For many Americans, Medicare is a central part of their health insurance mix. If you’ve never dealt with the Medicare system before, you probably will want to learn a bit about what it is. Even if you’re younger and not currently eligible, it can be helpful to know what Medicare is so you can factor it into your retirement planning. Here is what you should know about Medicare.
Purpose and Eligibility
Medicare is a federal program that provides healthcare to Americans who are 65 years of age or older. Some individuals with disabilities who are below the standard age are also available. Medicare is available for people who suffer from End-Stage Renal Disease, meaning that they’ve suffered permanent kidney failure.
Notably, anyone who is enrolled in Social Security before or at the time they turn 65 is automatically enrolled. If you’re eligible to apply for Social Security in the three-month window before turning 65, you also can apply for Medicare at the same time. Also, people who delay taking Social Security payments until later than age 65 are still eligible to enroll in Medicare.
Parts
A Medicare plan typically has parts that pull from different areas of the federal program. Medicare Part A covers hospitalization and many forms of long-term care. Part B covers general medical insurance requirements like visits to the doctor, medical devices and supplies, outpatient treatment and preventative care. Part D covers the costs of prescription drugs, vaccinations and many other types of shots.
Medicare Part C is a bit of an oddity. It is a form of private insurance. Many major insurance providers have contracts with the federal government that allow them to mix Part C coverage with private insurance. Some state Medicaid programs also work with Medicare to link coverage with state-level insurance based on income guidelines. Advertisements frequently refer to Medicare Part C coverage as a Medicare Advantage Plan.
Supplemental insurance is also available. Providers often call these Medigap plans. They can pay a portion of deductibles for Part A and B coverage. Medigap plans are also available for people who need coverage while traveling or living overseas.
What Do You Pay?
A typical person will pay nothing for Medicare Part A coverage. Even if you’re in the small group that does have to pay for Part A, you can purchase it for a low-cost premium. Part B coverage includes a premium, although there are programs for individuals who meet income guidelines that may reduce or eliminate the premium. Drug coverage under Part D is included with the premium for most individuals.
Deductibles apply in many cases. This is the portion that the patient has to pay out of pocket on a per-treatment basis. Most Medicare deductibles for most people are low, though. Also, there is a deductible cap on what you’ll pay in any given year for many services.
Applying
Many federal and state programs will connect you to the Medicare application. As previously noted, Social Security automatically enrolls individuals who are getting payments and have passed their 65th birthday. Many state assistance programs will also help people apply for Medicare. If you have a private insurer and wish to explore Medicare Advantage options, they will have a concierge who can assist. You are also welcome to compare potential options through the Medicare.gov or Healthcare.gov websites.
You will want to have documentation that can support your eligibility. Generally, things like your Social Security card and driver’s license are sufficient proof of age-based eligibility. You may need additional documentation of your medical condition if you’re under 65 years of age and believe you are eligible based on disability or due to renal disease.
Participating Providers
Notably, you can only use Medicare coverage with participating providers. The upside is that most hospitals, clinics and doctors’ practices are happy to take Medicare patients. However, you will want to confirm that a preferred provider is a Medicare participant before booking any appointments. Also, you may be able to use a Medicare Advantage plan with a non-participant practice if they accept payments from the insurer that offers the plans.
When you contact a doctor’s office or hospital about care for the first time, tell them that you want to know if they take Medicare patients. If they do, they can initiate the intake process. This will include getting the specific information for your Medicare plan so they can bill charges.
Maximizing Your Benefits
Finally, you’ll want to maximize your benefits. In addition to exploring and understanding the available options, you should factor eligibility into your retirement financial planning. Many people limit their withdrawals from retirement accounts to keep their eligibility in line. If you work part-time in retirement, you may also need to monitor your income. With a bit of planning, lots of people can get the most coverage while paying the smallest possible amount.
