Here at PAX Financial Group, we sure do get a lot of questions about Medicare.
Health insurance is expensive, so Medicare is a big part of retirement. When planning for the future, it’s important to know how much your benefits will cost you, when you’re eligible to start receiving Medicare and what Medicare covers later in life.
Retirement should be an exciting time; not a stressful time full of questions and wondering if you made the right decisions.
So, I sat down with PAX Insurance Specialist Justin Elliott, our resident expert on Medicare, to answer some of the most common question we hear. Here’s what he had to say:
When do I apply for Medicare? Is there a magic age?
Medicare will start for most people at age 65; more specifically, on the first of the month of their 65th birthday. For example, if your birthday is Aug. 10, Medicare will start on Aug. 1 the year you turn 65.
Even if you’re still working and receive health benefits from your employer, Medicare is recommended. This is because most people paid Medicare taxes while they worked, so they won’t need to pay a monthly premium for their Medicare benefits. This will typically save you money.
What about this seven-month window I hear about? What is that?
The seven-month window is the window of opportunity that people get to register for Medicare. Individuals have a three-month window prior to the month of their 65th birthday and three months after that month (which makes a seven-month period) when they have the option to hop into Medicare, no questions asked, and request Medicare to be their primary form of health coverage.
No questions asked? Really? So, if you have cancer or are sick, you can still get Medicare?
Yes, that is correct.
Where do you go to apply for Medicare?
To apply for Medicare, we recommend starting at www.Medicare.gov. From here, you will eventually be routed to the Social Security Administration website, because, believe it or not, Social Security oversees the Medicare process. This can be confusing for people – why am I getting all of this Social Security information? I’m not taking Social Security yet. That happens simply because Social Security governs and administrates the entire process.
After I sign up for Medicare, what happens? How do I know if I’m approved and covered?
Once you sign up for Medicare, you will receive your Medicare card (a red, white and blue card) along with a confirmation letter. You’ll also be given a Medicare claim number – that’s the final step in the process. Once you’ve received that number, your Medicare Part A and Part B will be effective.
Parts A and B? I’ve heard of those. Does it go all the way to Part Z?
No, it does not. There are three primary letters: A, B and D.
Part A covers inpatient hospital expenses and potentially a skilled nursing facility. Please do not confuse a skilled nursing facility with a nursing home. They are not the same thing.
Part B is going to cover your outpatient services – lab work, preventive tests, physicals, aches and pains, flus and colds.
Part D covers your drugs.
Most people have around 20 to 30 drug plans in their state to pick from. These plans are administered by a private company with guidance from Medicare and guidelines to follow. These plans will range in price pretty significantly. Depending on the prescriptions you take, you can shop between those plans. Medicare has a really helpful tool that allows a person to plug in all their prescriptions – the dosages and the frequencies – and then the program extrapolates all of that information and tells you what you’re annual out-of-pocket cost would be on every one of the plans, allowing you to pick the best plan for you.
What are Medicare supplements and Medigap?
Medicare supplements and Medigap are exactly the same thing. They’re synonymous. A Medicare supplement is a Medigap program.
There are about 10 or 12 different versions of these programs to pick from in the open market. They are each sold through private insurance companies and they supplement Medicare. These plans pay the deductibles and co-insurance that Medicare Parts A and B don’t cover.
How do I pay for Medicare? Do I write a check every month? Does it come out of my Social Security check? Is it taken directly from my bank account? How does it work?
If you’re subject to a Medicare premium for Parts A or B, it will traditionally be withheld from your Social Security check. If you have not elected to take Social Security yet, Medicare will then bill you on a quarterly basis.
Medicare is confusing for many, but signing up to receive these benefits doesn’t have to be stressful. You paid for them. You deserve them. Contact PAX Financial Group to see how we can help. We can also help you with your Social Security questions, another confusing topic for many pre-retirees.
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