If you are new to Medicare, you most likely have a million questions running through your mind regarding your plan options, the best carriers in your area, out-of-pocket costs, and more.
Below, we review the information every new Medicare beneficiary should know.
New to Original Medicare
If you are new to Medicare or are recently eligible for the federal health program, you will want to begin by enrolling in Original Medicare. Original Medicare is Medicare Part A and Part B, which cover the health insurance benefits for inpatient care, outpatient care, and durable medical equipment.
Typically, those new to Medicare will enroll in Original Medicare upon their 65th birthday. Around this time, you get an Initial Enrollment Period when you can enroll in Medicare Part A and Part B.
Remember, enrollment in Original Medicare coverage is not mandatory when you are first eligible – or ever. However, if you do not enroll or have creditable coverage in the meantime, you must pay a penalty if you eventually enroll in Original Medicare.
For most, Medicare Part A has a $0 monthly premium. If you work at least ten years in the U.S. paying Medicare taxes, you will not owe a Medicare Part A premium as long as you have this coverage.
On the other hand, Medicare Part B involves a premium for everyone. In 2022, the base Medicare Part B premium is $170.10. However, this can increase based on your income. Higher earners may need to pay a higher Medicare Part B premium. On the other hand, those with lower incomes may qualify for assistance programs that partially or fully cover their Medicare Part B premium.
New to Medicare Supplement Plans
After you enroll in Original Medicare, you have the chance to pair this coverage with a Medicare Supplement plan. Medicare Supplement plans pay secondary to Original Medicare and fill the gaps in coverage and out-of-pocket costs.
When you are new to Medicare, you may not understand all the costs associated with Original Medicare. These costs change annually, so it is essential to stay as up-to-date as possible.
Medicare Part A requires you to pay a per-occurrence deductible and per-day copayments when you stay in the hospital past the allowed number of days. Meanwhile, you must pay an annual deductible and a 20% coinsurance on Medicare Part B.
This is where Medicare Supplement (Medigap) plans can help significantly. These plans relieve you of out-of-pocket costs, making your healthcare more affordable.
When you are new to Medicare, you receive a Medicare Supplement Open Enrollment Period. This means that you can enroll in any Medigap plan, regardless of your pre-existing conditions.
Your open enrollment window for Medigap is unique to you, but it only lasts six months. Once it is over, you can still enroll in a Medigap plan at any time, but you will need to go through medical underwriting when doing so.
Thus, it is crucial to enroll in a Medicare Supplement plan as soon as you are eligible. It may be your only opportunity.
Once you have Medigap, you can receive care from any health professional that accepts Original Medicare. Because benefits are standardized, your carrier does not impact the doctors you can visit. Additionally, you will never require a referral to see a specialist.
New to Medicare Advantage Plans
If you choose not to enroll in a Medicare Supplement plan, the next best option is a Medicare Advantage plan. However, you cannot enroll in both plan types simultaneously. You must only choose one.
Medicare Advantage, or Medicare Part C, are all-in-one Medicare plans that provide additional benefits to Original Medicare. These benefits can include dental, prescription, hearing, vision, and transportation coverage, as well as gym memberships and more.
Enrolling in a Medicare Advantage plan often comes at no additional monthly cost to you. However, you must still pay your Medicare Part B premium each month. Additionally, these plans often have higher maximum out-of-pocket limits. These limits can be as high as $10,000 or more if you go out of network.
This coverage type is often more restrictive than Medicare Supplement plans, so more clients tend to enroll in a Medigap plan to save money in the long run.
New to Medicare Part D
If you are new to Medicare, it is essential to understand how Medicare Part D works. Medicare Part D offers prescription drug coverage to those on Original Medicare.
Almost all Medicare Part C plans include prescription drug coverage. Thus, you usually cannot – and will not need to – enroll in Medicare Advantage and Part D simultaneously.
A variety of carriers offer Medicare Part D plans. Each plan has a different drug formulary, which outlines the prescriptions that receive coverage and each drug’s tier.
These plans work best when combined with Original Medicare and the right Medicare Supplement plan.
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- Are You New to Medicare, Medicare. Accessed June 2022.
- Medicare, CMS. Accessed June 2022.
- Medicare, KFF. Accessed June 2022.