The Ultimate Guide to Medicare

The Initial Enrollment Period

The initial enrollment period for Medicare lasts for three months before you turn 65, the month of becoming 65, and the three months following. Most people are automatically enrolled and will receive information and the option to turn down Part B in the three months prior to turning 65.

If you are not automatically enrolled, you need to apply for Parts A and B within this seven-month window. Otherwise, you may incur costly late payments which can be permanent.

Enrolling in Part B is the tricky part. If you plan on retiring at 65 or are already retired, simply apply for Part B the same time you enroll in Part A. If you are still working, however, you’ll have to determine the right time to enroll on your own.

The right time can vary dependent on whether you receive financial help through the Health Insurance Marketplace, are on COBRA, working at an employer with 20 or more employees, are a veteran, have a retirement plan, on the Federal Employees Health Benefits Plan, or are entitled to TRICARE for life.

What is important to note is that if you turn down or delay enrollment in Part B Medicare, you might have to pay a 10% penalty for each year for which you qualified but delayed enrollment. This penalty is permanent and begins as soon as you enroll in part B.

You should sign up Medicare Supplement Insurance, Part D, at the same time you enroll in Part B. Again, you might incur a permanent premium penalty for late enrollment.

Enrollment in Part C Medicare Advantage Programs have a bit more wiggle room, since they are provided to you from private healthcare insurance companies.

Paying for Medicare Health Plans

You can receive excellent health care coverage when enrolling in Medicare, however it won’t cover everything. Like traditional health insurance policies from private companies, you will generally be responsible for paying your share of healthcare expenses. Here is what you can expect:

• Premiums: This is a specific monthly rate you pay in exchange for health benefits, the Medicare Supplement policy, and/or prescription coverage. Some people can qualify for help on these payments, but usually this is paid out-of-pocket.

• Annual deductible: This is what you must pay out-of-pocket first for health care and prescription drugs before Medicare insurance starts paying. Be aware that this annual amount can change every year and varies by plan.

• Copayments: Commonly found on Medicare Advantage and Medigap health insurance programs, you might be required to make a copayment for trips to the doctor or whenever you fill a prescription.

• Coinsurance: Similar in theory to copayment but used for Medicare Part B plans. Unlike copayments, the rate you will have to pay is usually a flat percentage.

• Max out-of-pocket limit: This is a yearly limit on how much spending for Medicare services you can make out-of-pocket. Once you reach the maximum limit, your health plan will pay 100% of the cost of covered healthcare services for the rest of the year. This is not applicable for Original Medicare plans.