Here’s everything you need to know before the Annual Enrollment Period (AEP) ends on December 7.
Also referred to as Original Medicare because it is Medicare offered by the federal government to U.S. citizens who are 65 and older, or younger with a qualifying disability. Medicare has two distinct parts: Part A and Part B. Together, they can help cover some (about 80%) of Medicare approved hospital costs and doctor visit expenses.
There are also Medicare plans offered through private insurance companies: Part C (or Medicare Advantage plans) and Part D (prescription drug plans). To enroll in either Medicare plan you must first enroll in Original Medicare.
You qualify for Original Medicare if:
Medicare’s Annual Enrollment Period (AEP) runs from October 15 to December 7 each year. During this time, all Medicare eligible individuals, if they have Original Medicare, can change plans or enroll in a Medicare plan for the first time, if they missed the opportunity during what’s called their initial enrollment period (3 months before, the month of and 3 months after your 65th birthday month).
Outside of AEP, there are a few other opportunities to enroll or disenroll in a Medicare plan.
It’s a good idea to review your healthcare needs every year to be sure your coverage still works for you, your prescription drugs are covered, and the plan fits your budget. If you need to make changes you can do so during AEP.
Medicare “Part A” and “Part B” are often called “Original Medicare”.
To enroll in a Medicare plan you need Part A and B. Most people are automatically enrolled in Original Medicare Parts A. For most it comes with no monthly premium. If you’re still working and have health insurance you could wait to enroll in Part B. If you want extra benefits beyond what Original Medicare offers and/or you need prescription drug coverage you should review what Medicare Advantage (Part C) plans are available in your area. Many include prescription coverage. When you become eligible for Medicare you need to be sure you have a health plan with what’s called creditable prescription drug coverage to avoid penalties.
Some key differences between Original Medicare and Medicare Advantage are:
Some people are automatically enrolled in Original Medicare (Parts A & B).and you can decide to wait to accept Part B benefits. Visit medicare.gov to find out more or call 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week.
Usually, if you don't sign up for Part B when you're first eligible, you'll have to pay a late enrollment penalty. Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn't sign up.
Medicare Supplement Insurance, sometimes called “Medigap”, helps pay the 20% of Medicare covered costs that Original Medicare doesn’t pay. You must have Medicare Part A and Part B to sign up for a Medigap policy.
A Medigap policy is not the same as a Medicare Advantage plan-- it is not an all in one plan. It’s a separate plan to fill in the gaps of Original Medicare and does not include prescription drug coverage. If you need drug coverage with a Medigap plan you would need to also enroll in a Part D prescription drug plan. You cannot have both a Medicare Supplement Plan and a Medicare Advantage plan.
An HSA or “Health Savings Account” is a pre-tax savings account that you can use to pay for medical costs.. Once you enroll in Medicare Part A and/or B, you can no longer contribute to your HSA. However, you may continue to withdraw money from your HSA after you enroll in Medicare to help pay for medical expenses. If you use the account for qualified medical expenses, funds distributed are tax-free.
Author: Stephanie Sample
November 18, 2018