If your 65th birthday is approaching, it will pay to get to know the Medicare system. Timing is a huge factor in keeping your costs low, and there are other tricks to the trade that will help you navigate the often-confusing rules of Medicare. Did you know that the decisions you make early on in your Medicare eligibility can have a lasting financial impact? Here are six things you need to know-before it's too late!
1. It's a good idea to get help.
Navigating the confusing paperwork that's involved in Medicare and evaluating health plans can be an overwhelming task. Depending on where you live, there are about 20 different Medicare Advantage plans, upward of 35 drug plans, and a wide variety of supplemental plans, in addition to traditional Medicare. So how do you know what's right for you? Hiring an independent Medicare advisor will help you find the coverage that will meet your specific needs. For the advisor's $250 to $1,000 fee, you will have access to an expert who sifts through the different options for you using proprietary software-not guesswork. A simple Internet search will net you multiple advisor options.
2. If you apply early, you can avoid additional fees.
You can sign up for Medicare three months before you turn 65 through three months after your 65th birthday. However, it is in your best interest to apply early, regardless of whether you need the coverage on your 65th birthday. If you don't sign up then, you are still eligible for benefits, but you will pay more. For every 12-month period that you are eligible for Medicare but don't sign up, you will pay an additional 10 percent on your premiums. If you are currently part of a group health plan through an employer, sign up within 8 months of leaving the job to avoid the higher premiums.
3. You may need a supplemental plan.
Medicare acts as a basic insurance plan, but many retirees have additional out-of-pocket expenses, just like any other health plan. Supplemental coverage with Medicare Advantage or a Medigap plan will help to defer some of that cost. There is a six-month period beginning the month you turn 65 that guarantees your acceptance into a Medigap plan, regardless of any preexisting conditions. After that period expires, your case will be evaluated based on your current health, which may mean denial of coverage or high premiums. So again, it pays to sign up on time.
4. It pays to revisit plans yearly.
Your needs may change every year, and Medicare's supplemental plans will also change. You will be automatically renewed under your current plans each year, but it's a good idea to take a look at what else is out there. Has the premium changed? Is the coverage the same? Do your homework to ensure you receive the coverage you need and at the price you want. This will help you avoid unnecessary surprises when your bill arrives in the mail.
5. Preventative care is covered.
Yearly physicals and check-ups are just as important now as they were when you were younger. Medicare offers a preventative care visit within your first 12 months in the system. Your doctor will review your medical history and discuss preventative care with you. After your first year with Medicare, you are eligible for yearly wellness visits in addition to other preventative procedures. Ask your adviser or doctor about your coverage.
6. Medicare works with other coverage.
If you are covered under another health plan, Medicare will work with that plan under coordination of benefits rules. Essentially, your primary plan will cover costs up to the limits of the plan, and then your secondary plan will pay the costs that the primary plan did not. It's important to note that there may still be out-of-pocket expenses, based on your coverage, which is why it's important to take advantage of supplemental coverage.
Making sure you're adequately covered by health insurance is a necessary, but often confusing, process. It pays-literally-to do your homework and sign up early to avoid unnecessary price increases that will last the rest of your life. And when you take advantage of Medicare's preventative coverage, you will save more in the long run in terms of your health, quality of life, and in future health care costs.