In an aging population, one of the most important aspects of financial readiness is attention to healthcare costs. Being savvy about the basics of the Medicare system can save you and your family a great deal of money if you are prepared to spend a bit of time understanding the system.
Individuals enroll in Medicare during a seven-month period that begins three months before the month they turn 65 and continues until the end of the third month following the month they turn 65. Those who took Social Security benefits before age 65 will automatically be enrolled in Medicare Parts A & B. If the person is still covered by spousal employment, they may not need to sign up for and take Part B. But don’t under any circumstance choose not to sign your family member up for Part B unless you have been assured that they do not need it.
Those who haven’t signed up for Social Security benefits need to sign up for Medicare A and B (if they are not otherwise covered through employment) when they turn 65, even though full Social Security benefits don’t begin until age 66. Those who don’t receive Social Security will be billed quarterly for their Part B premium. As a caregiver, it is very important that you make sure these premiums are paid. If a payment is not made within three or four months, the individual will lose their Medicare coverage.
Much of the Medicare signup can be done online. The website www.ssa.gov can give you step by step information about signing up.
Medicare Parts A and B (often referred to as “Original Medicare”) offers coverage for hospital visits (with a deductible) and doctor’s visits (with a deductible and 20% copays.) Individuals who go to the doctor frequently will want to arrange for extra coverage through either a “Medigap” policy (a fee-for-service policy that covers gaps in Medicare) or a managed care policy, known generally as a “Part C plan” or a “Medicare Advantage Plan,” unless their former employer provides coverage.
A Medigap policy with an additional Part D prescription drug benefit gives the most flexibility and can potentially cover all your family member’s medical costs, including copays, deductibles and care outside of the United States. Medicare Advantage plans, which use managed care, can save money, especially if your loved one doesn’t travel out of their local area.
The local SHIP (State Health Insurance Program) counselors can give you advice about initial enrollment in Medicare, but are especially helpful when it comes to figuring out which “path” you want to follow for extra coverage – Medigap or Medicare Advantage. Contact them through your local Area Agency on Aging, senior center or 1-800-MEDICARE (800-633-4227).
Internet resources, like the National Council on Aging site, can also provide assistance and save you time. Talk to a counselor and do your research so that you will be prepared to make the most of this year’s Medicare Open Enrollment period which runs from October 15 through December 7.
Good luck! Give yourself a pat on the back for being willing to guide your loved one through a process that they may find confusing.