Medicare is a federally run health insurance program for people aged 65 and older, as well as people with specific disabilities and health conditions under 65. You are expected to know when you need to enroll, and it’s essential to understand how Medicare works to avoid penalties, gaps in coverage, or unexpected costs. The transition to Medicare can feel overwhelming, and you might wonder, Can I apply without a Medicare broker? Whether you’re planning or ready to enroll, this article will cover seven important facts you should know when applying for Medicare.
The time to enroll in Medicare Part A and Part B is during your initial enrollment period, a 7-month window that begins 3 months before you turn 65, includes your birthday month, and ends 3 months after. If you miss this window, you may face a 10% late enrollment penalty for each year you delay signing up for Part B. However, if you’re still working past 65 and have creditable employer coverage, you may qualify for a special enrollment period and avoid the penalty.
Medicare is divided into various parts, and it’s important to understand how they fit together.
Medicare Part A
Part A provides inpatient hospital coverage and helps with skilled nursing and hospice coverage costs. Part A is typically premium-free if you worked 10 years, equivalent to 40 quarters in the U.S.
Medicare Part B
Part B covers 80% of medically necessary outpatient medical services, leaving you responsible for 20%. Social Security sets the cost of Part B, which fluctuates year to year. Individuals in higher income brackets may pay more, known as an IRMAA charge.
Medicare Part C
Part C refers to the Medicare Advantage program. When you enroll in an Advantage plan, you agree to receive your Medicare benefits through that private plan instead of Original Medicare. The cost of these plans varies by carrier, county of residence, and plan selected.
Medicare Part D
The Part D program provides prescription drug coverage. You enroll in a Part D plan offered by a private insurance company in your state. Each plan will have a premium and cost-sharing for covered drugs.
Many Medicare beneficiaries are surprised when they learn that Medicare is not free. While Part A is typically premium-free for those who have paid Medicare taxes for at least 10 years, Parts B, C, and D often have premiums associated with them.
In addition to premiums, you’ll also encounter deductibles, copays, and coinsurance when you receive care. It’s also important to note that Medicare doesn’t cover all health expenses, often leaving gaps in dental care, vision, hearing, and long-term care.
Medicare supplement insurance, or Medigap, is a secondary insurance that helps cover the costs that Original Medicare would otherwise pass on to you, such as copays, coinsurance, and deductibles. You must be enrolled in Parts A and B to purchase a Medigap policy.
The best time to buy is during your Medigap Open Enrollment Period, a 6-month window that begins on your Part B effective date. During this time, you can’t be denied coverage. You may be subject to medical underwriting outside this window, meaning insurers can decline your application or charge more based on your health.
Private insurers offer Medicare Advantage plans and combine Part A, Part B, and usually Part D into one plan. They often include extra benefits like dental, vision, hearing, and even gym memberships. To join, you must be enrolled in Parts A and B and live in the plan’s service area. These plans may offer lower out-of-pocket costs but typically have limited provider networks. It’s important to compare Advantage plans carefully with Original Medicare plus Medigap and Part D to find what best fits your needs.
IRMAA is an extra charge for higher-income individuals and can impact your Medicare Part B and D premiums. IRMAA is calculated based on your modified adjusted gross income derived from your tax return two years prior. You can also appeal IRMAA annually if you believe you qualify for a life-changing event and have documentation to support your case.
You are automatically enrolled if you receive Social Security benefits at least four months before your 65th birthday. If this is not the case, you must manually apply for Medicare.
Enrolling in Medicare is a significant milestone, and being well-informed can help avoid costly mistakes and ensure you get the coverage that best fits your needs. These seven facts provide a strong foundation for navigating the Medicare process. Whether you choose Original Medicare with a Medigap plan or Medicare Advantage, take the time to compare options carefully, and don’t forget to seek help from trusted resources.
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