Navigating Medicare

Medicare Made Simple: A Beginner’s Guide to Understanding Your Options

If you’re approaching 65, you’ve probably started receiving plenty of mail about Medicare—and you may have quickly realized that Medicare has its own language.

Part A. Part B. Part C. Part D. Medicare Advantage. Medicare Supplements. Enrollment periods.

It can feel like a lot.

The good news is that you don't need to become a Medicare expert. You just need to understand a few basics so you can start asking the right questions.

Here’s a simple place to begin.

First, What Is Medicare?

Medicare is the federal health insurance program primarily for people age 65 and older, as well as certain younger people who qualify due to disability.

One important thing to understand from the beginning: Medicare was not designed to pay 100% of your healthcare expenses. Depending on the coverage you choose, you may still have premiums, deductibles, copayments and other out-of-pocket expenses.

The Four Parts of Medicare

You’ll hear a lot about the “parts” of Medicare. Here’s the simplest way to think about them:

Part A — Hospital InsuranceHelps cover inpatient hospital care, certain skilled nursing facility care, hospice and some home health care.

Part B — Medical InsuranceHelps cover doctors, outpatient care and many medical services and supplies.

Part C — Medicare AdvantageAn alternative way to receive your Medicare benefits through a private insurance company. You must have Medicare Parts A and B to enroll.

Part D — Prescription Drug CoverageHelps cover prescription medications.

Understanding those four pieces makes everything else a little easier.

When Should You Enroll?

For most people turning 65, the Initial Enrollment Period is a seven-month window:

3 months before your 65th birthday month + your birthday month + 3 months after

If you're already receiving Social Security benefits before turning 65, you may be automatically enrolled in Parts A and B. If you're not receiving Social Security, you generally need to take action to enroll yourself.

But there’s an important exception.

Still Working at 65?

If you or your spouse are still actively working and you have employer health coverage, you may be able to delay certain parts of Medicare without a penalty.

Whether that's the best choice depends on your particular employer coverage. Employer size can also matter. The Louisiana SHIP guide notes that with employer plans of fewer than 20 employees, Medicare is generally the primary payer.

This is one area where I recommend not assuming anything. Before delaying Medicare, make sure you understand exactly how your employer coverage works with Medicare.

Original Medicare + Supplement or Medicare Advantage?

Once you have Medicare, one of the biggest decisions is how you want to receive your coverage.

Two common paths are:

Original Medicare + Medicare Supplement + Part D

or

Medicare Advantage (Part C)

Neither is automatically “better.” They simply work differently.

Medicare Advantage

Medicare Advantage plans often have lower monthly plan premiums and many include prescription drug coverage. Some also offer additional benefits such as dental and vision.

In exchange, you may have copays and deductibles as you receive healthcare, and many plans use provider networks.

Medicare Supplement

A Medicare Supplement—also called Medigap—works alongside Original Medicare and helps pay certain costs that Original Medicare doesn't pay.

Medicare Supplements generally have a separate monthly premium. They don't include prescription drug coverage, so someone choosing this route may also need a separate Part D plan.

The SHIP guide's comparison on page 6 highlights this basic tradeoff: Medicare Advantage generally emphasizes lower monthly plan costs and additional benefits, while Medicare Supplements generally offer broader provider choice and fewer out-of-pocket costs when receiving Medicare-covered services.

Timing Matters With Medicare Supplements

If you think you may want a Medicare Supplement, pay particular attention to your enrollment timing.

The guide notes that in Louisiana, an important time to purchase a Medicare Supplement is during the first six months after enrolling in Medicare Part B. Outside certain protected enrollment situations, eligibility requirements and medical underwriting may affect your ability to obtain coverage.

That's one reason I encourage people to look at the long-term picture, not just which option appears least expensive today.

Don't Forget Prescription Coverage

Prescription coverage deserves its own review.

Your medications can make a significant difference in which Part D or Medicare Advantage plan works best for you. Formularies, preferred pharmacies and your costs can differ from one plan to another.

And if you delay Part D, make sure you have creditable prescription drug coverage elsewhere. Going without Part D or other creditable coverage can result in a late-enrollment penalty.

There May Be Help With Medicare Costs

People with limited income and resources may qualify for programs that help with Medicare expenses.

Louisiana's Medicare Savings Program may help eligible beneficiaries with the Part B premium and, in some cases, other Medicare cost-sharing.

The federal Extra Help program can help qualifying individuals with Part D prescription drug costs.

You Don't Have to Figure It Out Alone

When I meet with someone who's new to Medicare, my goal isn't to overwhelm them with every Medicare rule.

It's to answer the questions that actually matter:

When should I enroll?Should I keep my employer coverage?Medicare Advantage or a Medicare Supplement?Are my doctors covered?What about my prescriptions?And what is this actually going to cost me?

Once we work through those questions, Medicare usually becomes much easier to understand.

If you're approaching 65 or preparing to retire, start the conversation early. Understanding your choices before you have to make them can help you feel much more confident when it's time to enroll.

This article is for educational purposes and is based in part on the Louisiana Senior Health Insurance Information Program's Guide to Navigating Medicare. Medicare options and eligibility depend on individual circumstances.

guide-to-navigating-medicare.pdf

Download PDF • 9.79MB