A High-Level Medicare Road Map

For many about to turn 65 or enroll in Medicare for the first time since retiring, deciphering the government sponsored health care system and all of its parts can be confusing and seem like a daunting task.  This week we’ll try to, at a high level, demystify Medicare and provide a working knowledge of the system.

Basic Medicare (Parts A & B detailed below) was once to descried to us as a piece of Swiss cheese; yes it is cheese, but leaves a lot to be desired (or holes to be filled in).  As such, Medicare is medical coverage but requires supplemental services to provide the coverage and care you want and expect. 

Medicare can be summarized as follows:

  • Part A
    • Covers Hospital Stays – Free
      • Free because you have been paying for this coverage all of your working life via Medicare deductions from your paychecks.
      • Anything that happens in the hospital is covered under Part A
  • Part B
    • Covers Doctor visits outside of the hospital
    • 80% of all health care related costs are covered by Part B
    • Your income level in retirement determines your monthly premium. The higher your income, the higher your premium
      • 2017 premiums range from $134 - $428.60 per month
  • Part D
    • Covers Prescription Drugs
    • 40 Plans on the Market
    • Visit www.Medicare.gov to enter your current medications and you will be provided with the top 3 plans given your medication needs
    • If no medication is currently required – ENROLL IN A PLAN ANYWAY such as Envision which starts at $14.60 per month
      • You will pay penalties in the form of higher premiums if you do not elect a Part D plan during your initial enrollment
  • Supplemental (for the remaining 20%)
    • Plan F
      • Covers 100% of medical expenses not covered under Parts A & B
      • No deductible means higher premium
    • Plan G
      • Covers 100% of medical expenses not covered under Parts A & B
      • Annual deductible means lower premium
  • Dental
    • Delta Dental is one of the main insurers in the Medicare space and coverage starts for as little as $35 per month

A few rules of the Medicare road:

If you are receiving Social Security benefits when you turn 65, you will be automatically enrolled in Part A and Part B. If you are covered by an employer plan (or your spouse’s employer plan) and will continued to be covered, you can opt out of Part B coverage for the time being. Follow the directions when you get your Medicare card to let the government know that you do not want Part B. Otherwise, the premium will be deducted from your Social Security payment.

You should enroll in Medicare Part A when you turn 65 – even if you’re covered under an employer sponsored plan (or your spouse’s employer plan) and will not be enrolling in Part B.  Many sources say this isn’t necessary but in our experience it can’t hurt.  Part A coverage may pick up some costs of a Hospital stay that your primary insurance will not.  To register for Part A, simply enroll via the Social Security website at www.ssa.gov/myaccount

If you are NOT covered under an employer plan (or your spouse’s employer plan) and turn 65, you MUST enroll in Medicare Parts A & B within a 7 month window surrounding your 65th birthday (3 months before turning 65, the month you turn 65, or three months after turning 65).  Failure to enroll during this period will result in penalties in the form of higher premiums which could top 10% per every 12 month period you were eligible to sign up but failed to do so.

While the Medicare enrollment process can seem challenging at the onset, you’ll be an expert in no time - Just ask someone who is older than you!  Please do not hesitate to reach out to Thrive with any questions.  If we can’t help you, we’ll direct you to the resource that can.

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