newsfeedback@fool.com (Matthew Frankel)
Jun 30, 2018
Medicare covers, or
will eventually cover, virtually all American workers, but this massive
healthcare program isn't well understood by millions of people. Many don't know
when they will become eligible for Medicare, what it covers (and doesn't), and
what it costs. With that in mind, here are seven frequently asked questions
about Medicare and the answers to each.
1. When can I get Medicare benefits?
Unless you're
disabled, the answer is 65 years old. A common misconception among Americans is
that you can get Medicare as soon as you claim Social Security benefits, which can be as early as age 62.
Unfortunately, even if you retire early and claim your Social Security benefit
early, you'll have to wait until 65 before you'll be covered for Medicare.
Image Source: Getty
Images.
2. How do I apply for Medicare?
You may not have to.
If you're already receiving Social Security retirement benefits when you turn
65, you'll be enrolled in Medicare automatically. If this is the case, you'll be
automatically enrolled in Parts A and B of Medicare (more on the parts in a
bit), and you can expect to receive your Medicare benefits card about three
months before you turn 65.
If you aren't
receiving your Social Security retirement benefit when you turn 65, you'll have
to apply for Medicare, which you can do quite easily on the
Social Security Administration's website. Your initial enrollment period begins
three months before the month of your 65th birthday and extends for three months
after.
3. What are the "parts" of Medicare?
There are four
"parts" of Medicare. Here's a quick rundown, along with links to
learn more about each part:
·
Part A is Hospital Insurance, or HI. This primarily
covers hospital stays and some stays in skilled nursing facilities.
·
Part B is Medical Insurance. This covers doctors' visits,
lab tests, and outpatient procedures, just to name a few.
·
Part C is Medicare Advantage. These are plans offered by
private companies to provide Medicare benefits.
·
Part D is Prescription Drug Coverage. This is optional
for beneficiaries.
Parts A and B are collectively
referred to as "Original Medicare," and are generally what's being
referred to when I use the term Medicare.
4. How much does Medicare cost?
Medicare Part A is
free for the vast majority of American seniors, but has a deductible of $1,340
per benefit period, as well as coinsurance requirements if your hospital stay
lasts more than 60 days or if your skilled nursing stay extends beyond 20 days.
Medicare Part B has
a monthly premium. For 2018, the standard monthly premium is
$134, but high-income seniors pay significantly more than this. At the high
end, seniors with incomes over $320,000 (joint tax return) or $160,000
(individual) have to pay $428.60 per month. In addition, Medicare Part B has an
annual deductible of $183 for 2018.
Part D, prescription
drug coverage plans, come with an average monthly premium of $35.
5. What does Medicare not cover?
One of the most
important things for seniors to know is what Medicare doesn't cover. While this isn't an exhaustive
list, Medicare doesn't cover long-term care, dental care, eye exams or glasses,
dentures, acupuncture, hearing aids, and routine foot care.
This list is what
Original Medicare (Parts A and B) doesn't cover. Certain Medicare health plans
may cover some of these services.
6. What is Medigap?
Since there are many
copays and deductibles, private insurers sell Medicare Supplemental Insurance
Plans, or Medigap plans. There are 10 different varieties of Medigap
plans, with Medigap Plan F (the most comprehensive) the most commonly chosen
option. While Medigap plans are standardized in terms of the coverage they
provide, costs can vary significantly.
7. I have health insurance already through an employer. Do I
have to enroll in (and pay for) Medicare at age 65?
It depends what kind
of health insurance you have. If you have insurance through your employer or
your spouse's employer and the primary insured is still working, you may not be required
to enroll in Medicare as long as the company sponsoring your coverage has at
least 20 employees. In this case, you'll have a special enrollment period after
you (or your spouse) retire or leave that employer.
On the other hand, if
your insurance is through an employer you've already retired from, you still
have to sign up at 65. If you are required to sign up for Medicare Part B, and
don't, you'll face a permanent penalty of 10% of the Medicare Part B premium
for every year you were supposed to enroll but didn't.
It's also worth noting
that since Medicare Part A is free, it generally doesn't make sense to delay
signing up for it, even if you're not required to. Your employer's insurance
will be your primary coverage, and Medicare will be secondary. However, since
Part B comes with a premium, it does make sense to wait if you're still covered
by your employer's plan.
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