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For many people approaching retirement age, Medicare can loom like a spectre with its complex coverage, guidelines and enrollment requirements. When can I sign up? What happens if I don't? How will it work with existing coverage? Should I buy a supplement? How does prescription coverage work? You can put some of these concerns to rest by understanding your coverage options and knowing when to enroll.
Medicare is federal health coverage for people age 65 or older and people under 65 with certain disabilities. Medicare has different coverage components, called "parts." Part A is hospital coverage and is provided for most people without a premium. Part B is medical coverage for which most people currently pay a premium of $96.40 per month (private health plans cover most Medicare deductibles and coinsurance). Part D is prescription drug coverage that is available through private plans.
You officially become eligible for Medicare on the first day of the month that includes your 65th birthday. For example, if you will turn 65 on Sept. 18, you are eligible for Medicare on Sept. 1. One notable exception to this is if your birthday falls on the first of the month, in which case, your eligibility date is actually the first of the previous month (e.g., folks who turn 65 on Oct. 1 are eligible Sept. 1). To start coverage on the earliest day you are eligible, you can enroll up to three months before that date - this period is called your initial enrollment period.
To enroll in Medicare, contact your local Social Security Administration office. Individuals who are receiving Social Security benefits, such as Social Security Income or Social Security Disability Income prior to their 65th birthdays are enrolled in Medicare automatically.
If you fail to enroll during your initial enrollment period, you can do so during the next annual general enrollment period, which runs from January to March each year, with coverage starting in July. You may owe a penalty for late enrollment that increases your Part B premium. If you and your spouse are ready to retire and will no longer have health coverage through a current employer, enroll in Part B during your initial enrollment period to avoid the penalty.
If you are retired, ask your benefits administrator how your retirement plan coordinates with Medicare coverage. If you are still working and have group health coverage through your employer, you may be able to delay enrollment in Part B without penalty. Talk to your employer about how the plan works with Medicare.
Original Medicare does not cover all medical expenses. A Medicare supplement is private insurance that fills the gaps in Medicare coverage. Your open enrollment for supplemental coverage begins when you enroll in Part B and ends six months later. During this period, an insurance company cannot deny you coverage because of your health, make you wait for coverage to start or charge you higher premiums because of health problems. If you can't afford a supplement, go ahead and enroll in Part A and Part B, then you can apply for help paying costs through your county Department of Job and Family Services.
The last major part of Medicare is Part D, or prescription drug coverage. To avoid paying a penalty that increases your premium, select a Part D plan during your initial enrollment period. If you have retiree benefits or are on an employer health plan that includes prescription coverage, ask your benefit administrator if your current coverage is at least as good as Medicare's (called "creditable coverage"). If it is, you can delay taking Part D without penalty.
If your prescriptions are expensive, be aware of a coverage gap in Part D, called the "doughnut hole," in which you are responsible for 100 percent of your prescription expenses. People with limited incomes may get extra help paying Part D costs by contacting the Social Security Administration.
The staff of Boomerang thanks the Ohio Department of Insurance and the Ohio Senior Health Insurance Information Program (OSHIIP) for contributing to this article. OSHIIP is a state and federally funded program that educates, counsels and advocates for Medicare beneficiaries. They can guide you through the many milestones on the road to Medicare and answer questions about your specific coverage needs. Call them toll free at 1-800-686-1578 or visit www.insurance.ohio.gov for help or to learn more.