Thinking about enrolling for Medicare? Here are five important facts about Medicare that every retirement-age American must know.
Medicare Comes at A Cost
Medicare has several parts. Part A covers hospital stays and skilled nursing home care, while Part B covers physician visits and other services not covered by Part A. Part A is free for most people, but Part B comes with a price tag. Part D offers prescription drug coverage and has a monthly charge.
A Medigap Plan Can Help Fill Medicare’s Coverage Gaps
Beneficiaries of Medicare should ideally sign up for a Medigap supplemental insurance plan that is offered by private insurance companies to help cover co-payments, deductibles, and other gaps.
Medicare Advantage Is a Good Option for Those Who Need an All-In-One Plan
People can choose to sign up for traditional Medicare, which includes Parts A, B, and D, along with a supplemental Medigap policy. Or they can choose to get Medicare Advantage instead, which provides coverage through private insurers. Medicare Advantage plans also typically offer prescription drug coverage. Like traditional Medicare, Medicare Advantage plans also have co-payments, deductibles, and other such out-of-pocket expenses. That said, Advantage plans usually charge lower premiums.
Signing up For Medicare
Those who receive Social Security benefits will be enrolled automatically for Parts A and B. People can choose to turn down Part B since it comes at a cost. Those who have not started Social Security, however, will need to sign themselves up for Original Medicare. The enrollment period for traditional Medicare begins three months before one turns 65 and ends three months after their birthday. If one is still employed at the time of turning 65, they may be able to delay signing up for Medicare. However, it is important to enroll within eight months of losing the employer’s coverage in order to avoid penalties.
Those with A High Income Will Pay More for Medicare
Those who have an annual income that is above a certain threshold will pay more for Medicare Parts B and D. These surcharges are essentially based on one’s adjusted gross income from the previous two years.
