Medicare beneficiaries pay significantly less for healthcare compared to people with private insurance, making eligibility a major perk of turning 65. But a recent eHealth survey found that pre-Medicare adults have low confidence in their understanding of important aspects of Medicare, and most have gaps in knowledge that could leave them with more out-of-pocket expenses than they bargained for. The findings, released in eHealth’s Medicare Knowledge Gap report, can help you brush up on what you need to know about Medicare before you turn 65.
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Medicare Coverage Options
Just 24% of survey respondents ages 55 to 64 expressed confidence in their understanding of Medicare coverage options. In a nutshell, you have two choices: Original Medicare and Medicare Advantage. Original Medicare has Part A (hospital insurance), which is free for most people, and Part B (medical insurance), for which you’ll pay a monthly premium. You may add Part D (prescription drug coverage) to Original Medicare. Part D plans come from private insurers, so you’ll pay monthly premiums.
Medicare Advantage, also referred to as Part C, is an alternative to Original Medicare. In addition to providing hospitalization and medical insurance, it often includes extras like vision, dental and prescription drug (Part D) coverage. You pay the Plan B premium while enrolled in Medicare Advantage and might have additional Part C premiums as well.
Out-of-Pocket Costs
More than half (51%) of the pre-Medicare respondents to the eHealth survey didn’t know what out-of-pocket costs to expect or thought there were none. In fact, Original Medicare Part A beneficiaries pay a $1,736 deductible each coverage period for hospital stays (a coverage period starts the day you’re hospitalized and ends after 60 consecutive days with no in-patient care). Part B has a $283 deductible and 20% coinsurance for covered care. Original Medicare has no out-of-pocket maximum, but Medicare Supplement Insurance, or Medigap, can reduce the costs for an additional fee. Part D plans also have deductibles.
Medicare C plans might have deductibles, coinsurance and/or copayments, but annual out-of-pocket-costs are usually capped.
Medicare Enrollment-Period Deadlines
Medicare requires you to sign up during an Initial Enrollment Period that begins three months before your 65th birthday and ends three months after your birthday month. Medicare imposes a 10% penalty for each 12-month period you could have enrolled in Part B but didn’t, and an additional penalty for late Part D enrollment — fees 80% of pre-Medicare adults, respectively, weren’t aware of.
Preparing To Enroll in Medicare for the First Time
Nifty 50+ spoke with Dr. Heather Swanson, regional medical officer at CareMore Health, a cooperative care network with clinics in Arizona, California, Nevada and Tennessee, to get her advice for people approaching their Initial Enrollment Period.
Start Early
Dr. Swanson advises patients to start planning six months before they want to enroll so they have time to talk to their primary care doctor about their healthcare needs, review their medications and specialists and understand anticipated tests and treatments.
“The goal isn’t just to choose a plan, it’s to choose a plan that will support the care they are actually likely to need over the next year,” she said.
Confirm That Your Doctor Accepts Medicare
Not all physicians accept Medicare, and those that do accept it don’t all participate in the same way. Verify not only that your providers accept Medicare, but also that they’re accepting new Medicare patients and participating in the plan you’re considering.
If you need to switch providers, Swanson advised looking for one that understands your medical conditions, communicates well and can help coordinate your care across the healthcare system, noting that “the best physician relationship is one built on trust, accessibility and a shared commitment to achieving the patient’s health goals.”
