Key Points in Making Your Decision
There are many choices for health coverage in the Medicare system. You are eligible for Medicare Part A (hospital care)and Part B (doctor visits) when you turn 65. If you are already receiving Social Security benefits, you will automatically be enrolled in Medicare. Otherwise, you can sign up during the 3 months before your 65th birthday, your birthday month, and the following 3 months. If you were automatically enrolled, you can opt out of Part B if you don't want to keep it, but there are financial consequences for doing so. Consider the following when making your decision:
- If you are covered by other health insurance now, such as health benefits offered through your job, there is no penalty if you defer Part B (doctor visits) until you or your spouse retires and loses work-based coverage.
- If you are not covered by other insurance, and you do not sign up for Part B (or keep it if you were automatically enrolled), you will pay a penalty for signing up late, which will increase your costs for life.
- If you have Part B, you can buy extra insurance to cover health care costs that the traditional Medicare plan does not cover. Either a Medigap plan or a Medicare Advantage plan can help fill in the gaps in coverage.
Medicare Information to Consider
Your choices for Medicare coverage are:
- Get Part A to cover only hospital costs, which for most people is available with no additional costs.
- Enroll in the Original Medicare plan (Parts A and B, covering hospital and doctor visits). There is a monthly premium for Medicare Part B. If you don’t sign up within seven months of turning 65 (three months before your 65th birthday, your birthday month, and three months after), you will pay a 10% penalty for every year you delay.
- Enroll in a Medicare Advantage plan, which is a privately-run health plan approved by the government to provide Medicare benefits. These plans often cover hospitalization, doctor visits, prescriptions drugs and other medical services under one plan. You still enroll in Parts A and B, but you may not need a Part D plan if the Medicare Advantage plan includes prescription drugs.
- If you have Original Medicare, you should consider buying a separate Medicare prescription drug plan (also called Medicare Part D). It will help cover the cost of your prescription medications. Similar to Part B, there is a financial penalty if you do not sign up for a Part D plan when you are first eligible, unless you have other prescription drug coverage.
- If you have Original Medicare, you might also consider a Medigap plan, which will fill in other the gaps in Medicare coverage, reducing how much you spend each time you go for medical care.