The rules and coverages for Medicare are uniquely different from standard health insurance plans, making it difficult for seniors to get up to speed on how Medicare works.
Our comprehensive guide to Medicare for seniors will explain when to apply for coverage and how the various parts of Medicare can benefit you, including Medicare Supplement Plan G.
When to Enroll in Medicare
The first thing to know about Medicare is you can only enroll during certain timeframes. Most people should enroll in Medicare when they turn 65 even if they have access to a health plan through an employer. The enrollment period runs from three months before the month you turn age 65 until three months after you turn 65. If you fail to enroll at the proper time, you may have to pay a penalty of up to 10% of the monthly premium.
A reason for not enrolling in Medicare is it would disqualify you from having an HSA account, as HSA plans require you to have a high-deductible health plan in force. When you sign up for Medicare, you would still be able to use the funds in your HSA, but you wouldn’t be able to contribute new funds to the account.
Medicare also allows for a special enrollment period. Depending on your circumstances, you may qualify for the special enrollment period if you move, lose your current coverage, or qualify for another plan.
Unlike standard health plans where hospital and doctor visits are covered under one plan, Medicare breaks down the coverages into different parts.
Part A – Hospitalization
Medicare Parts A and B are considered Original Medicare. Medicare Part A is free for seniors who worked for at least 10 years and paid Medicare payroll taxes during that time. Seniors who don’t qualify for premium-free Medicare have to pay a premium that ranges between $278 and $506.
Medicare Part A covers costs for inpatient hospitalizations and care at skilled nursing facilities and nursing homes. A coinsurance fee can apply depending on how long the hospitalization lasts. For example, there is no coinsurance fee for hospitalizations lasting up to 60 days. From the 61st to the 90th day, the coinsurance fee can be up to $400 per day. After that, you will have to pay $800 for each “lifetime reserve day.” You get 60 “lifetime reserve days” which you can only use one time.
Part B – Medical Services
Everyone has to pay for Medicare Part B, and the premiums are $164.90 per month in 2023. Premiums can be more for people with higher incomes.
Medicare Part B is used for billing doctor visits, medical supplies, and other outpatient services. This part fully covers most preventative services, although you may have to pay a coinsurance fee or co-payment for certain preventative services. Medicare Part B also covers visits to diagnose illnesses, get health screenings, or receive outpatient mental health services.
Part C – Medicare Advantage
Medicare Advantage plans are popular plans that are administered by private insurers, and they are an alternative to Original Medicare. These plans bundle Medicare Part A and Part B into a single plan.
The average cost of a Medicare Advantage plan is about $18 per month according to the National Council on Aging, although a wide range of plans and associated premiums are available. Note that the cost of Medicare Part B is not included in your Medicare Advantage premium.
Many Medicare Advantage plans now cover extra health services such as hearing exams, dental services, and vision services. You can expect to pay a copay for many of the services under a Medicare Advantage plan.
Part D – Prescription Drug Coverage
If you opt to enroll in Original Medicare, it’s important to consider that these coverages don’t include prescription drug coverage, and prescription drug coverage is available under a separate policy. Part D is also an option under Medicare Advantage plans. According to Medicare.gov, the national average premium for Medicare Part D is $32.74 per month in 2023.
You should also be aware that not all prescription drug plans cover all prescriptions, and the rates for certain drugs may vary between insurers.
Medigap Coverage
Considering not all health services are covered by Original Medicare, beneficiaries who make this choice may also want to purchase a Medigap plan, which is titled Part G in many states. Medigap plans can help pay for out-of-pocket healthcare costs such as deductibles and coinsurance amounts. Coinsurance fees could be up to 20% of the cost of the covered services, making Medigap plans worthwhile.
Seniors who opt for Medicare Advantage plans cannot also purchase Medigap coverage.
Getting comprehensive information about Medicare as we’ve provided here ensures you will make the best choices for your unique circumstances at this stage of life.
Start Your Research Early
You are wise to start your research on your Medicare options well before you turn 65 so you continue getting quality healthcare at the most affordable pricing.
While many options are available for healthcare for seniors, beware of scams alleging they are legitimate health plans. Medicare plans are only provided by the government and reputable health insurance companies.
