A 65th birthday can be a very exciting time for many with upcoming retirement plans. It is also the time you are eligible for Medicare health insurance coverage. If you still have a plan at work (or you are covered by your spouse's plan), then you can keep that without any penalties. However, if you do not have an employer-provided plan, then you should sign up for Medicare about three months before turning 65.
OK, you've now filed for Medicare, but so many decisions to make! Knowing your ABCDs can help make your decision process a little bit smoother. Part A is hospital insurance (inpatient care at hospitals, skilled nursing facility care, hospice care and home health care). Part B is medical insurance (doctors and other health care providers, outpatient care, home health care, durable medical equipment, preventative screenings, shots, vaccines and yearly wellness visits). Part D is your drug coverage (prescription drugs). A and B is referred to as Original Medicare. Part F, supplemental/Medigap coverage is also available, this helps cover the difference between the expenses reimbursed to providers by Medicare Parts A and B and helps keep the patients costs down.
Wait! What happened to C? Part C is referred to as Medicare Advantage; these are bundled plans provided by private insurance companies that include your hospital and medical coverage and usually prescription drugs (A, B and D). Advantage plans may have lower out-of-pocket costs than regular Medicare, usually require doctor and other services to be in-network, and commonly provide extra benefits such as vision, hearing, dental and gym memberships. Part C plans are offered by private insurance companies at lower rates (sometimes nothing) to you than marketplace or private insurance offerings because your Part B premium (which you still must pay for) helps pays for it. Because co-pays are usually lower and there are caps to how much the patient can pay, Medigap policies are normally not necessary.
Part A may not cost anything if you (or your spouse) have paid Medicare taxes into the system during your working years. If you've worked less than 40 quarters, Part A is offered at a cost to you. If you choose to have Part A -- if it's free why even choose? -- you must also have Part B, which does cost money.
If you are already collecting your Social Security benefits, then you can arrange to have these payments taken directly and not have to worry about missing a payment; if you are not collecting, then you must pay these costs directly to Medicare. If you delay applying for Part A or B and you do not have an existing employer provided health plan (you or your spouse) then you may have to pay a penalty when you do apply.
Barbara D. and her husband have chosen to use Original Medicare: "I wanted to stay with my long-term doctor of 40 years and his recommended referrals, and he does not accept any advantage plans. We consulted with a specialist to choose our Part D prescription plan. This ended up being the best option for us and for my husband's previously treated medical conditions."
Mark E. and his wife chose a local Advantage Plan: "My wife and I had just moved to a new area and needed to look for new doctors anyway. We chose an advantage plan because even with the low monthly insurance cost, we got more benefits and lower co-pays and there is a maximum out-of-pocket cost so we don't need Medigap insurance. Our insurance also covers prescriptions so there is no need for a Part D plan."
Previous medical conditions and the amount you travel may have bearing on whether you choose an Advantage plan (emergencies are always covered anywhere in the U.S.) or Original Medicare. There are some Advantage plans that do not require in-network doctors. In most cases, you can change your plans every year.
To get help deciding, contact your local state-run counseling program via https://www.shiptacenter.org/. You can apply for Medicare at https://www.ssa.gov/benefits/medicare/ or by phone at 1-800-772-1213 from 7 a.m. to 7 p.m., Monday through Friday.