Exploring your options for Medicare can be intimidating—you might need multiple plans, you have to choose between original Medicare or a private provider, on top of which there are also supplemental plans. Combined with trying to balance your budget and ensure quality healthcare, it’s a serious undertaking. Here are a few tips to help you with the process of finding the best Medicare plan to suit your unique needs.
Know When You’re Eligible
Regardless of when you plan to retire, you can qualify for Medicare at age 65. Here are the stipulations to Medicare eligibility:
- You must be a US citizen or a permanent resident of the US for at least 10 years
- You or your spouse must have worked and paid Medicare taxes for at least 10 years
- You must be receiving Social Security benefits
It is possible to be eligible for Medicare under the age of 65 if you have certain conditions, or have received Social Security Disability Insurance for 24 months. Check out this resource for a comprehensive guide to Medicare eligibility.
Be Aware of Enrollment Periods and Leave Time for Research
You’re eligible to enroll in Medicare up to three months prior to and three months after the month you turn 65. Unless, of course, you have a condition that allows you to enroll prior to 65. The annual enrollment period for all individuals is October 15th through December 7th. While the enrollment periods may seem like more than enough time to choose and apply for your Medicare coverage, it’s always better to be proactive. Researching and selecting the best plans can be a lengthy process.
Bottom line — don’t wait until the last minute when your back is against the wall forcing you to choose plans that might not provide the best value.
Understand the Basics
The types of Medicare plans available can be overwhelming. To get started, there are four main parts to Medicare:
- Part A: Original Medicare hospital coverage includes inpatient care at hospitals, skilled nursing facilities, and hospice/home health services. If you or your spouse have worked and paid into social security for at least 10 years, this is free. If not, your premium depends on the amount of Social Security work credit you have.
- Part B: Original Medicare medical coverage covers doctor and lab visits, outpatient and preventative care, and some home health care. Premiums for Part B are income based. In 2018 those with annual income under $85,000 paid on average $134/month according to US News.
- Part C: Medicare Advantage Plan are plans offered by private health insurance providers. Medicare Advantage (MA) plans typically combines Part A and Part B. Costs depend on provider, region, and beneficiary. MA can also include Part D plans.
- Part D: Prescription Drug Coverage is a plan that covers the cost of your prescription medication. They can be stand-alone plans or added to an MA. Depending on the plan, you may still pay a copayment for your prescriptions.
Beyond these main parts, you can also purchase supplemental plans. Medicare Supplement Plans or Medigap Plans are also offered by private companies. They fill in gaps in coverage by Medicare Part A or B, i.e., copayments, coinsurance, deductibles, or coverage outside your geographic region. Over 20 percent of Medicare beneficiaries purchase Medigap Plans.
Consider Your Lifestyle and Specific Needs
While cost and quality of medical care are important factors when selecting your Medicare plans, do not forget to consider lifestyle preferences. If you travel frequently, you should research out-of-state coverage. Medicare Advantage plans may not cover you outside your geographic region. Supplemental plans offer both out-of-state and international travel-based coverage.
Consider specific health needs – for example, vision or hearing coverage. Part B Original Medicare plans do not cover these items. If you regularly need these services, consider Medicare Advantage plans that cover them, or a supplemental plan.
Individuals who have had employer-provided health insurance their entire career might be used to being on the same plan as their spouse. Family coverage on the same plan is not best practice for Medicare. You both have different healthcare needs and your plans should reflect that. Not to mention you can maximize savings by choosing individualized plans for each person in your household.
Re-evaluate Plans Each Year
Researching Medicare plans is difficult, the prospect of doing it annually at open enrollment can seem daunting. Yet, if you don’t reassess your Medicare coverage each year you can be leaving hundreds (even thousands) of dollars on the table.
Medicare Part D prescription plans and Medicare Advantage plans are the two options that tend to fluctuate the most. Medicare Advantage plans change benefits, provider networks, and premiums every year. Part D plans drop and add drugs. Your specific health needs may also change from the previous year.
While selecting your plan can overwhelming, make sure to do the proper research and take the time to find the coverage that’s best for your needs. There are many resources at your fingertips.