Why is Medicare so Complicated?

I get that question a lot. Medicare became law over 50 years ago. In that time, Medicare law has been changed and improved hundreds of times to deal with changing situations. Many people now work past age 65, most seniors want a supplemental health plan, prescription drugs need to be covered, some prefer all-in-one plans, etc. So let’s review the basics.

At age 65, during your Initial Enrollment Period (3 months before your 65th birthday month, your birthday month, and 3 months after your 65th birthday month), you qualify for Medicare Part A enrollment. This covers hospitalization and has a deductible of $1,316. It also has a hefty copay if you are hospitalized for more than 60 days.

You also qualify for Medicare Part B. It has a monthly premium of $134. It is up to you to ensure you get enrolled in Part B. For many, it happens automatically but don’t count on it. Call Social Security or visit the local office in person and ensure you get part B if you want it.

If you have other coverage from a retiree plan or your current job, speak to the benefits administrator at your employer and get a certificate of coverage in writing, which allows you to delay Part B without a late enrollment penalty. Or, if the employer coverage is costing you more than Medicare would charge, you can drop your group coverage and take your Medicare Part A and B as your primary insurance. Compare the costs before you do anything though, especially drug costs.

Once you have proof of enrollment in traditional Medicare (Medicare Parts A and B) you can then enroll in a Medicare supplement and a prescription drug plan (Part D), or a Medicare Advantage plan, without or without drug coverage. Medicare supplements are standardized plans from private insurers that cover some or all of the deductibles, co-pays and co-insurance and are secondary to your traditional Medicare. Medicare Advantage plans are private insurance plans that replace traditional Medicare. In an Advantage plan, you assign your Medicare benefits to a private insurer, and they provide your healthcare with less out of pocket costs. Coinciding with your Medicare effective date, you are allowed to choose any level of coverage you want without medical underwriting. In other words, you cannot be declined during this enrollment window.

Once you are enrolled, you can change your coverage at two different times of the year without answering health history questions. Open enrollment, each fall allows you to enroll, change or drop an Advantage plan or Part D plan and, the 30 day birthday rule each year allows you to change your Medicare supplement to a similar plan or lesser plan.

There are many special circumstances where you can make other changes called Special Enrollment Periods. Moving, leaving your job, being admitted to a long term care facility, enrolling in MediCal, are just some of these SEP’s.

This is just a brief outline. Of course there are many special circumstances and qualifications. Make your choices carefully and enjoy a long, healthy retirement.

Randy Alan Foulds is an independent health insurance agent, with Turning65 and Foulds & Feldmann Insurance Agency in La Quinta, and can be reached at 760-346-6565.