En español | Welcome to the world of Medicare. More than 60 million Americans get their health care coverage through this federal insurance program for older Americans.
At 65, you become eligible for the program — which means you will need to set aside extra time around that milestone birthday to sift through many options so you can sign up for the coverage that meets your health needs and budget.
It’s up to you to get ready. No letter will arrive in the mail announcing it’s time to start making these decisions. What’s more, the timetable is specific — and important. You can start signing up three months before you turn 65 and you’ll have until three months after your birthday month to enroll. If you miss that deadline, you may end up paying higher premiums. If you are still working and have employer-sponsored health coverage, you can probably wait to sign up —but more about that later.
Think of Medicare as a buffet. You’ll want to pick the options that you can afford and that will meet your particular medical needs. Here are the four basic parts of Medicare that will cover you for everything from hospital care to doctor visits to prescription drugs.
- Part A covers hospital care and some nursing home, rehabilitation and hospice care
- Part B covers doctor visits, lab tests, screenings and other outpatient services.
- Part C, also called Medicare Advantage, is comprehensive coverage that combines Parts A and B and is provided by private insurers, usually through HMO or PPO plans.
- Part D covers prescription drugs.
If Medicare is a buffet, Part C, known as Medicare Advantage, is more like a sit-down meal, since a private insurer bundles together parts A and B and most likely D into one comprehensive plan.
That leads us to your first big Medicare decision. Choosing between the two options for getting your medical coverage: Medicare Advantage (sit-down meal) or Original Medicare (a la carte.) Here’s a quick breakdown of each.
If you enroll in Original Medicare, you can choose any provider that participates in the program. You won’t need referrals to see specialists and you will be covered throughout the United States. Premiums are set by the federal government.
But Original Medicare doesn’t cover everything. If you have serious medical conditions, your out-of-pocket costs could be high, since there is no cap on such expenses. And you have to sign up separately for prescription drug coverage (Part D) and for private supplemental (or Medigap) insurance to help cover your out-of-pocket costs, such as hospital deductibles.
If you select Medicare Advantage (MA), you’ll be enrolled in a private insurance alternative to Original Medicare. These plans provide one-stop coverage and many also offer some dental, vision and hearing benefits. Such plans also typically have lower out-of-pocket costs than Original Medicare and have an annual cap on out-of-pocket costs. The Centers for Medicare and Medicaid Services also recently added an additional roster of benefits that may be offered, including products such as portable wheelchair ramps and other devices and modifications to your home that can help you if you have physical impairments.
But you may need referrals to specialists, may pay more to see providers who are not part of the plan’s network and your access to coverage beyond where you live could be limited.
Four Key Factors That Can Make Your Medicare Decisions for You
Viewing your Medicare coverage decisions through the following four categories can also help you zero in on which plans will work best for you.
- Do you want to keep your doctors or are you open to changing? Original Medicare allows you to maintain your current provider – if they accept Medicare – while Medicare Advantage relies on specific networks of doctors and hospitals.
- Do you have a preexisting condition? Medicare will cover your preexisting conditions, whether you choose Original Medicare or Medicare Advantage.
- Are you taking medications regularly? If so, you’ll want to make sure the prescription drug plan you’re considering covers all your medicines.
- Are you willing to change pharmacies? Some prescription plans have preferred pharmacies where you’ll pay less for your medicines.
- Do you expect to travel around the country or abroad? Original Medicare will cover you wherever you live but Medicare generally does not provide coverage outside the United States.
- Do you plan to spend more time at your second home? You may not be able to find a Medicare Advantage plan that covers you in both your primary residence and a vacation home.
- Do you live in a rural area? The availability of Medicare Advantage plans is generally more limited in rural areas.
- Are you worried about what you can afford, from premiums to out-of-pocket expenses such as copays, coinsurance and deductibles? When considering whether to select Original Medicare or Medicare Advantage, you’ll want to take into account all these costs and consult the federal government’s out-of-pocket cost calculator, which can help you compare your estimated out-of-pocket expenses.
- Are you eligible for Medicaid or other assistance programs? Medicaid helps low-income Americans get medical coverage and four Medicare Savings Programs also help beneficiaries who cannot afford their out-of-pocket Medicare costs.
- Do you have health insurance through your job or are you covered by your spouse’s plan? If so, you may be able to delay enrolling in Medicare.
- Are you insured through the Affordable Care Act individual marketplace, a retiree health plan, military plan or COBRA (the temporary coverage that people can buy when they leave a job)? If so, you probably still need to enroll in Medicare as soon as you turn 65.
On subsequent pages, our guide can help you fully answer these questions and navigate the Medicare landscape so that you can make the best choices for your health, your lifestyle and your pocketbook.