What is Medicare?
- Part A (hospital insurance) helps pay for inpatient care in a hospital or skilled nursing facility.
- Part B (medical insurance) helps pay for medical care from doctors and other health care providers.
- Part C (Medicare Advantage) plans combines Parts A and B—and usually Part D—into one plan offered through a private insurance company approved by Medicare.
- Part D (prescription drug insurance) helps cover the cost of prescription drugs.
Original Medicare—Parts A and B—has deductibles and an unlimited 20% coinsurance for medical bills. Most people with Original Medicare also have some type of supplemental insurance to help pay the deductibles and coinsurance.
Am I eligible for Medicare?
Individuals under age 65 may be eligible if they have been receiving Social Security benefits for 2 years or have End Stage Renal Disease (ESRD).
I am turning 65 in 6 months; do I need to do anything to enroll into Medicare?
If you have not yet started Social Security, you will need to sign up. That can be done by contacting Social Security or by enrolling online at ssa.gov.
How much does Medicare cost?
There also is a tiered “high earner surcharge” for people with incomes greater than $85,000 per year for a single tax filler or $170,000 per year for joint income tax fillers. View full chart
Social Security uses your income tax statements from 2 years prior to the current year. If your income has since gone down, you may be able to appeal to Social Security and have the surcharge removed.
How much do Medicare health plans cost?
That level of coverage will greatly reduce or eliminate out-of-pocket expenses when you see your doctor or go to the hospital, and you will get your prescriptions at the lowest possible cost.
Lower cost plans will require that you still pay something when you see your doctor or receive any other medical care just like you did prior to enrolling in Medicare.
If you are looking to spend less, a Medicare Advantage (Part C) plan might be more appealing. You can still get a very good plan and not add any additional cost ($0 premium!) to your Part B premium.
I am getting Medicare but still work and am covered by my employer’s health plan. Should I enroll into Part B?
In cases where the employer coverage is primary, most people choose to delay enrolling into Part B. That’s because Medicare will pay after your employer coverage and will usually pay very little, if anything at all. You will save paying the Part B premium (currently $121.80 per month) and you will NOT be penalized for delaying your enrollment.
On the other hand, if you don’t like your employer plan because it is expensive or has a big deductible, this may be your opportunity to leave your employer plan and go with Medicare instead. The choice is yours.
If you work for a small employer with less than 20 employees, Medicare will be primary and you should take Part B now. If you pay a premium for your employer coverage or if you don’t like it, you should compare it with other options available to you in the individual market.
I don’t take any medications. Do I have to enroll into a Part D (prescription drug) plan?
This penalty is 1% for each month you are eligible to have a Part D plan but choose not to enroll, and it is permanent. You must pay the penalty for as long as you are enrolled in Part D. If you delayed enrollment for 2 years, for example, you would have to pay an additional 24% of the plan’s premium every single month for the rest of your life, assuming you stay enrolled.
A better course might be to enroll in the plan with the lowest premium. Many very inexpensive plans can be helpful for antibiotics if you get a bad cold or infection and serve as a backup in case something happens. Plans can be easily updated each Annual Election Period if your needs change and need something more robust.