If you've just started looking into Medicare, you might be confused about the options available to you. Here are a few questions that many older adults have as approach retirement.
How Do I Apply for Original Medicare?
If you or your spouse paid Medicare taxes while you were working and you're receiving Social Security, you will receive a Medicare card in the mail three months before your sixty-fifth birthday and automatically be managed in Part A (hospital insurance) on your birthday. If you are not receiving Social Security because you're still working, you must contact Social Security directly to enroll in Medicare during your initial enrollment period (the three months before your birthday and the three months after). If you did not pay Medicare taxes while working, you must contact Social Security directly to purchase Part A.
If you are an automatic Part A enrollee you will be automatically enrolled in Medicare Part B – the medical insurance component of Medicare – at the same time, the first day of the month you turn sixty-five. Part B costs a standard premium amount for almost everyone. If you are not an automatic enrollee and choose not to enroll in Part B when you apply for Part A because you or your spouse are still working and on an employer's plan, you may do so during the General Enrollment period (January 1-March 31 each year, coverage begins July 1) or the Special Enrollment Period. The Special Enrollment Period allows you to sign up for Part B anytime while you have employer-based group coverage or during the eight-month period after that employment or employer-based coverage ends (whichever happens first). If you enroll using the General Enrollment Period, you may be subject to a late enrollment penalty for not enrolling when you first became eligible.
What Can I Purchase to Supplement Original Medicare?
Medicare Supplement plans are standardized, and so carry the same benefits no matter which carrier you purchase them from. During your open enrollment period (the first six months in which you are both sixty-five and enrolled in Medicare Part B), an insurance company can not deny you any Medigap policy it sells, make you wait for coverage to start or charge you more due to a pre-existing condition. These plans vary but include benefits like the first three pints of blood when you're hospitalized, excess charges for Part B and coinsurance for skilled nursing facility care.
Medicare Advantage are private insurance plans that contract with the government to provide Medicare coverage (including medical and hospital needs). Oftentimes they include Part D (prescription drug) coverage in addition to traditional benefits and usually require an out-of-pocket premium. Some of these plans – such as HMOs and PPOs – restrict the services you can use to their provider networks. However, they can often lower your health care costs. You may enroll in a Medicare Advantage Plan when you first became eligible for Medicare or between November 15-December 31 or January 1-March 31 each year.
Prescription Drug Plans are standardone plans purchased to offer drug coverage. Usually these are not needed if you purchase a Medicare Advantage plan.
What is the Late Enrollment Penalty?
For Medicare Part B (which, unlike Part A, is not always automatic), every year in which you do not enroll in Part B after you become eligible will add ten percent to your monthly premium when you do. This is to discourage older people from delaying enrollment until they get sick.
The Part D penalty is calculated by multiplying 1% of the national base beneficiary premium by the number of full months you were eligible for coverage, but did not enroll. In addition, you can be penalized anytime you go a period of 63 days or more without a Medicare prescription drug plan or some other creditable coverage (from a former employer, for example).
What is the Medicare Donut Hole?
The Medicare coverage gap (often called the “donut hole”) refers to the way Medicare drug benefits are structured in which beneficies must bear 100% of the cost of drugs after their drugs add up to a certain price but bear only a nominal (5) %) cost after they catastrophic spending levels. However, beneficiaries receive a 50% manufacturer-paid discount on covered brand-name drugs (although the full price will count towards the catastrophic limit) and a 14% discount on covered generic drugs. Due to the Affordable Care and Patient Protection Act of 2010, this is set to slowly close before effectively being eliminated in 2020.
Does Medicare Cover Preventive Care?
Due to growing recognition about the value of preventive care, Medicare does cover many aspects of preventive care such as:
• A yearly physical, including a “Welcome to Medicare” visit during your first twelve months.
• A yearly cardiovascular screening.
• Two fast blood glucose screenings (diabetes exams).
• All people are eligible for a screening colonoscopy generally once every 10 years, once every 2 years if you're at high risk. Beneficiaries over age 50 are eligible for a fecal occult blood tests once every 12 months, and a flexible sigmoidoscopy once every 4 years.
• Annual mammograms for women over forty (Medicare also pays for one baseline mammogram for women with Medicare between ages 35 and 39).