Transitioning into retirement can have its hurdles. Especially when it comes to the federal government’s healthcare system. For most, one becomes able to apply for Medicare once they reach 65 years of age. However, things can get a little tricky for when and how to apply along with their options, regulations, and penalties
We will be going over a few problems that are quite common.
The first: missing out on registering during your first initial enrollment timeframe. If you do not enroll within the given period, this can change your rates permanently, or this can also delay your benefits.
You can enroll for seven months during the year of your 65th birthday. You can register three months before your birthday month, your birthday month, and also the three months after.
If you do not apply within that given timeframe, you will have to wait until the general enrollment period to register. Not enrolling on time will not only delay receiving medical coverage, but you will also be facing more expensive premiums.
Good news for some, though: if you are receiving Social Security payment at the age of 65, you automatically become a recipient of Medicare. This means that you do not have to sign up, as Medicare will contact you.
For those that are working at age 65 and already have health coverage with their employer, you shouldn’t have an issue with keeping your healthcare plan with your employer. If you decide that you would like to switch over to Medicare from your current health insurance, be sure to go over all the benefits and disadvantages of both coverages. Generally, most medical insurance from employers is more advantageous than the federal government health care plan.
If you need a bit of help navigating Medicare, be sure to reach out to your State Health Insurance Assistance Program as they provide free counseling to assist you.
The second common problem is if you do end up missing your initial enrollment period, and you decide to use Medicare, you will have to pay more than you would have in the beginning.
The cost of how much more you will have to pay is calculated by how long it took to apply and which coverage of Medicare you need,
For Part A, which is the coverage plan for hospital stays, this tends to have no premiums. Still, if you are not eligible to receive it for free and you did not enroll to purchase this coverage initially, you have to pay 10% more for a given time frame, which depends on how long you waited until you applied.
For Part B, which is the coverage plan for doctor’s visits, if you do not enroll in time, more than likely, you will have to pay more for life. The cost can go up 10 percent for every 12 months it took for you to register.
For Part D, which is an optional plan for prescriptions, you can select to have this under your plan. It is recommended if you pass on the Medicare Advantage plan, and instead choose the Original Medicare option. However, if you did not apply for this during the initial enrollment period and you do not have this plan for 63 days, you may find yourself paying more with a penalty for late enrollment. The amount you will have to pay will be calculated with how long you did not have the coverage for.
The third problem that many face is not understanding the difference between Original Medicare and Medicare Advantage.
Original Medicare is the traditional coverage that is provided by the federal government. They offer Part A and Part B coverage. Two additional coverages are elected by choice for those in this program: Part D, which covers prescriptions and Medigap, which helps cover expenses that Medicare does not cover.
Original Medicare allows you to be free from selecting a primary care doctor, and you usually do not have to receive a referral to see a specialist. However, there is no annual cap on what you will be paying outside of what is covered.
Medicare Advantage is a total coverage option that is provided by private medical insurance companies that are selected by the government. These plans usually offer Parts A, B, and D.
These plans are guided by regulations from the federal Medicare system. They have to provide coverage that the Original Medicare provides. However, these regulations can be changed annually, so be sure to review these every year. Also, Medicare Advantage can provide more coverage of other medical services, which is why premiums and coverage of service can be quite different between these plans.
The good news is that you are not locked into just one plan for life. You can change from Medicare Advantage to Original Medicare–or the other way around– but this can only be done during selective enrollment timeframes.
Keep in mind that changing plans can have you not eligible to continue services with your current doctor, or you may risk being disqualified for Medigap when switching to Medicare Advantage. So be sure to do all your homework before you decide to change coverages.
The fourth mistake that you could encounter is losing your Medigap policy if you switch over to Medicare Advantage from Original Medicare. This means that you can lose coverage that pays for additional expenses that Original Medicare does not fully cover.
Now, if you do decide to change over to Medicare Advantage, be sure to check out the guide on how to do this by Medicare at their website. You can allow losing your Medigap coverage, but you may never be able to get it back in the future. You are only guaranteed to receive Medigap during the first enrollment period as insurance companies are not able to deny you coverage or raise your premiums due to pre-existing conditions.
After the initial enrollment, a majority of the states allow for insurance companies to deny you or raise your premiums if you have pre-existing issues. This can risk you losing additional coverage or have you pay way more than before for Medigap.