Turning 65? It's Time to Learn About Medicare.
In our first guest blog post, Sharon Wagner of seniorfriendly.info shares some useful knowledge about Medicare. Thank you, Sharon!
Your choice of healthcare coverage might be the most important financial decision you make in retirement. Unfortunately, your Medicare options can be confusing at best. How can you make an informed choice when you don't understand the options?
Selecting Medicare coverage is something many retirees struggle with, which is why we put together this guide to help you understand your health insurance options after 65.
Step 1: Know the Language
Navigating your Medicare options is much harder when you don't understand the verbiage. Before shopping for coverage, read this Medicare dictionary that explains all the different terms you're likely to encounter.
Step 2: Understand the Parts of Medicare
The most important thing to understand as a new Medicare beneficiary is the different parts of Medicare and how they do (or don't) work together.
Original Medicare includes Part A and Part B. Part A covers inpatient hospital services, while Part B covers your outpatient care. Together, these parts pay for most of your doctor's visits and hospital stays. However, you are required to pay deductibles and coinsurance out of pocket.
Part D is prescription drug coverage. It’s not included in Original Medicare, but is frequently purchased to supplement it. Without Part D coverage, Medicare beneficiaries pay full retail price for medications (although discount cards offer some savings).
Medicare Part C replaces Original Medicare. Part C is also known as Medicare Advantage. Unlike Original Medicare, Part C is administered by private companies, which may shrink your network of covered providers. Seniors who enroll in Part C can purchase a Part D plan as well, but many Part C plans include prescription drug benefits so you don’t need to. Part C plans may include other perks like vision, dental, and fitness benefits.
Medigap is Medicare Supplement Insurance. It comes in standardized plans and is a supplement to Original Medicare. The purpose of Medigap is reducing out-of-pocket costs for Original Medicare.
Examine Your Healthcare Needs
Part of what makes Medicare so confusing is that the “best” coverage varies from person to person. A senior who manages one or several chronic diseases has different healthcare priorities than a senior who needs annual checkups, preventive care, and not much else.
Another challenge is anticipating future healthcare needs. While it's possible to change plans, Medicare changes must be made during annual enrollment periods. Even then, it may be impossible to switch to your preferred plan without incurring higher premiums and medical underwriting.
To choose the right plan for you, without a bunch of plan-hopping, consider these factors:
Your tolerance for out-of-pocket spending. Original Medicare offers the lowest premiums but highest out-of-pocket costs. Supplementing Original Medicare with Medigap or replacing it with Medicare Advantage leads to higher premiums and lower out-of-pocket costs.
Your preferred doctors. Under Original Medicare, seniors can see any doctor that accepts Medicare. You can also see non-participating providers, but may incur higher out-of-pocket costs. Medicare Advantage restricts coverage to providers within their network.
Your prescription drugs. Different Part D plans cover different drugs. In order to find coverage for the medications you take, use the Medicare Plan Finder to compare Part D plans.
Your vision, dental, and hearing needs. Original Medicare doesn’t cover vision, dental, or hearing care outside of medically-necessary eye health screenings. Seniors who want coverage for eyeglasses, hearing aids, and routine dental care should consider Medicare Advantage plans or standalone insurance policies.
Still confused? There's a lot to digest when it comes to selecting Medicare coverage, but you don't have to do it alone. Seniors who want help navigating Medicare options should reach out to their State Health Insurance Assistance Program. SHIP employees can help you find the best Medicare coverage for your health and your budget.
-Sharon Wagner, seniorfriendly.info