What you need to know about choosing a Medicare plan
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What you need to know about choosing a Medicare plan
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As we get older, we get wiser—or so the saying goes. But when choosing the right Medicare plan, making a wise choice can be a big challenge. That’s because Medicare is complex to navigate. It has different parts, options, enrollment windows, deadlines, and potential penalties if you sign up late. Given all that, TD Bank outlines four aspects that may help you make your decision.
Know your ABC’s
Simply put, Medicare provides U.S. federal health insurance for people aged 65 and over. You can see any doctor or seek care in any U.S. hospital that accepts Medicare patients. Also, you can apply earlier for Medicare if you have a disability or other conditions.
Medicare has four parts:
Part A covers inpatient hospitalization, lab tests, surgery, post-op skilled nursing, some home care needs, and hospice.
Part B includes outpatient services, such as doctor visits and diagnostic tests.
Part C, also called Medicare Advantage and offered by third parties, combines Parts A and B, often including Part D.
Part D pays part of prescription drug costs. The Centers for Medicare & Medicaid Services (CMS) created a video called Get Started to help explain the differences.
Do your homework
Visit Medicare.gov to educate yourself with the wealth of information resources found there. One is the official “Medicare & You” handbook, a 128-page guide available in several languages and formats. You can either download the version you prefer or order a paper copy sent to your home.
The first choice you need to make in setting up Medicare for yourself, your spouse or partner, or another loved one is deciding on which part of Medicare would best meet your needs.
Next, make a list of your doctors and prioritize those you want to keep seeing after enrolling in Medicare. Many accept Medicare but double-check with their offices to be sure. If you choose the Part C Medicare Advantage route, check if your doctors are in the insurer’s network. Similarly, make a list of your prescription drugs to help you evaluate Part D drug plans.
Also, consider your lifestyle when choosing your Medicare plan. Will you be dividing your time between seasonal residences? Will that take you outside the U.S. part of the year? Medicare coverage won’t follow you, so you’ll have to arrange for health insurance abroad. You should consider including medical evacuation coverage if an accident or sudden illness requires your return to the U.S. for care.
Watch your costs
While Medicare will pay a significant share of your hospital (Part A) and medical services costs (Part B), it’s not free. You’ll have out-of-pocket premiums, deductibles, and copays to cover. If you worked for at least 10 years and paid Medicare taxes, you won’t pay a Part A premium, but it does have an annual deductible—$1,556 for 2022—plus coinsurance charges for inpatient hospital stays. In addition, the standard Part B premium for 2022 is $170.10 with a $233 annual deductible, plus co-pays. These costs typically rise each year with inflation, and other costs may apply.
If you sign up for Original Medicare, you can buy a “Medigap” policy from a private insurer to pay for some of these other costs. Of course, you must pay a monthly premium for this insurance, but it can help you contain your costs to a ballpark amount each year.
Alternatively, you can sign up for a Part C Medicare Advantage plan, covering Parts A and B, often including Part D plus other services like dental and vision care. You still must pay your Medicare Part B premium in addition to the Medicare Advantage plan’s premium.
Enroll early
If you’re already taking Social Security before your 65th birthday, you’ll be automatically enrolled in Medicare as you approach that birthday. If you’re not taking Social Security yet, you can enroll as early as three months before your 65th birthday and as long as three months after your birthday month—a seven-month window. You can enroll early to avoid delay, so you’re covered starting on your 65th birthday.
If you’re still working and covered by your employer’s or spouse’s employer’s private health plan, you can wait to enroll in Medicare until after you or your spouse are retired or have left the company and aren’t covered any longer. After your workplace coverage ends, you have two months to sign up for Part D and eight months for Part B. If you miss the enrollment window for either, a penalty may be added to your monthly premium.
This story was produced by TD Bank and reviewed and distributed by Stacker Media.
