5 Things You May Not Know About Medicare

Medicare has many nuances, which can make it hard to navigate. Based on questions our advisors often receive, we compiled five important things you may not know about Medicare to help you better understand it.

Medicare is Not Free

While it would certainly be nice to receive Medicare coverage for free, you will still be required to pay when you enroll in Medicare, just as you would with most other health coverage. Most beneficiaries will still be required to pay monthly premiums and other out-of-pocket costs.

Your costs will vary based on the kind of coverage you choose:

• Original Medicare (Medicare Part A and Part B)
• Medigap/Supplement plan
• Medicare Advantage plan (Medicare Part C)
• Medicare prescription drug plan (Medicare Part D)

If you would like help comparing your Medicare options, our advisors are here to guide you. We specialize in researching and comparing Medicare plan options so you can determine which plan will work best for your budget and needs. 

Your Medicare Plan Choice is Unique to You 

Medicare is structured differently from employer coverage, which is designed to cover up to several family members. Instead, Medicare plans are specific to individuals and cannot cover dependents. This means that spouses cannot share health care coverage like they may have done in the past. 

Although the concept of personalized coverage may be unfamiliar, it works quite well because it allows you to consider your own health and financial needs when choosing a Medicare plan.  

You Can Enroll in Medicare and Continue to Work

Despite popular belief, retirement is not a requirement for Medicare. If you’re age 65 or older, you can sign up for Medicare regardless of your current employment status. Now more than ever, individuals are delaying retirement and staying in the workforce. 

The good news? You have options! Compared to employer coverage that offers few options, Medicare isn’t one-size-fits-all. You can choose a plan based on your needs and budget, rather than your employer’s. In addition, Medicare plans are often much more cost-effective than employer health plans. 

It’s important to know that if you work at an organization with fewer than 20 employees, you’ll be required to enroll in Medicare once you become eligible at age 65. However, if you work for a larger organization, you can choose between Medicare and your employer’s health coverage. Either way, you have the option to enroll in Medicare without retiring.

There are Multiple Medicare Enrollment Periods

Initial Enrollment Period 

Your Initial Enrollment Period (IEP) is a seven-month window when you are first eligible for Medicare. It centers around your birth month, beginning three months before it and ending three months after it. For example, if your 65th birthday is Nov. 20, your IEP would begin on Aug. 1 and end on Feb. 28.

Open Enrollment Period

During Medicare’s Open Enrollment Period (OEP), Jan. 1 – March 31, individuals on a Medicare Advantage (MA) plan can enroll in a different MA plan or disenroll from their current MA plan and return to Original Medicare (Medicare Part A and Part B). You can only make one change to your plan during OEP. If a plan change is made, the new plan will go into effect on the first day of the following month.

Annual Enrollment Period

Medicare’s Annual Enrollment Period (AEP) is for all individuals on any type of Medicare plan. AEP is from Oct. 15 through Dec. 7 each year. During this time, you can review your current Medicare plan and explore others that may better fit your needs or budget. If you choose, you can enroll in a new plan for the upcoming year. 

Special Enrollment Periods

When certain life events happen, Special Enrollment Periods (SEPs) allow you to make changes to your Medicare coverage. Some examples of qualifying life events are moving or losing other insurance coverage. 

You Can Incur Penalties if You Don’t Enroll in Medicare at the Proper Time 

Late enrollment penalties (LEP) are issued to individuals if there’s a lapse in their health coverage once they are eligible for Medicare. The penalty amount depends on how long the person has gone without creditable coverage and varies based on the type of penalty. Creditable coverage is any health coverage that is comparable to or better than what is available through Medicare for prescription and/or medical coverage.

There are three types of LEPs:

• A Medicare Part A LEP for going without creditable hospital coverage (for those who don’t automatically qualify).
• A Medicare Part B LEP for going without creditable medical coverage.
• A Medicare Part D LEP for going without creditable prescription drug coverage (the most common LEP).

Once assessed, the penalty is added to the person’s monthly Medicare premium, and the duration is based on the type of penalty. 

Our advisors can talk you through enrolling in Medicare at the right time to make sure you avoid any late enrollment penalties or a lapse in coverage.

Questions? We’re here to help!

If you’re new to Medicare and aren’t sure where to start, contact our advisors who can guide you every step of the way. Reach out today at 937.915.3563 or schedule a call.

If you’re currently a RetireMed client and have questions about Medicare or your plan, call 877.222.1942 or schedule a call with a client advisor.