80 million baby boomers started turning 65 years old in 2011. Since then, approximately 10,000 boomers have been reaching Medicare age every day; this will continue until 2030. If you or someone you care about is close to 65, it is time to think about Medicare. You become eligible as soon as the first of the month of your 65th birthday. It is not a good idea to delay enrollment, as it can result in lifetime penalties; it is best to understand what needs to be done.
Medicare has four “Parts”: A, B, C and D. (Part C is a combination of other “parts’ of Medicare.) Beneficiaries are required to have at least part A initially, at 65. They may add other parts of Medicare coverage as needed at that time.
Part A is also known as the Hospital Insurance program. It is automatically covered under Medicare for NO premium. (The only requirement is that you or your spouse have accumulated 10 years of work credits in Social Security over your lifetime.) Everyone who turns 65 needs to enroll in Medicare part A within the 7 months window as recommended on Medicare.gov to avoid future penalties. This also applies to individuals who are still in the work force and are covered by their employers’ benefits.
Part B is also referred to as supplemental; it covers outpatient healthcare visits such as doctors, outpatient surgery, diagnostic testing and medical equipment. Part B coverage is considered optional coverage and it requires a premium, which is calculated based on your income. If you are currently covered by other coverage, such as by your or your spouse’s employer, you can choose to enroll in Medicare part B with NO penalty later when the need arises. However, if you do not have outside coverage you will pay a penalty for each year you delay signing up. You will also have to wait until the general annual enrollment period, thus further delaying your coverage.
Part C coverage is also known as Medicare Advantage or MA. It is actually a combination of Medicare parts A and B and sometimes part D. This coverage is usually offered by Health Maintenance Organizations or HMOs, which have become quite popular of late.
Part D is optional and is provided by private insurance companies. Medicare part D covers most outpatient prescription drugs. There are thousands of part D programs that are sold through insurance companies around the country. In general, the part D plan has a list of medications known as formulary. This tells you which medications are covered by the plan. You can always reevaluate your choices during the enrollment period each year, which is usually between October 15 through December 7.
The Medicare.gov website is a good place to start; where you can learn what plans are available to you, in your area. Things change frequently though with medical plans and particularly with drug pricing; it is best to look directly at the plan website to verify your understanding of what is covered.
Medicare has deductibles, co-payments and coverage exclusions that you will have to pay for out of your own pocket, like many other insurances. You need to shop for the program that will offer you the most benefits at the most reasonable cost for your situation.
