understanding Medicare

Have you thought about health care in your retirement years? Health insurance in your senior years is something you need to plan for when you stop working a full-time job with benefits. In 2016, the average person with Medicare spent $5,460 out of their own pocket annually (Kaiser Family Foundation). Hospitalizations or medical procedures will cost much more. Most of us don’t think about these issues until we hit that magic number of 65 and are eligible for Medicare. This is the health insurance program for people 65 and older. There are some exceptions to qualify early, but that is not the focus of this article. 

There are four parts to Medicare:

  • Part A – your hospital insurance; 
  • Part B – your medical insurance, which covers outpatient services like your doctor visits and lab work;
  • Part C – Medicare Advantage, which I will explain later in this blog; and
  • Part D –  your prescription drug coverage. 

You have a seven-month window to sign up for Medicare (three months before you turn 65, the month of your birthday and three months after). You should receive something in the mail prior to 65 from the Social Security Administration about Medicare enrollment. If not, I suggest you contact them. For most people, there is no charge for Part A. Part B will have a monthly premium which currently is $144.60 (or higher depending on your income). 

This enrollment period is when you need to make a decision. Do I want traditional Medicare (Parts A and B) or Medicare Advantage (Part C)? Medicare Part C or Medicare Advantage plans are health benefits from a private insurance company that is approved by Medicare. These plans operate like a HMO or PPO. About 34% of Medicare beneficiaries sign up for Part C (Kaiser Family Foundation). You will need to decide what best meets your personal needs. Medicare Part C will cover hospital, medical and sometimes dental and vision services too. Each plan is different so you really need to shop around.

The other aspect you need to consider if you enroll in Parts A and B is a Medigap policy. Because Parts A and B typically cover 80% of the costs of medical care — the Medigap policy fills the financial gap. There are several different types of Medigap policies, so let me direct you to some resources. Medicare has a site (How to compare Medigap policies) that provides a comparison of the different plans. This is the short version. The detailed explanation of Medigap policies is called, Choosing a Medigap Policy.

Finally, you have Part D, your prescription plan. Part D is offered by private insurance companies, so you will have options. In some cases, it is included in your Medicare Advantage plan or your Medigap plan. 

There are exceptions to everything I just shared. For example, if you are still working, you can keep your work insurance.  I want to share with you some resources so you can make the best decisions for your own situation. There is also a program called SHIP (Senior Health Insurance Program).  Your SHIP representative can answer all of your questions about Medicare. 

Additional Resources

Are You Covered? Open Enrollment is Here

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Medical bills and doctor visits can be expensive, but getting covered by health insurance can protect you and your family from the high unexpected costs of treating illnesses, accidents and other unforeseen health problems.

The Health Insurance Marketplace Open Enrollment period to receive coverage or make changes to your existing coverage, is getting close. This year it runs from November 1, 2019, to December 15, 2019.  Concurrently, Medicare Open Enrollment began October 15, 2019, and continues till December 7, 2019. Many employer health plans host an open enrollment period during the same period. 

So what does this mean? That it’s time to think about health insurance and reassess your family’s needs.  

Where can you find assistance?

Each state operates a little differently, therefore it is suggested that you connect with a Navigator or Assistor in that state.  A Navigator or Assistor is someone that specializes in the health field who can help you enroll in a health insurance plan or answer any questions you may have.  Medicare also provides resources if you have questions during the process.  If you have an employer-based plan, contact your Human Resources office for assistance.  

How much will it cost?

The cost of health insurance depends on your income.  Individuals that meet income guidelines can receive tax credits toward health insurance plans on the Marketplace.  A tax credit is money that you receive from the government to assist with paying your health insurance premiums. Premiums are the monthly payments you make to the health insurance company.  

My colleagues at the University of Maryland Extension have several great resources to assist in making health insurance decisions.  Click on any of the following topics for more information.

Choosing Health Insurance Workbook

How to Choose a Doctor

Making a Good Guess on Health Costs

Types of Health Insurance

For a complete list, click here.

Remember that we all need health insurance.  Use it to stay healthy. Routine checkups are an important element in staying healthy and preventing more serious health issues.  In the long run, health insurance will save you money.