There were over 60 million people covered by Medicare in 2016, and this number is only growing. Medicare is a federal program that provides essential coverage for your health needs as you age. While this program has helped millions find affordable coverage, there are still a lot of misunderstandings about how this coverage works.
Because it’s important to understand Medicare plans and your options before your enrollment period, we’ll review everything you should know in this guide. Are you ready to provide for your health needs? Let’s find out.
There Are 4 Parts to Medicare
The first thing you need to know is that there are 4 parts to Medicare. This isn’t like a traditional insurance policy where you purchase a single plan usually though your employer. There are 4 parts to Medicare that all provide different coverage.
- Medicare Part A – This covers your hospital care, inpatient care, nursing home care, and some home healthcare.
- Medicare Part B – Part B covers your outpatient routine care like doctors visits, screenings, preventative care, and so on. Medicare Parts A and B are usually called traditional Medicare.
- Medicare Part C – Also known as Medicare Advantage, Part C is when you get a plan from a private insurer who follows the Medicare guidelines. Learn more about Medicare Advantage Plans
- Medicare Part D – Finally, Part D covers prescription drugs. It’s usually combined with other Medicare plans, but it can also stand alone.
Who Is Eligible for Medicare?
Most Americans are eligible for Medicare once they reach 65 years of age, as well as those with end-stage renal disease or other qualifying disabilities. In order to be eligible, you or your spouse needs to have worked and paid Medicare taxes for at least 10 years.
If you or your spouse hasn’t worked enough years towards Medicare taxes, you can buy into Medicare Part A as long as you’re a citizen or permanent resident. Even if you paid into Medicare, you’ll still need to pay premiums for Part B coverage.
You Need to Enroll in Medicare
Most people need to manually enroll in Medicare coverage during their enrollment window. The only exception to this is if you were already receiving Social Security benefits at age 65. In this case, you’ll be signed up automatically for Medicare Parts A and B.
If you’re not receiving Social Security benefits, you’ll need to sign up on you brown. Your enrollment window for Medicare begins 3 months before your 65th birthday and ends 3 months after. If you wait to sign up, you could be fined a Medicare penalty for the rest of your life.
You Can Change Coverage
Once you initially sign up, you aren’t forced into the same coverage year after year. During the open enrollment period for Medicare which runs from October to December, you are able to make any changes to your coverage.
During this period, take some time to consider your healthcare needs. Once you make your decision, you won’t be able to change your coverage again for an entire year, so make sure it’s something that works for you.
You’ll Still Need to Pay for Care
Finally, make sure you save for your healthcare in retirement. Despite Medicare being an affordable way to access coverage, you’ll still need to pay regularly out-of-pocket. Aside from your Part B or Medicare Advantage monthly premiums, you’ll also need to pay for copayments and other fees.
In general, Medicare covers 80% of treatment. You’ll be left to cover the remaining 20%, so that’s why it’s essential to prepare for retirement with the right medical savings.
Preparing for Retirement
Approaching your retirement years should bring you relief. You’re getting close to a time of relaxation and focusing on things you love. However, before you kick back and relax, make sure you’re also preparing for your health.
Now that you know these essentials about Medicare, you’re ready to make a smart decision when it’s time to enroll. Medicare has earned a reputation for being complicated, but it doesn’t have to be.