Category: Retirement

Get to know Medicare basics before you enroll

By
Jeffrey Dortch
October 4, 2016
Elderly couple at pharmacy

Are you approaching age 65 or already there? If so, now’s the time to think about signing up for Medicare, the federal health insurance program for people age 65 or older, certain younger people with disabilities, and people with end-stage renal disease. This healthcare plan will serve you in retirement, so it’s important to know the Medicare basics before you enroll.

Coverage

Medicare has two primary insurance coverages — Part A and Part B.

Part A pays some costs associated with hospital stays such as:

  • Doctors’ fees
  • Diagnostic tests
  • Semi-private hospital room
  • Food

Since Part A doesn’t pay all of your hospital costs, you’ll be responsible for a deductible, co-pays, and co-insurance costs based on the length of your hospital stay.

Medicare Part B covers doctor visits and requires you to pay a monthly premium. Coverage includes, but is not limited to:

  • Physicals
  • Clinical laboratory services
  • Diagnostics
  • Outpatient care
  • Mammograms
  • Diabetes treatment

Be aware there are services not covered by Part A or B­­. For example, Medicare offers a separate prescription drug coverage called Medicare Part D. To get Medicare drug coverage, you must join a plan run by a Medicare-approved plan provider. Visit Medicare Plan Finder to learn about plans and providers.

Many employees enroll in Part A because there is no cost. However, it’s best to ask your employer (or your spouse’s employer, if that’s where you get your coverage) whether your current insurance coverage will change if you enroll in Medicare, even just Part A.

Eligibility and enrollment

If you’ve paid into the Social Security system for a minimum of 10 years and qualify for benefits,  then you qualify to receive Medicare. Your eligibility begins on the first day of the month you reach age 65.

You can enroll in Medicare during the three months before the month you turn 65, the month you turn 65, and the three months that follow. This is known as the Initial Enrollment Period. Your coverage start date will depend on when you enroll.

You can also enroll in Medicare before reaching age 65 if you’ve received Social Security disability payments for more than 24 months. Be sure to enroll in Medicare during this initial enrollment period or you may face a Part B premium surcharge if you enroll later.

For example, if you turn 65 in July, your seven-month window begins on April 1 and ends on December 31. If you enroll during the first three months of the enrollment period, your coverage will begin the first day in the month you turn 65. If you enroll in the month of your birthday or the three months that follow, your coverage will be delayed.

The chart below shows what enrollment and coverage looks like during the initial enrollment period:

Enrollment Month

Coverage Beginning Date

April

July 1

May

July 1

June

July 1

July

August 1

August

October 1

September

November 1

October

December 1

If you don’t sign up within the Initial Enrollment Period, you can sign up during the General Enrollment Period between January 1 and March 31 each year; however, your coverage start date will be delayed until July 1.

If you are eligible for Medicare but still working, your decision to enroll in Medicare Part B is influenced by the number of people employed in your workplace. If your employer has more than 20 employees, you do not need to sign up for Part B right away because your employer’s group health plan will be the primary insurer. When you retire, you will have a special enrollment period of eight months to sign up for Part B without penalty.

When you apply for Social Security benefits, it will trigger automatic enrollment in Medicare Part A, but you can apply for Medicare Part A without taking Social Security benefits. You’ll need to submit an application online or at your local Social Security office.

Don’t delay enrollment

If you are over 65 and covered by an employer’s group health plan you can delay Medicare enrollment without paying a premium surcharge. But if want to guarantee access to health insurance coverage, it’s best to enroll in Medicare once you become eligible as age 65 or retirement approaches.

The advice provided is for informational purposes only. For additional guidance on Medicare, contact your local Social Security office or Seniors’ Health Insurance Information Program (SHIIP) with the NC Department of Insurance.

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