More and more people are putting off retirement because of how expensive health insurance can be. Many believe that if they wait until age 65 they will be covered by Medicare and everything will be fine. However, that is often not the case. While the monthly premium for Part B may be affordable, there are a number of deductibles and co-pays that could be incurred and those costs can add up quickly.
There are four parts to Medicare. Part A covers hospital care and Part B covers doctors. Some people have Medicare Part C (often referred to as advantage plans), which is an option where Medicare pays a private insurance company that creates a network to cover your medical costs. Part D is for drug coverage. Sometimes advantage plans cover prescriptions so you would not need Part D.
If receive Social Security at age 65, you will automatically be signed up for Parts A and B. If you are still working and the company plan covers 20 or more workers, you can decline the Part B until you are no longer in the employer plan. You will not automatically be signed up for Part C and D. If you have not started receiving your Social Security at age 65, you must pro-actively contact Social Security to sign up for Medicare.
The initial enrollment period is the seven months surrounding when you turn 65 and three months before your birthday, your birthday month and up to three months after your birthday. You should do so as early as possible to make sure coverage begins at the start of the month you turn 65.
Just remember that Medicare plans do not cover all of your medical expenses. After your deductible, Medicare pays 80 percent, and you are responsible for 20 percent. Medicare does not cover long-term care, but will cover up to 20 days in a facility if you have been admitted to a hospital for at least three days. It will provide for up to 80 more days with a high deductible, and then there is no more coverage. This is useful if you need some short-term therapy or a short time to recover from surgery. Medicare also doesn’t coverage dental or hearing services.
Melissa Damico is manager of Client Services for the Manufacturer & Business Association Insurance Agency (MBAIA) and a licensed insurance agent. Contact her at 814/833-3200, 800/815-2660 or mdamico@mbausa.org.
