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Enroll in Medicare? Here are the three main things you need to know


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Medicare can feel like a maze when you first try to navigate it.

After all, there are different “sections” to the federal health insurance program, which provides coverage to about 56.5 million people in the crowd 65 and older. And, whether you’re already eligible at age 65 or you’re older and transitioning from workplace coverage to Medicare, there are a number of important factors to consider that affect your wallet.

First, though, it’s important to know the basics: Original Medicare includes Part A (hospital insurance) and Part B (outpatient care).

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Some beneficiaries choose to receive those benefits through an Advantage Plan (Part C), which often includes prescription drug coverage (Part D). Others stick with original or basic Medicare and can pair it with a standalone Part D plan and so-called Medigap policy.

Here are three main things to keep in mind as you prepare to apply.

1. It will cost you

Medicare is not free.

“This comes as a surprise to a lot of paid beneficiaries [payroll] Danielle Roberts, co-founder of insurance company Boomer Benefits, said.

Those taxes won’t mean there’s no premium for Part A, but Parts B and D have premiums that beneficiaries pay monthly throughout their retirement years, says Roberts.

Free Part A is available as long as you have at least 10 years of work in the process of paying into the system through payroll taxes. Otherwise, the monthly premium could go up to $499 in 2022, depending on whether you have paid or not any taxes to the Medicare system.

Spouse does not have their own work history may also qualify for free Part A.

Part A also has a $1,566 deductible, which applies to the first 60 days of inpatient hospital care during the benefit period. For the 61st to 90th day, the beneficiary pays $389 per day and then $778 per day for 60 days of “lifetime reserve”.

Meanwhile, the standard Part B monthly premium is $170.10 this year. However, some beneficiaries pay more through income-adjusted surcharges.

“Many of my high earners are in shock when they retire,” says Elizabeth Gavino, founder of Lewin & Gavino, an independent broker and general agent for Medicare plans.

The government uses your tax returns from the previous two years to determine if you will have to pay extra. To claim a reduction in the amount associated with that income due to a life-changing event such as retirement, the Social Security Administration there is a form you can fill out.

Part B also has a deductible: $233 in 2022. Once met, beneficiaries are typically responsible for 20% of covered services.

Part D premiums, deductibles, and copays depend on the specifics of coverage. The average premium this year is about $32, according to the Centers for Medicare & Medicaid Services. And, as with Part B, higher earners will be charged additional fees through IRMAA.

2. Missing key deadlines could mean extra payments

If you plan to sign up for Medicare as soon as you qualify at age 65, you’ll have a seven-month “initial enrollment period” that begins three months before your 65th birthday month and ends three months after there.

Meanwhile, if you delay enrolling at age 65 because you’re still working and your employer’s coverage is accepted (by Medicare standards), you have eight months to apply after Your workplace plans come to an end.

Regardless of your audience enrollment rules, missing the Part B enrollment deadline could result in a lifetime late enrollment penalty. For each full year that you would have signed up for but didn’t, you will be charged 10% of the standard monthly Part B premium.

“Many of my high earners are shocked at how much they will have to pay for their Medicare premiums in retirement.

Elizabeth Gavino

Founder Lewin & Gavino

3. Additional coverage may make sense

The different costs associated with basic Medicare may vary if you have supplemental coverage.

One option is to enroll in the Advantage Program. While you’ll usually continue to pay your Part B premium, many plans have low or zero premiums. And in addition to typically covering prescription drug coverage, Advantage Plans can also offer additional services like dental, vision, and hearing.

Incentive Plans come with out-of-pocket spending limits, unlike basic Medicare. Their cost-sharing structures — i.e., deductibles, copays, or coinsurance — also vary and vary from plan to plan.

However, the annual maximum out-of-pocket can be high: in 2021, the average is $5,091, according to the Kaiser Family Foundation. You may also be asked to use certain doctors, hospitals, and pharmacies.

“These plans have a network of providers, and some will require you to choose a primary care doctor and be referred to certain providers and pre-authorize the treatment,” says Roberts. more expensive procedures, tests, and surgeries,” says Roberts.

Your other option is Medigap, which gets some basic Medicare-related cost-sharing, such as a Part A or Part B copay. These policies are also offered by private insurance companies. individual, but often standardized – plans of the same name provide the same benefits no matter which insurance company sells it. Available Medigap policies are specified A, B, C, D, F, G, K, L, M and N and each offers a different level of coverage.

However, they can be expensive, depending on the insurance company and where you live. A 65-year-old woman in Dallas can pay less than $100 monthly for WOOD Plan, while in New York, that person will pay $278, according to the American Association of Medicare Supplement Insurance. And in general, those premiums add up over time.

Choosing between an Advantage Plan or Medigap (or not) can involve things beyond the cost and depends on the specifics of your situation. It’s worth consulting with an experienced Medicare agent or your local State Health Insurance Assistance Program, also known as SHIP, and you won’t lose anything. What is the fee for instructions.

“There are many factors to consider when choosing between these two options,” says Gavino.



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