Prepare for Medicare Before You Retire to Keep Your Costs Down

When you enroll in Medicare, you’ll have to make a number of choices to ensure that you have access to the care you need at the best possible price. To evaluate the alternatives you’re eligible for, you can use the “Compare Health Plans and Medigap Policies in Your Area” or “Compare Medicare Prescription Drug Plans” on the Medicare website, www.medicare.gov. You can compare costs, coverage, plan quality, and patient satisfaction using a personalized search tool or registering for a MyMedicare.gov account.

You can apply up to three months before your 65th birthday. If you do, your coverage begins the first day of the month you turn 65. If you enroll in the month you turn 65, coverage begins on the first of the following month. If you enroll within the next three months, there
is a waiting period for coverage. Medicare doesn’t cover any of your Part B bills incurred before
you’re enrolled.

Part A coverage is measured in benefit periods. A benefit period begins the first day you are admitted to a hospital and ends when you’ve been out of the hospital or skilled nursing facility for 60 consecutive days. Each time a new benefit period begins, you’re responsible for the deductible, but there’s no limit on the number of benefit periods for which you are covered.

Part B coverage works on a calendar year basis. If you enroll in Original Medicare, you are responsible for the Part B deductible amount each year. Once you’ve paid the deductible, Medicare covers its share of your eligible medical expenses.

Part C Because Original Medicare Parts A and B don’t pay for all your healthcare costs, you may want to buy a Medigap policy to supplement your coverage and help pay the uncovered expenses, including your deductibles, copayments, and co- insurance. Some plan also cover services that Medicare doesn’t, including medical care outside the United States.

You can choose among a number of plans, identified by letters of the alphabet, from a range of providers. Each plan offers a slightly different combination of benefits, but all plans identified by the same letter offer identical coverage—except in Massachusetts, Minnesota, and Wisconsin. The premiums, however, vary based on the insurer, and some costs are never covered.

You can find more information on the various plans in “Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare,” a booklet you can download from the Medicare website or in “Medicare & You,” which you should receive in the mail each year.

If you select Original Medicare and want coverage for prescription drugs, or Part D, you can join a Medicare Prescription Drug Plan. Private insurance companies run these plans, or PDPs, so the premiums, deductibles, copayments or coinsurance, and the drugs that are covered vary by plan—though each plan must meet Medicare’s basic requirements.

Most Part D plans have a coverage gap, sometimes called the doughnut hole, which means you’re responsible for part of the cost of your prescriptions when the total that you and your plan have spent is more than a certain level but less than a level that’s considered catastrophic. In 2017, those levels are $3,700 and $4,950. However, the gap is being gradually phased out as part of the Affordable Care Act of 2010.

Contributions from the book Managing Retirement Income in this press release are used with permission from Light Bulb Press.