Everyone wants the secret code to making life easier. People talk about “hacks,” or shortcuts to doing things better, or more efficiently.
Medicare is no different, and as a complicated behemoth of government regulations, it can be daunting to navigate, especially if you’ll soon be turning 65 and relying on it to pay your medical bills. But there is help – here are 5 rules in Medicare that you need to know by heart in order to fully understand how it works.
Know when to apply for Medicare. If you or your spouse has worked at least 10 years, you’ll qualify to receive coverage under Medicare when you turn 65. You can apply for coverage starting at the beginning of the month 3 months prior to your birthday month, until the end of the month 3 months after your birthday month. It pretty much makes sense for everyone to apply for Medicare Part A – that’s the part that covers the cost of hospitalization – as soon as you turn 65.
Part B, or medical insurance (doctor’s visits, diagnostic testing, outpatient services) will cost you a monthly premium, so if you have other coverage (such as through your employer) you might consider postponing signing up for Part B. You can still sign up later when your other coverage ends.
Know the penalties for applying late. You won’t pay a penalty for applying after your deadline for Part A (but why wait, since it’s free). However, if you postpone signing up for Part B and you can’t prove that you had other coverage during that time, you’ll pay a penalty for the rest of your life. The penalty is an increase of 10% for each 12-month period you go without coverage. Also, if you miss your initial enrollment period for a Part D prescription drug plan, you’ll pay a penalty once you sign up for that, too.
Understand the difference between a Medicare Advantage plan and Medicare. Medicare Advantage plans are administered by private insurance companies. They essentially provide all of the benefits of original Medicare, and are typically available at very low monthly premiums. Unlike traditional Medicare, Medicare Advantage plans have limits on how much you pay out-of-pocket for certain expenses, and they also have different copayments and deductibles that are designed to save you money. However, they are typically administered within a Health Maintenance Organization (HMO), so your choice of doctors and hospitals is restricted.
Understand the rules about when you can change your coverage. During the Annual Enrollment Period (typically October 15 through December 7), you can go from Medicare to a Medicare Advantage plan, or you can switch from one Medicare Advantage Plan to another. You can also change to a different Part D prescription drug plan during that time as well.
If you decide to stay with Medicare, but purchase a Medicare supplemental plan to pick up the extra costs that Medicare doesn’t pay – and you should definitely consider this – you can switch between policies, or purchase a policy at anytime. However, the only time you’ll be able to sign up for a Medicare supplemental plan without regard to your current health status is during your Initial Enrollment Period. After that, you’ll have to qualify for coverage based on your health status, and if you’ve got significant health problems you might not be able to qualify.
Know what your rights are with respect to disputes over claims. There’s a lengthy process designed to protect your rights to appeal a claim that was denied, or paid unfairly, by Medicare, a Medicare Advantage plan, or a Part D prescription drug plan. The claims and appeals process is detailed on Medicare.gov. Click here to read more about how it works.
Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage. For more information visit www.MediGapAdvisors.com.