Turning 65 is a significant milestone in everyone’s life, especially when it comes to healthcare.
This is the age when most individuals have already started looking into retirement and are receiving Social Security benefits, as well as becoming eligible for Medicare. There are always changes in healthcare, so it’s important to understand that healthcare needs and coverage options change as you age.
When people think of Medicare, a question often asked is, “What does Medicare cost?” Premiums and benefit limits are important, as some, if not most, retirees are counting on living off their Social Security benefits. Figuring out if you’re eligible for both Medicare and Medicaid could significantly influence the plan options and benefits if you are someone who may struggle with income. Individuals who qualify for both programs, known as “dual eligibles,” can receive an expanded range of healthcare services and financial assistance, which could significantly reduce their out-of-pocket costs. Combining Medicaid and Medicare is designed to help those with limited income and resources and can provide access to comprehensive coverage opportunities.
Here are seven essential healthcare facts to keep in mind as you approach 65, including understanding who is eligible for both Medicare and Medicaid and how your eligibility impacts your healthcare coverage.
The first time you’re eligible to enroll in Medicare is usually when you turn 65. There are multiple parts of Medicare to consider: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage).
You’ll automatically be enrolled in Medicare Part A and Part B if you’ve received Social Security benefits for at least four months before your 65th birthday. However, if you’re not already receiving Social Security benefits, you’ll need to sign up during your Initial Enrollment Period (IEP), which starts three months before your 65th birthday and ends three months after your birth month. If you miss this enrollment window, you’ll have to wait until the General Enrollment Period to apply and could be hit with a late enrollment penalty if you don’t continue to carry creditable coverage past 65.
Late Enrollment Penalties
The late enrollment penalties you’d be hit with due to not enrolling in the different parts of Medicare when needed can be significant, not to mention life-long. Those who continue to work or have a spouse who works past 65 and are covered by large group coverage through an employer with 20 or more employees can continue to delay all parts of Medicare without penalty until they retire if they choose to do so.
However, if you don’t fit in this category of people over 65, you’ll want to enroll in Medicare when you’re first able to. The Part B penalty is a permanent 10% of the base premium for every 12 months you go without Medicare or creditable coverage past 65, and the Part D late enrollment penalty is 1% of the national base premium for every month you go without creditable coverage and is added on to the monthly Part D premium.
Prescription Drug Coverage
Prescription drug costs can be a significant part of your healthcare expenses as you age. Medicare Part D provides coverage for prescription medications, and it is important to choose a plan that covers the medications you need. These plans will vary in terms of the premiums, what medications they cover, drug tiers, deductibles, and co-pays, so reviewing the formulary (the list of drugs the plan covers) and understanding your potential out-of-pocket costs is crucial to minimize unexpected medication costs.
Medigap Policies and the Open Enrollment window
Medicare Supplement insurance, mainly called Medigap plans, helps cover the gaps that Original Medicare doesn’t cover, such as co-payments, coinsurance, and deductibles. These policies are sold by private companies and can be particularly beneficial if you visit your doctor often or require extensive medical care.
While each lettered plan is standardized, meaning that your benefits won’t change from carrier to carrier, it’s important to compare the different types of Medigap policies, as they offer various levels of coverage and come with varying premiums.
Another important thing to note about these plans is the Medigap Open Enrollment. This window of time that runs six months past your Part B date allows you to enroll in any Medigap you qualify for without underwriting. If you miss this window, you’ll likely be required to answer questions about your health history to enroll or switch your plan and could be denied.
Preventive Services and Screenings
Medicare offers a range of preventive services and screenings at no extra cost if you meet the eligibility criteria through an Annual Wellness visit. These services include vaccinations, cancer screenings, cardiovascular disease screenings, and more. Taking advantage of these 100% covered preventive services can help catch potential health issues early, improving your chances of successful treatment and maintaining your health as you age.
Long-Term Care Considerations
As you age, the likelihood of needing long-term care increases. However, it’s important to note that Medicare does not cover most long-term care services, like custodial care or room and board in nursing homes or assisted living facilities. For those with limited income and resources, it’s crucial to plan for this potential expense through savings, long-term care insurance, or Medicaid. Understanding who is eligible for Medicare and Medicaid can be particularly beneficial, as Medicaid could significantly help with long-term care costs.
Staying Informed About the Changes of Healthcare
Healthcare policies and coverage options can often change by adding new rules, approving new services, and reconstructing how the different parts of Medicare work, so staying informed about any updates that might affect your benefits is beneficial. Regularly reviewing your Medicare plans during the Annual Enrollment Period (AEP) in October can help ensure your plan still covers your doctors and medications.
Conclusion
Turning 65 significantly changes your healthcare coverage and options, with Medicare playing a leading role. Understanding the different parts of Medicare, exploring Medigap plan options, and staying informed about preventive services and long-term care considerations can help you ensure you are comprehensively covered for the long run.
