Almost everybody understands that you can get Medicare when you turn 65, but many people don’t know much more about the government-sponsored health insurance program. You may have had Medicare coverage for a few years now and still not really understand how it works.
It’s no wonder. With four parts (A,B,C and D) and two companion programs with similar names (Medicare Advantage and Medicare Supplement, or Medigap), it can be hard to keep everything straight.
Here’s a list of the top things seniors might not know about Medicare – but should.
Top Things Seniors Should Know About Medicare
- Seniors aren’t the only ones who qualify. Medicare is also available to people who are disabled or have end-stage renal disease or ALS (Lou Gehrig’s disease).
- Aging baby boomers are signing up in droves. About 1100 people enroll in Medicare every day. Currently, there are about 48 million beneficiaries, but that number is expected to hit 79 million by 2030.
- There’s an open enrollment period every year. It’s from October 15 to December 7.
You can also switch from Medicare Advantage to Original Medicare from January 1 to February 14 each year. This period is called the Medicare Advantage Disenrollment Period.
And if you are turning 65 and newly eligible, you can enroll during a seven-month period around your birthday.
You can find a full list of all the different types of Medicare enrollment periods here.
- Parts A, B, C and D cover different things. Part A covers hospital stays and Part B covers other medical expenses.
Together these are often referred to as Original Medicare. Part C is an alternative program called Medicare Advantage. Part D is prescription drug coverage.
- Medicare doesn’t pay 100 percent of your costs. Parts A and B each have a deductible. After that is paid, Medicare will pay 80 percent of your eligible costs. The other 20 percent is your responsibility.
Medicare does not put a cap on your annual out of pocket costs.
- Some people have to pay a premium for Part A. Most people don’t have to pay anything for their Part A hospital coverage.
But if you haven’t earned enough “work credits” to qualify for Social Security benefits, you will be charged a monthly premium of up to $422 per month (in 2018).
- Everyone pays a premium for Part B – and if you earn more, you’ll pay more. The standard Part B premium for 2018 is $134 per month.
But if you are a single person who made more than $85,000 in 2016 or a couple that made more than $170,000, your premium will be higher.
For example, an individual making between $107,000 and $133,500 will pay $267.90 per month in 2018.
- If you wait to enroll in Part B or D, you’ll pay a permanent penalty. Usually, if you don’t sign up for Part B medical coverage or Part D prescription drug coverage when you’re first eligible, you’ll rack up a penalty for every month you delay.
When you do sign up, you’ll have to pay that penalty monthly for the rest of your life.
- It can be expensive to go to a skilled nursing facility. If you’re sent to a skilled nursing facility after at least three days in the hospital, it’s covered 100 percent – but only for the first 20 days. After that, there’s a daily copay ($167.50 in 2018) up to day 100.
After the 100th day, you’re on your own. And there’s no coverage if you haven’t had a hospital stay first.
- Medicare doesn’t cover long term care. If you have to move to assisted living, a nursing home or a memory care facility, don’t expect Medicare to pay for it.
Most of the services provided in these facilities are custodial services to help with day to day living. Medicare doesn’t pay for custodial care.
You can learn more about long term care coverage regarding medicare here.
- You have other options. There are two ways for Medicare enrollees to increase their Original Medicare benefits. The first is to enroll in a Medicare Advantage plan, which is Medicare offered through a private insurance company.
Medicare Advantage plans must offer all the benefits of Medicare Parts A and B. But they may also provide additional benefits, including dental, vision and prescription drug coverage.
However, these benefits come with many restrictions. Most Medicare beneficiaries end up switching back to Original Medicare from a Medicare Advantage plan.
The second option is to enroll in Medicare Parts A and B and buy Medicare Supplement insurance, also known as Medigap.
Medigap pays for things that aren’t covered by Original Medicare. For example, some plans pay your 20 percent coinsurance or your deductibles.
- Medicare won’t pay for your fillings or eyeglasses. Vision and dental coverage aren’t part of Original Medicare. If you want this coverage, you’ll have to buy it separately or enroll in a Medicare Advantage plan that offers it.
- If you travel overseas, Medicare won’t travel with you. If you have dreams of globetrotting or retiring to the South of France, you should know that Medicare will not pay for your medical costs or prescriptions overseas.
If you need travel coverage, you can get a Medicare Supplement plan with travel benefits. Learn more about travel insurance for seniors with Medicare here.
- Original Medicare doesn’t have provider networks – but Medicare Advantage does. If you had health insurance through your employer, you’re probably familiar with provider networks – the doctors and hospitals that charge a lower rate because they “take your insurance.”
Provider networks are also a feature of Medicare Advantage plans. But with Original Medicare, you can go to any doctor who takes Medicare.
- If you wait to buy a Medigap policy, you could regret it. If you buy a Medigap policy during the initial enrollment period when you sign up for Medicare, you can’t be turned down or charged extra because of preexisting conditions.
If you wait, your policy will go through medical underwriting, and you could be denied or slapped with a much higher premium.
- Medicare is a great deal for most people. Most people receive far more in benefits than they pay into the system over their lifetimes.
For example, according to the Urban Institute, if you are a single Medicare beneficiary who turned 65 in 2010 and earned $44,600 a year, you could expect to pay an average of $61,000.
But your benefits over your lifetime would be at least three times that – about $180,000 for men and $207,000 for women, who tend to live longer. This gap is expected to grow.
