In your earlier years, you probably never thought much about Medicare, what it is, and why you pay into it. As you work and pay payroll taxes, you contribute to the Medicare program, the federal health insurance program offered to those 65 and older, and those with disability. As you transition into retirement, you’ll want to put some time aside to learn about Medicare because, at some point, you will need it.
Between the different parts, plans, penalties, and yearly changes, it’s no secret Medicare is a complex system. That’s why it’s important to research Medicare and prepare for your transition. It’s very different from the coverage you’re used to having, but don’t feel overwhelmed! There are several ways to get Medicare advice from experts to help guide you through this process. But, it helps to do some research beforehand. If you’re still unsure why you should learn about Medicare, here are five reasons.
You’ll likely need it at some point in your life
Did you know Medicare becomes primary to retiree coverage or that it doesn’t coordinate with Affordable Care Act (ACA) plans? These are essential things to know because if you fail to enroll in Medicare when you need to, you could be left uninsured or spend more money than you need to.
Retiree coverage becomes secondary to Medicare; therefore, if you don’t sign up for Medicare, your retiree coverage can refuse to pay for your medical services. If you have an insurance plan that you pay for and it’s not providing you coverage, then you’re basically throwing money out the window.
Additionally, ACA coverage is not creditable for Medicare, and once you become eligible for Medicare, your ACA plan can become expensive. Medicare will likely be the more cost-effective option.
Some people aren’t offered retiree coverage, and once you’re past 65 and are no longer working, you can’t enroll in an ACA plan (unless you pay a Part A premium). So, how do you get health insurance? Well, through Medicare. That’s why learning about Medicare is essential because you’ll likely need it at some point in your life.
There are several parts and plans
As briefly mentioned, Medicare has different parts and plans you can enroll in for coverage. For instance, the federal government provides Medicare Part A and Part B. This is your hospital and medical coverage, respectively. Depending on your situation, you can enroll in these two parts simultaneously or at different times.
There is also Part D which is your prescription drug coverage, and Part C which is known as Medicare Advantage. Private insurance companies offer these two parts, and their plans vary by zip code.
In addition to those two parts, there are also Medicare Supplement plans offered by private insurance companies. There are ten different Supplement plans you could choose from.
Are you overwhelmed yet? If so, don’t worry! You can take it step by step and learn one at a time.
If you make a mistake, it could cost you
An important factor to take note of is the risk of Medicare penalties. You could accumulate lifelong late enrollment penalties if you don’t know what parts you need and when to enroll. Those penalties will be added to your monthly premiums in the future when you do register.
Both Part B and Part D have penalties. If you don’t have creditable coverage from an employer and don’t enroll during the correct enrollment period, you’d begin accruing penalties. Learning when to apply is exceptionally crucial as you approach Medicare age.
The coverage differs from other insurance
You might be used to HMO and PPO plans, whether they are employer plans or ACA plans. These plans have networks of providers and can offer 100% coverage for preventive and routine services. Well, Medicare is different. With Medicare, you can see any provider that accepts Medicare, no matter where you are in the country.
Additionally, Medicare does cover some preventive services, but Medicare coverage is built on medical necessity, meaning if the service is medically necessary to treat, diagnose, or monitor a health condition, it should be covered.
Plans and premiums can change every year
The plans offered by private insurance companies can change each year. Benefits can be added and taken away within Advantage plans, drugs can be added or removed from Part D plans, and premiums change with Advantage, Part D, and Supplement plans.
Since plans change every year, you always want to ensure you have the most cost-effective plan that meets your needs. Understanding these options, when you can change plans, and how to change is vital in understanding Medicare.
It’s never too late to start learning
These are just brief explanations of five reasons why you should learn about Medicare. Although it’s a great place to start, there is still more to learn. If you know you’ll be approaching Medicare enrollment soon, give yourself time to master Medicare.