Getting Started With Medicare

 | November 17, 2009

Medicare is a federal health insurance program for people who are 65 and older, for some younger persons with disabilities, and for people with end-stage kidney disease.

Medicare has:

• Hospital insurance (“Medicare Part A"), which helps pay for hospital bills.
• Medical insurance (“Medicare Part B”), which helps pay for doctor bills.
• Prescription drug insurance (“Medicare Part D”), which helps pay for prescription drugs

Who Can Get Medicare

Most people who are 65 and older, some younger persons with disabilities and people with end-stage kidney disease can get Medicare.

How to Sign up for Medicare at 65

If you are nearing 65, there is a seven-month period during which you can get Medicare.

This seven-month period includes:

• the three months before your 65th birthday
• the month of your 65th birthday
• the three months after your 65th birthday

The best time to sign up for Medicare is during the three months before your 65th birthday. You can sign up for Medicare in one of two ways:

   1. You are automatically enrolled in Medicare when you turn 65 if you are getting Social Security or Railroad Retirement payments. You'll receive a package of Medicare information, including your Medicare card, in the mail.
   2. You need to sign up for Medicare if you aren't getting Social Security or Railroad Retirement payments. You can sign up by calling or visiting the Social Security office nearest you.

Contact the Social Security Administration at 1-800-772-1213 or at www.ssa.gov for more information.

Medicare Parts A and B

When you sign up for Medicare, you will automatically get Part A, which covers hospital bills. Most people do not have to pay a monthly premium for Part A. That is because they or their spouse paid Medicare taxes while they were working.

However, Medicare Part B, which pays for doctor bills, is optional. You will have to pay a monthly premium for Part B. You can sign up when you first go on Medicare, turn down the coverage, or wait to sign up at a later date.

Why would you wait to sign up for Part B?

If you are working and already have group health insurance from your employer or your spouse’s employer, you might not need Part B right away. Be aware that if you wait to sign up for Part B, the premium could go up by 10 percent for each year you could have had Part B but did not. You will pay that extra cost as long as you remain on Medicare.

You won’t have to pay more for Part B if:

• You are still working and have group health-insurance coverage when you sign up for Medicare Part B, or
• you sign up for Medicare Part B within eight months after you stop having group health insurance.

If you don’t think you’ll meet these conditions, you will have to pay more for Medicare Part B when you do get it. You may want to think about getting Part B when you first sign up for Medicare. If you are not working and aren’t covered through a working spouse’s coverage, be aware that if you wait to sign up for Part B, you can only sign up between January and March and the coverage will take effect July 1.

Medicare Prescription Drug Coverage

All people on Medicare can sign up for this voluntary drug coverage. You will have to select a Medicare-approved prescription drug plan offered through a private insurance company.

Your costs (deductibles, premiums, and co-payments) will vary depending upon the plan you choose. You can first join for up until three months after the month your Medicare coverage started. If you do not join when you start Medicare, you may have to pay a penalty if you decide to join during a future open enrollment period (November 15–December 31 of each year).

Generally if you have creditable coverage or coverage as good as Medicare’s from an employer or union, you can keep that coverage. Later, if you discontinue or lose your drug coverage, you can join a Medicare prescription-drug plan without incurring a penalty.

Medicare Supplemental Insurance (Medigap)

Many people with Original Medicare choose to buy/purchase another policy through a private insurance company that helps pay the "gaps," such as Medicare deductibles, coinsurance, and copayments. This type of policy is called a Medicare Supplement or Medigap policy. Some of these policies provide additional services not covered by Medicare. In most states, a Medigap policy must be one of 11 standardized policies (plans are labeled with a letter A-N), so you can compare them easily. Beginning June 1, 2010, new standards will take effect and new choices for consumers-- Plans M and N can be sold. Plans A-D, F, high deducible F, G, K, and L will continue to be sold, with hospice coinsurance as a basic benefit in all plans.

If you are 65 or older, and first sign up for Part B, you have six months to buy any Medicare Supplemental (Medigap) policy you choose and can't be turned down, regardless of your health. This is called your open enrollment period. You only have this period once in your life. After this six-month period, you may not be able to buy the Medigap policy you want, because insurers may turn doen people with certain medical conditions.

Note: In some areas of the country, more than one Medicare plan is available for you to choose. You need to have both Medicare Part A and B if you want to join a Medicare Advantage plan such as a Medicare Health Maintenance Organizations (HMO), a Medicare Preferred Provider Organization (PPO) or a Medicare Private-Fee-for-Service Plan (PFFS). You generally do not need a Medigap policy or Medicare prescription drug coverage if you enroll in a Medicare Advantage plan. Make sure your Medicare Advantage plan covers the drugs and services you will need.