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Aging into Medicare: A Step by Step Guide

June 6, 2022

Aging into Medicare: A Step by Step Guide

Medicare, as a federal health coverage program, is intended to help provide access to healthcare for those who may not get it through an employer. Often, this means retirement age, which in the United States is age 65. Once you turn 65, you have aged into Medicare eligibility.

If you’re approaching your 65th birthday, it’s important to understand what Medicare options are available to you. While you may be automatically enrolled in Medicare, it’s possible that the default options are not the coverage that’s best for your situation. This guide will answer common questions and help you choose the Medicare plan that’s right for you or your family member. Medicare is for the nation's elderly and certain individuals with qualifying disabilities However this article will focus on those aging into Medicare.

Are you or someone you care about turning 65? Turns out, you’ll be joined by thousands of birthday buddies.

In fact, 10,000 Americans turn 65 every day - a real cause for celebration, whether it’s the milestone of retirement or your journey to the right Medicare coverage.

Still, many Americans are confused by Medicare: how to enroll, when their enrollment period is and what plan to even enroll in. But the process doesn’t need to be so complex. In this guide, we’ll help you understand what you should do when you’re aging into Medicare. Remember that while age is one trigger for being eligible for Medicare, it’s not the only one.

Aging into Medicare: what you need to know

Approaching age 65 may bring a lot of changes into your life. As you look at your Medicare options, you may have some of the questions we address below.

At What Age Should I Start Looking Into Medicare?

Because Medicare can be a complex subject, it pays to start learning early. There’s nothing wrong with beginning to review Medicare rules in your state, along with the available options, in your early 60’s. By the time you turn 64, it’s a good idea to start looking into specific plans.

Your initial enrollment period will start three months before your 65th birthday, include your birthday month, and extend three months afterward. You’ll have unique options in your initial enrollment period that will not happen again, like guaranteed acceptance into a Medigap plan, so it’s important to make the right Medicare plan choices from the very beginning.

Is It Mandatory to Go on Medicare at Age 65?

Many people who turn 65 will be automatically enrolled in Medicare if they are already receiving social security retirement benefits or other retirement payments. It is not mandatory to enroll in Medicare at age 65, but you might pay a financial penalty if you delay your enrollment.

Medicare Part A is premium-free for most people, so there’s no harm in enrolling in that coverage immediately. Medicare Part B, which covers outpatient care, doctor’s visits, and more, does have a monthly premium. If you defer enrollment in Part B because you have a qualifying employer coverage through your job or a spouse, you won’t have to pay a late enrollment penalty when you do sign up for Medicare Part B.

If you do not sign up for Medicare Part B during your initial enrollment and you don’t have qualifying coverage, when you do decide to enroll in Part B you will need to pay a late-enrollment penalty.

Enrollment Periods

As you approach age 65, you’ll want to make a note of the different enrollment periods that affect Medicare recipients. AEP stands for Annual Enrollment Period. You can make any change or update to your Medicare plan each year between October 15 and December 7th. Coverage changes go into effect on January 1. Learn more about annual enrollment periods.

The OEP is the Medicare Advantage Open Enrollment Period, which runs from January 1 to March 31 each year. During this time you can make changes to your Medicare Advantage plan or go back to Original Medicare. You can learn more about Medicare enrollment periods here.

Special Enrollment periods happen due to specific life events. For example, if you move out of a plan’s service area, have a chance to get other coverage, or lose current coverage, you may get a special enrollment period. This guide gives more information about special enrollment periods.

What Happens if You Don’t Enroll in Medicare in Time?

If you don’t sign up for Medicare during your initial enrollment period, you may be penalized with higher premium if you do decide to enroll later. Every year, you may enroll in Part A or Part B during the General Enrollment Period from January - March.

6 Steps for Aging Into Medicare

Now that you know the eligibility requirements and when to enroll, follow these tips to prepare for Medicare enrollment.

1. Make Sure You Qualify For Premium-Free Medicare Part A

Most people qualify for Medicare Part A because of their work history. If you’re a U.S. citizen or permanent legal resident, you qualify for premium-free Part A as long as you have paid payroll taxes for at least 10 years.

Call your local Social Security Office to see if you’re eligible for Medicare Part A. You may receive a paper statement from SSA  as a reference, or you can create an account online at ssa.gov.

What If You Didn’t Work Enough?

You may still qualify for Medicare Part A through your spouse if you don’t (or won’t) have 40 quarters of work history. You’re eligible if your spouse qualifies for premium-free Part A, and:

  • You have been married for at least one year and your spouse is eligible for Social Security benefits.
  • You're divorced and your former spouse is eligible for Social Security benefits. You must have been married at least 10 years, and you must be single now.
  • You’re widowed, but were married for at least nine months, and you are currently single.

If you don’t meet any of these criteria, you can either continue working until you’ve logged 40 quarters, or pay for Part A. For 2022, the Part A premium is $499 per month, but this amount may be reduced if you have some work history.

2. Decide When Need You Medicare Part B

If you are currently employed and you are covered by an employer health plan, and your employer has more than 20 employees, you don’t have to sign up for Part B until you retire and give up your employer-based health coverage.

Many people can’t take full Social Security benefits until age 66, so it’s common to delay retirement by a year. You can delay Part B as long as your employer coverage meets Medicare’s minimum requirements.

But if you work for a small company with less than 20 employees, you’ll probably need to enroll in Part B when you’re first eligible. Be sure to talk about this with your employer before your 65th birthday. There’s no reason to pay the Part B premium until you’ll actually need Medicare.

3. Decide When You’re Taking Social Security

There are a few nuances to receiving Social Security and how it impacts when you can enroll in Medicare Parts A and B:

  • If you take Social Security at age 65, your enrollment in Medicare will be automatic.
  • If you pass on Social Security at age 65, but want to sign up for Medicare, you’ll have to apply for it separately.
  • You can use ssa.gov to enroll if you choose to enroll before your 65th birthday.
  • If you wait until after you’re 65, you’ll have to visit a Social Security office to sign up for Medicare.

4. Know Which Doctors You Want To See When You Have Medicare

Make sure the doctors you see, or want to see, accept Medicare. Finding out ahead of time can help you avoid surprises.

If you plan to move during your retirement, it’s wise to get recommendations for doctors in your new hometown and see if they accept Medicare patients.

5. Get A Firm Understanding Of Your Medications

When it comes to medications and aging into Medicare, there are 3 steps to take:

  • You should always know your medications and their doses.
  • Talk to your doctor about generic versions of your prescriptions to reduce costs.
  • Find out if your doctor thinks you might need a new or different medication in the future.

6. Understand The Gaps In Original Medicare

Medicare doesn’t cover 100% of your health care costs. Instead, you’ll pay a portion out of your own pocket. The costs you pay for Part A differ from what you’ll pay for Part B.

Gaps In Medicare Part A

Part A will cover you for inpatient type of events, like:

When you have a hospital stay, you’ll have to pay the Part A deductible. For 2022, the deductible is $1,556. You’ll pay this inpatient hospital deductible each time you are admitted to the hospital, provided you haven’t received hospital or skilled nursing facility services within the previous 60-day benefit period.

Gaps In Medicare Part B

Part B of Original Medicare covers the services you’d receive in an outpatient setting, including:

  • Doctors and therapy appointments
  • Lab work and diagnostic imaging
  • Outpatient surgeries
  • Medical equipment like oxygen machines
  • Some cancer treatments like chemotherapy

When you use Part B coverage, you can expect to pay out of pocket for each service. Your share of cost can include:

  • Part B deductible: $233 for 2022 (you only pay the Part B deductible once each year).
  • Part B coinsurance: 20% of the cost for each service or procedure.
  • Part B excess charges: Up to 15% of the Medicare-approved charge if your doctor does not accept the Medicare-approved amount for a service (known as Medicare assignment).

The biggest Part B expense is the 20% coinsurance, which you’ll pay throughout the year. There are other costs you can expect to pay out of pocket with Original Medicare, including things like dental care, eye exams, hearing aids, and more.

Keep in mind that there is no cap on how much you can spend out of pocket with Original Medicare.

How To Find The Right Medicare Plan For You

Make sure any Medicare plan you consider:

  • Covers the doctors you want to see
  • Covers the medications you need
  • Has a premium you can afford

You can also narrow your choices down further by asking yourself:

  • Do I intend to split my time between two or more States?
  • Am I comfortable with an HMO-type arrangement, or using a set group of doctors and facilities?

If you spend a lot of time travelling or living in a second home, you’ll want to consider Medicare Supplement Insurance. But if you’re comfortable with a particular HMO-type medical group and plan to live in one place, then Medicare Advantage could be right for you.

Your Options Beyond Original Medicare

There are Medicare plans available that help close the coverage gap of what Original Medicare doesn’t cover. They include:

Medicare Advantage Plans

Medicare Advantage plans, also known as Medicare Part C, is a contract between a private insurer and Medicare. These plans must cover everything that Original Medicare covers.

Medicare Advantage plans work like traditional private health insurance, so you may see certain out-of-pocket costs with Medicare Advantage, including:

  • Monthly premium: Many Part C plans don’t have a monthly premium.
  • Annual deductible: Most plans don’t have a deductible.
  • Copayments or coinsurance for services and procedures.

Medicare Advantage plans also offer a number of added benefits, which vary by state and health plan. Some benefits include:

Medicare Advantage plans can also provide emergency coverage outside the United States. With the international coverage, out of pocket maximum protection, and a wide range of extra benefits, you can see why many people choose Medicare Advantage plans.

Prescription Drug Plans

Prescription Drug plans (PDPs or Medicare Part D) help with the cost of prescription drugs. Each company creates their PDPs differently, but you can expect to pay these costs for coverage:

  • Monthly premium, which varies based on income
  • Annual deductible (although many plans don’t have a deductible)
  • Copayment or coinsurance per filled prescription

The copayments and coinsurance costs increase as the total amount your plan pays rises above certain thresholds, also known as coverage stages:

Coverage Stage 1 – Deductible Stage: You pay full price until you’ve spent $480 (for 2022).

Coverage Stage 2 – Initial Coverage Stage: You pay small copayments or coinsurance for each prescription.

Coverage Stage 3 – Coverage Gap Stage: Also known as the Medicare “Donut Hole.” Once your total drug costs (what you’ve paid plus what your plan has paid) exceed $4,020, you hit the coverage gap. You’d then pay 25% of the cost of prescriptions.

Coverage Stage 4 – Catastrophic Stage: Once your total drug costs (excluding what your plan has paid) exceed $6,350, you pay no more than 5% for medications

These coverage stages reset on January 1 each year. But it’s important to know that there is no out-of-pocket cap on drug costs under Part D.

Click the link if you want to more about the phases of Medicare Part D.

Medicare Supplement Insurance

Medicare Supplement Insurance, also known as Medigap, is designed to fill the gaps in Original Medicare. Medigap supplements Original Medicare by paying some or all of the expenses that you’d normally have to pay out of pocket.

Medigap policies are issued in 10 standardized plans: A, B, C, D, F, G, K, L, M, and N. Each of these plans cover a slightly different portion of the Original Medicare gaps.

Plan G is a popular Medigap option that covers every gap except for the Part B deductible. If you have Plan G, you can expect to pay for the first $198 in Part B expenses (like doctor’s visits). Plan G will then cover every penny of any Medicare-approved service or procedure.

Several Medicare supplements provide some international coverage, including plans C, D, F, G, M, and N.

Medigap plans also give you maximum flexibility, so you can see any doctor or use any facility that accepts Medicare patients, anywhere in the United States. You’re not bound to a network, or reliant upon referrals.

Medicare Supplement Insurance plans don’t cover prescription drugs, so you’ll need to enroll in a stand alone Prescription Drug plan to get drug coverage.

Considerations Before Choosing A Plan

Make sure any Medicare plan you consider:

  • Covers the doctors you want to see
  • Covers the medications you need
  • Has a premium you can afford

You can also narrow your choices down further by asking yourself:

  • Do I intend to split my time between two or more States?
  • Am I comfortable with an HMO-type arrangement, or using a set group of doctors and facilities?

If you spend a lot of time travelling or living in a second home, you’ll want to consider Medicare Supplement Insurance. But if you’re fine with HMO-type medical groups and plan to live in one place, then Medicare Advantage could be right for you.

As you approach age 65, it’s important to start your research sooner rather than later. Make sure you know what plans your doctors will accept, and which plans cover your medications.

Comparing Medicare plan features and costs doesn’t have to be complicated though. You can get Medicare quotes through our site. Or you can call 800-620-4519 to reach one of our licensed Medicare agents who can guide you through your Medicare plan options.

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