6 Things to Not Overlook When First Enrolling in Medicare
So, you’re turning 65 in a few months. First of all, happy early birthday! Along with planning your birthday party, it’s time to start exploring your Medicare options.
That’s because your Initial Enrollment Period (IEP) for Medicare will likely begin shortly. That’s a seven-month Medicare sign-up window that includes the three months before, the month of, and the three months after your 65th birthday.
“Any time someone is approaching age 65, it’s a great idea for them to talk to a licensed insurance agent,” says Silas Jessup, HealthMarkets’ contracted licensed insurance agent and executive sales leader in Indiana. “That’s true even if you’re still employed and plan to stay on your employer-based insurance.”
Enrolling in Medicare can feel really difficult. Make it easier on yourself by learning about possible oversights and how to avoid them. If you know someone on Medicare, they probably have a story or two about how signing up was not a walk in the park. Here are some potential oversights to avoid and tips that could help you make the stroll easier.”
Potential Oversight #1: You don’t know your ABCs… or Ds of Medicare
Medicare is the U.S. government’s national healthcare program for adults ages 65 and older. (It’s also for individuals with disabilities, End-Stage Renal Disease (ESRD), or ALS (also called Lou Gehrig’s disease). It’s divided into sections, each of which provides a certain type of coverage and is identified by a letter:
- Medicare Part A: This is the part of Medicare everyone gets when they first sign up. You don’t have to pay a premium (or monthly bill) for it if you’ve been working and paying taxes for at least 10 years. If you do not qualify for premium-free Part A, you can still sign up for it and pay monthly premiums. Medicare Part A covers services such as in-patient hospital care, nursing home care, and home health care.
- Medicare Part B: When you sign up for Medicare Part A, you also have the option to sign up for Part B, which covers medically necessary and preventive care. These types of health services include things such as doctor visits, preventive services (flu shots and vaccines, for example), ambulance services, and mental health services. You’ll pay a monthly premium for Part B.
- Medicare Part D: This part covers medications (yes, it’s separate). Medicare Part D will also cost you a monthly premium.
There’s a third letter of the Medicare alphabet—Medicare Part C. These plans are also known as Medicare Advantage plans, and they’re the equivalent of coverage under Medicare parts A and B (also called Original Medicare). They may also include additional benefits, including coverage for prescriptions, vision, hearing, dental services, expanded telehealth, and even fitness. And you get them all in one plan. However, you may need to use the required networks, much like many employer-offered health plans.
Potential Oversight #2: You don’t compare your current plan to Medicare
Let’s say you turn 65 and you’re comfortable with the group health insurance plan that you’re already on through either your employer or your spouse’s. (Yes, you may still be working at age 65.)
If you still have one of these traditional plans, you don’t have to switch to Medicare right away. But you might save money if you do.
“Sometimes group insurance is the better option, and other times Medicare can be a better solution,” says Jessup. “It all depends on your personal situation, the cost of the group insurance, and the benefits that are being provided. An insurance agent can help you decipher which coverage would be better for your individual circumstances.”
Comparing costs on your own can be difficult, Jessup says. One option can be to call a licensed health insurance agent from HealthMarkets at (800) 827-9990 or visit healthmarkets.com to figure out what insurance plans are available to you.
Potential Oversight #3: You don’t take time to read the fine print
If you stick with Original Medicare, you’ll be getting Part A (and likely Part B), and that means about 80% of your medical costs will be covered, says Jessup. That leaves you to pay for the other 20%.
Original Medicare has no out-of-pocket expense limits. Costs may add up if you end up going to the doctor a lot or if you need an expensive medical procedure.
Check with your licensed insurance agent to learn about ways to cover some of the expenses that Medicare does not.
Potential Oversight #4: You don’t check the medication lists for Medicare Part D or the Medicare Advantage plan you’re interested in
If you’re taking multiple prescription medications, you’ll probably want to add coverage for that—that is, Medicare Part D.
All Medicare Part D plans must cover a wide range of prescription drugs, including most drugs in “protected classes” like those that treat cancer or HIV/AIDS. But before you sign up for a plan, you’ll want to make sure your prescriptions are on your plan’s list of covered drugs, which is called a formulary (each plan has its own).
Many plans place medications into different levels, called “tiers,” on their formularies. Drugs in each tier have a different cost, with lower tier ones usually costing you less than higher tier ones.
So, take some time to learn which of your prescriptions may be covered and the tiers they fall into. Having that information on hand will help you determine how much you’ll be spending on prescriptions.
Potential Oversight #5: You don’t check the out-of-pocket limits on the Medicare Advantage plan
In general, Medicare Advantage plans usually have a lower premium, but the out-of-pocket limits can be different from plan to plan says Jessup.
Out-of-pocket costs can vary, but you won’t have to pay more than the out-of-pocket limit—the government capped it at $7,550 in 2022. And many Medicare Advantage plans have out-of-pocket limits below that.
Potential Oversight #6: You don’t pay attention to the deadlines
Remember: Your Medicare IEP is only seven months. So, depending on when you sign up during the IEP, you’ll just need to pay attention to deadlines, based on where your 65th birthday falls.
As we mentioned earlier, you can sign up for Medicare starting three months before the month of your 65th birthday, and you have until three months after the month of your 65th birthday to enroll. Or, if your birthday is on the first of the month, your seven-month window starts four months before the month you turn 65 and ends two months after.
In short, your Medicare or Medicare Advantage coverage will start anywhere from one to three months after you sign up for it.
If you miss your IEP, though, you’ll likely have to pay a late enrollment fee, which goes up the longer you wait to enroll. For Part B, for example, it’s 10% of the premium—or your monthly payment—for every 12 months you delay. The standard premium for 2022 is $170.10, but it can change every year (and your penalty can too). That can really add up.
There’s also a late penalty for Medicare Part D. It’s equal to 1% of the national base beneficiary premium times the number of months that you didn’t have Part D or other qualified continuous coverage.
Late enrollment can also mean you’ll have some serious gaps in coverage. Keep track of your deadlines. They could end up saving you a lot of money.
Make no mistake: If you’re on Social Security, life is good
Good news if you’re on Social Security: You don’t have to worry about signing up. (Yes, you read that right.) If you’ve been receiving Social Security benefits for at least four months before you turn 65, you’ll be automatically enrolled in Medicare parts A and B.
You only need to be concerned with your Initial Enrollment Period if you’d like to choose a Medicare Advantage plan instead of Original Medicare, or if you’d like to delay enrollment.
Along with the birthday cards you’ll get for turning 65, you’ll also get a welcome package in the mail plus your Medicare card.
Looking for the Medicare plan to fit your lifestyle? Contact HealthMarkets to speak with a licensed insurance agent at (800) 827-9990. Visit healthmarkets.com to schedule an appointment.