More than 50 million Americans are already enrolled in Medicare and 10,000 aging baby boomers turning 65 every day means that the number of people enrolled in Medicare will continue to grow over the coming decade. Although Medicare has been around since 1966, many people don't know much about it, so we asked three Motley Fool contributors to tell our readers what they need to know about the program.
Selena Maranjian: One of the things Americans need to know about Medicare is that it's a little different under Obamacare. Many people are assuming that it's worse off, but my opinion is that the Affordable Care Act has actually made Medicare better.
Let's put a few myths to rest first, though. For example, if you have Medicare, you won't have to pay any penalties for not having coverage through Obamacare. The new law requires Americans to have health coverage or to pay a penalty, but Medicare counts. If you have it, you're fine. If you've heard that the new law will cut $716 billion [S1] from Medicare, that's wrong, too. The number instead refers to projected savings – Medicare spending is expected to be reduced by $716 billion between 2013 and 2022. Medicare's existing benefits were preserved and it will be financially stronger now.
Now – what's better with Obamacare? Well, it mandates that for all people with health insurance, including those on Medicare, many preventive services now require no patient copay. These include an annual wellness visit, flu shots, bone density tests, and screenings for high blood pressure, high cholesterol, diabetes, and cancer (via colonoscopies, mammograms, and so on). That's because the goal is to keep Americans healthy. By finding problems early, treatment costs can be lowered, while improving patients' health -- and saving many lives, too.
Keith Speights: Probably the most basic thing to know about Medicare is when you can sign up. Many Americans don't even have to do anything to enroll. If you already receive retirement benefits from Social Security or the Railroad Retirement Board, you will automatically be enrolled in Medicare and should receive your card three months before your 65th birthday. Anyone under age 65 with a disability will be automatically signed up after the 25th month of disability. Those with Amyotrophic Lateral Sclerosis, or ALS, will be automatically enrolled the same month that Social Security disability benefits begin.
If those criteria don't apply to you, you will need to apply either online, via phone, or at your local Social Security office. There is a seven month window for enrolling that begins three months before the month in which you turn 65 through three months after the month you turn 65.
You haven't totally missed the boat if you miss signing up then, though. As long as you meet eligibility requirements, you can sign up between January 1 and March 31 of each year. You may also be able to enroll during a Special Enrollment Period if you're covered by a group health plan. If your group health plan or employment ends, you have eight months to enroll in Medicare.
Dan Caplinger: Medicare is certainly incredibly useful for older Americans, as it covers a huge portion of retirees' health care expenses. But it's important to understand that Medicare doesn't cover everything, and without making additional provisions to obtain coverage, you could end up spending tens of thousands of dollars out of pocket for health care.
Specifically, Medicare Part A covers hospital and other inpatient care, Part B covers outpatient services like doctor visits, and Part D covers prescription drug costs. But various deductibles, coinsurance amounts, and lifetime limits apply to most covered areas under Medicare. For instance, Part B coverage typically covers only 80% of costs for doctor visits and other outpatient treatment, leaving you responsible for the remaining 20%. Hospital stays involve copayments that rise as the length of your stay increases. In addition, Medicare doesn't provide coverage for medical care while you're traveling abroad.
Many retirees use Medigap or Medicare supplemental insurance in order to cover what original Medicare doesn't. Alternatively, a Medicare Advantage plan combines the elements of original Medicare with supplemental coverage within a single package. Yet all of these choices come with additional costs, so it's important to look closely at all of your options to see which ones fit best with your health care needs, your financial resources, and your lifestyle.