Last time, I covered Social Security benefits for those of you who are among the 10,000 Boomers each day coming of retirement age or retiring.
Today, I'll tell you all you need to know about SS's cohort, Medicare.
Part A is for hospitalization only, automatically kicks in as soon as you turn 65 (or go on SSDisability), and has no premium. Part B requires opting in, carries a premium, and pays for all other medical care; doctor's visits, labs, outpatient procedures, etc.
- You can enroll in Medicare B beginning three months before the month you turn 65. For those whose birthday is on the first day of the month, coverage can start as early as the first day of the month prior to your birthday. I know...I'm confused too...
- If you don't sign up for Medicare Part B during your initial enrollment period, your premiums may increase by 10% for each 12-month period that you delay enrollment.
- Part B has a monthly premium based on your income, currently ranging from $108-$134/mo.
It can be taken directly out of your SS check if you wish.
- If you are still working and covered by a group health insurance plan, sign up within eight months of leaving the insurance plan to avoid the penalty.
- Schedule your free physical. Medicare provides a one-time free physical exam within the first 12 months you have Part B coverage. This can include a review of your health, vision and blood pressure screenings, cardiovascular & breast cancer screenings, bone mass measurements, flu shots, and counseling about preventive care services covered by Medicare.
Choose the best coverage plan for your needs
Once you've enrolled, you then pick the right type of medical care plan for you. Wise offers this analogy for choosing: "It's a lot like that old Midas commercial...you can pay me now, or pay me later." With Medicare, you can opt for a plan for which you pay more monthly or up-front, then pay less or nothing as you go along, or one that has no additional premiums up-front, but carries costs along the way like co-pays and deductibles. Here's the break-down:
- Traditional Medicare alone:
Medicare pays for 80% of covered costs; you're responsible for the remaining 20%. Given the following two options, I don't recommend this one - requires far more out-of-pocket.
- Part C Medicare Advantage plans:
These are Medicare policies that allow private health insurance companies to provide Medicare benefits. They take your monthly Medicare payment directly, then provide you coverage for Parts A, B, & D (covered next). According to Wise, "In most areas of the country a Medicare Advantage plan does not have an additional premium, and most usually have a Maximum Out of Pocket of about $6,700." Some include perks like limited vision/dental, and "Silver Sneakers" gym membership. They all include drug coverage, but vary as to what they charge for different medications, just as they vary on co-pays/deductibles/max out of pocket. They come in the same HMO/PPO varieties offered by private insurance.
I think this is best for those who have less health problems or are on disability prior to age 65 (costs for supplement plans - explained below - are 3-4X higher for folks in this group).
- Part D Drug Coverage:
There's many plans for this, and yes, it's the one with the ever demonized "donut hole." Wise cautions, "keep in mind that with Traditional Medicare or a Medicare Supplement plan (explained below), you must also purchase an approved Part D drug plan. If you don't have creditible drug coverage upon signing up for Part B, there is a 1% penalty for each month that you didn't have coverage when you do finally get it. It can be costly." Part D plans cost an average of $42.17/month according to the Kaiser Family Foundation, a 9% increase from last year.
- Part F/G Medicare Supplement (MediGap) plans:
These are Medicare approved insurance plans that cover costs known as Medicare Part B excess charges; the difference between what a doctor or provider charges and the amount Medicare will pay (that 20% mentioned above). These carry a monthly premium (that up-front cost Wise spoke of above) in addition to your monthly Medicare premium, but then carry no or few co-pays or deductibles. According to Wise, "Plan F is the most popular & comprehensive. In Florida, a person turning 65 can get it for about $175/month. The Maximum Out of Pocket for Plan F is $2,200." As mentioned above, you must also choose a Part D drug coverage plan in addition to your Supplement plan. So...With this option, you're paying your Medicare premium, your supplement premium, and your drug coverage premium up-front monthly, an average total of about $340/month.
I think this is best for those whose medical care on an Advantage plan would add up to more than the monthly premiums associated with this option, or have no concerns about the up-front costs and wish the ease of this option, including the freedom to go to any doctor who takes Medicare anywhere in the country.
Important final note: make sure to ask if a physician accepts Medicare before making an appointment – unfortunately an ever growing number of physicians have stopped taking new Medicare patients.
Phew! Thanks, Wise! And...
You have been officially alerted...