How Do I Know What Medicare Coverage Is Right For Me?

The answer to this may be easy to say but maybe not as easy to do. You need to understand your personal health care needs and choose Medicare coverage to help meet them. For example, if you take prescription drugs right now, when you get Medicare, you need to make sure you get Part D prescription drug coverage through either a stand-alone Part D plan or a Medicare Advantage plan.

Medicare is health insurance for people 65 or older. You’re first eligible to sign up for Medicare 3 months before you turn 65. You may be eligible to get Medicare earlier if you have a disability, End-Stage Renal Disease (ESRD), or ALS (also called Lou Gehrig’s disease).

Parts of Medicare

Part A
(Hospital Insurance): Helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care.

Part B (Medical Insurance):
Helps cover:

Services from doctors and other health care providers
Outpatient care
Home health care
Durable medical equipment (like wheelchairs, walkers, hospital beds, and other equipment)
Many preventive services (like screenings, shots or vaccines, and yearly “Wellness” visits)

Part D (Drug coverage):
Helps cover the cost of prescription drugs (including many recommended shots or vaccines). You join a Medicare drug plan in addition to Original Medicare, or you get it by joining a Medicare Advantage Plan with drug coverage. Plans that offer Medicare drug coverage are run by private insurance companies that follow rules set by Medicare.

Medicare Supplemental Insurance (Medigap):

Extra insurance you can buy from a private company that helps pay your share of costs in Original Medicare. Policies are standardized, and in most states named by letters, like Plan G or Plan K. The benefits in each lettered plan are the same, no matter which insurance company sells it.

How Much Does Medicare Cost?

You will likely pay the Part B premium to Medicare. Beyond that, you may pay other premiums, deductibles, co-pays and co-insurance. The total amount you pay will depend on the type of Medicare plan(s) you choose and the health care services you use during the year.

The amount you’ll pay depends on the coverage you choose, the health care services and benefits you use during the year, and if your insurance plan has rules about network vs out-of-network costs.

Costs you may pay with Medicare

Medicare Part B and most Medicare Part C, Part D and Medigap plans charge monthly premiums. In some cases, you may also have to pay a premium for Part A. A premium is a fixed amount you pay for coverage to either Medicare or a private insurance company, or both.

You’ll also pay a share of the cost for your care, while your Medicare or Medigap coverage will pay the rest. There are three methods of cost-sharing:

Deductible

A set amount you pay out of pocket for covered services before Medicare or your plan begins to pay.

Copay

A fixed amount you pay at the time you receive a covered service or benefit. For example, you might pay $20 when you visit the doctor or $12 when you fill a prescription.

Coinsurance

The amount you may be required to pay as your share for the cost of a covered service. For example, Medicare Part B pays about 80% of the cost of a covered medical service and you would pay the rest.

Medicare When Working Past Age 65

You first become eligible to enroll in Medicare around age 65. But if you plan to keep working or have employer health coverage through a spouse, you have some options to consider before signing up for Medicare. Here you’ll find the resources and tools you need to help learn about your Medicare enrollment options, and to make confident decisions about getting or delaying Medicare coverage.

If an employer has 20 or more employees, generally you can choose to delay Medicare enrollment, drop your employer coverage for Medicare, or have both Medicare and employer coverage.

If an employer has fewer than 20 employees, generally you will need to enroll in Medicare during your Initial Enrollment Period.

If you have health coverage through a spouse’s employer, what you can do will depend on the employer’s rules. You may be able to delay or you may need to enroll at age 65.

Even if you plan to keep working, you still have a 7-month Initial Enrollment Period (IEP) when you turn 65.

Delaying Medicare Parts A & B
If you qualify to delay both Medicare Parts A & B, you can do so without penalty as long as you enroll within eight months of either losing your (or your spouse’s) employer coverage or ceasing to work, whichever comes first. You will enroll during a Special Enrollment Period and will need to also provide written proof of creditable drug coverage to avoid Part D penalties.

Enrolling only in Part A
Medicare Part A is usually premium-free for most people, so you could opt to enroll in only Part A while still working. However, if you have a health savings account (HSA), be aware that once you enroll in any part of Medicare you cannot continue to make contributions to your HSA.

Having creditable drug coverage
Before you officially delay Medicare, make sure you have creditable drug coverage. This means your employer drug coverage is at least as good as the standard Medicare Part D plan coverage. If your employer’s drug coverage isn’t creditable, you will need to enroll in a Part D plan during your Initial Enrollment Period to avoid the Part D late enrollment penalty. Consequently, you’ll also need to get either Part A or Part B in order to get a Part D plan.

Do I need to notify anyone if I’m delaying Medicare?
You don’t need to provide notice that you’d like to delay enrolling unless you’re receiving Social Security or Railroad Retirement Board benefits. If you are receiving either, you’ll be automatically enrolled in Medicare Parts A & B when you turn 65, and you’ll need to let Social Security know you wish to delay Part B. By law though, if you receive Social Security benefits and are eligible for Medicare, you must also have Medicare Part A.