As you reach the age of 65 and the possibility of retirement, it is time to start thinking about your healthcare. The first question that usually comes up is: What is Medicare? You might also have questions about the coverage provided by Medicare or when you will qualify for coverage. Get your questions answered early so that you don’t miss the important enrollment dates and coverage eligibility.
What is Medicare?
Medicare is a health insurance program that was established and signed into law by Lyndon B Johnson in March of 1965. The purpose of Medicare was to provide a health care option for those that were reaching the age of 65 and no longer eligible for an employer’s health plan. The coverage was also extended to include those that are disabled and receiving social security benefits.
Navigating the rules of eligibility, enrollment and what exactly is covered can be confusing. There are resources available to help those that are eligible for coverage. Websites such as www.medicare.gov can help provide a better understanding of the coverage available and how and when to apply for coverage. An extensive description of each part of Medicare and the benefits included, how and when to sign up, and who is eligible is included in this website.
There are basically three major parts of Medicare coverage. Each part covers different aspects of your overall health insurance needs so all parts are generally purchased together to ensure no gaps in coverage.
Medicare Part A is the portion of Medicare provides comprehensive coverage for most of the large ticket claims such as hospital care, skilled nursing facility care and home health services. States may have specific rules as to where and how Medicare treatment will be received but all states must meet the original Medicare guidelines set by the federal government. There is generally an additional small premium for this portion of coverage.
Medicare Part B is responsible for the day to day basic health care situations including lab tests, surgeries and doctor visits. Part B will also cover things such as preventative care, durable medical equipment and mental health coverage.
In 2006, Medicare Part D was established to cover out-patient prescription drug coverage for all recipients of Medicare. There is an extra premium for this coverage. Several different drug plan options are available to meet all recipients’ needs.
You might be asking why did we skip “C?” Well Medicare Part C is a little different. Medicare Part C, mostly called “Medicare Advantage” referred to Medicare-approved private health insurance plans. We’ll cover Medicare Part C plans more in a later blog post.
Medicare A & B coverage is available on the first day of the month in which you turn 65. Medicare benefits are also available to those under age 65 if deemed disabled by the Social Security office. However, there is a 24 month waiting period from the date of being deemed disabled until Medicare eligibility is available.
Even if you are still fully employed and enrolled on a company medical plan you are still generally eligible to enroll in Medicare when you reach the age of 65. When private coverage is involved there will be a coordination of benefits between the private carrier and Medicare. One insurance carrier will be considered primary and the other will be the secondary coverage. The federal government has very specific rules as to how coordination of benefits will be handled between a private insurance company and Medicare. Generally the determination is based on the size of your employer. If your employer employs 20 or more employees then your private carrier will be the primary payer. If your employer employs less than 20 employees Medicare will be the primary payer. There are special situations where other requirements may be followed.
Although you are eligible to enroll in Medicare when your first turn 65, you may choose to wait, especially if you have coverage through an employer. You will have opportunities to enroll after your period. Each year there is a general enrollment period for Medicare in which applicants can enroll for coverage between the dates of January 1st and March 31st. During the yearly open enrollment your coverage will not begin immediately as it would if you had enrolled when first eligible. Instead your coverage will begin on July 1st.
There are also special enrollment periods that apply to those that didn’t enroll when first eligible because they were still employed and chose to stay on their employer’s plan. You are eligible to sign up at any time while you are still working or you have an eight month period after you terminate your employment to enroll. You will generally not have to pay any kind of penalty for late enrollment if you qualify for a special enrollment period.
Medicare coverage is an important benefit for those 65 and older or those disabled by social security. It will give you the benefits necessary to cover any health conditions that may develop in your elder years.