To remain as healthy as possible -- both physically and financially -- you should be smart about how you use Medicare. Failing to do so can result in your paying more than you have to or receiving less care than you need. Here are five Medicare rules to live by that can help those approaching or already receiving Medicare coverage.
No. 1: Don't be late enrolling
A key thing to understand about Medicare is that if you're late enrolling for it, you can be penalized -- rather significantly. Here's the scoop: You're eligible for Medicare at age 65, and can sign up anytime within the three months leading up to your 65th birthday, during the month of your birthday, or within the three months that follow. Miss that seven-month-long "Initial Enrollment Period" and your Part B premiums (which cover medical services, but not hospital services) can rise by 10% for each year that you were eligible for Medicare but didn't enroll.
You may avoid the penalty, though, if you're among the many Americans who are already receiving Social Security benefits by the time they reach age 65. Those folks are typically enrolled in Medicare automatically. You might also avoid the penalty and be able to skip the deadline if you're still working, with employer-provided healthcare coverage, at age 65, or if you're serving as a volunteer abroad.
No. 2: Shop around
All Medicare enrollees get to change their enrollment once a year during the "general enrollment period," which is from Jan. 1 through March 31 of each year. Even those who are late enrolling can enroll then -- though that coverage won't begin until July and the late penalty might apply.
For new and continuing enrollees, it's very smart to shop around for the plan that will best serve you. For example, as you deliberate between "original" Medicare, featuring parts A and B (typically augmented with Part D's prescription drug coverage), and Medicare Advantage plans, think about the services and products you need and use. If you take several prescription drugs, see which plans cover those and how much they'll cost you. If you expect to need vision, hearing, and/or dental care, see which plan will best serve those needs.
Since you can change your plan once a year, it's useful to review your options annually. A visit to the Medicare.gov website can help by showing your options in detail.
No. 3: Consider Medicare Advantage plans
As you review your options when enrolling or reenrolling for Medicare, be sure to consider Medicare Advantage plans, sometimes referred to as Part C. You can select a Medicare Advantage plan instead of singing up for the original Part A and Part B coverage, and it can make a lot of sense to do so, because these plans offer at least as much coverage as Parts and B (and usually offer significantly more) and they cap your out-of-pocket expenses, too.
Medicare Advantage plans are administered by private insurers but are regulated by the U.S. government. While original Medicare doesn't cover hearing, vision and/or dental care, many Medicare Advantage plans do -- and they generally include prescription drug coverage, too. Original Medicare will often have you footing 20% of many bills with no end in sight, a Medicare Advantage plan might charge you a low copay per doctor visit or service, and they feature out-of-pocket limits , too. There's a downside that might or might not matter to you, though: While original Medicare lets you see any healthcare provider who accepts Medicare, Medicare Advantage plans will typically limit you to a network of doctors -- though these networks are sometimes very big.
No. 4: Consider Medicare plans with five-star ratings
Here's something that relatively few people know about: star ratings. The Medicare system rates the Medicare Advantage plans and Part D coverage plans that folks can sign up for, so it's in your best interest to favor ones with higher star ratings. The top score is five stars. In a nice win-win arrangement, the companies offering the plans have financial incentives to improve their scores and maintain high ones, which serves their customers well.
Remember how you can change your enrollment each year during the limited annual enrollment period? Well, you can actually change your plan throughout most of the year, from Dec. 8 through Nov. 30 -- if you're switching to a five-star plan. That's another incentive to improve performance built into the system, because poorly performing plans can have their members poached by the best plans.
What are the plans evaluated on to earn their stars? Well, Medicare Advantage plans are assessed on measures such as how well they're keeping their members healthy (via screenings, checkups, and more), how well they're managing members' chronic conditions, and how good their customer service is. Drug plans are rated on measures such as how well member appeals are handled, customer satisfaction, and how well the plan does on safety and accuracy in managing prescriptions.
You'll find the star ratings of plans available to you by using the Medicare Plan Finder at the Medicare website.
No. 5: Take advantage of everything included at no cost to you
Finally, while Medicare isn't free and you'll likely be forking over copays, deductible dollars, and sharing costs in other ways, there are a bunch of services that Medicare offers at no cost to you. So take full advantage of those, as they can keep you healthier and living longer and better, while not putting any pressure on your pocket at all.
The following bunch of original Medicare benefits are generally provided free of charge, and Medicare Advantage plans will also not charge you for them. Some require doctor's orders or other conditions for you not to be charged for them.
- Abdominal aortic aneurysm screening
- Alcohol misuse screening and counseling
- Bone density measurement
- Cardiovascular disease screenings
- Cervical and vaginal cancer screenings
- Colonoscopies and other colorectal cancer screenings
- Depression screenings
- Diabetes screenings
- Diagnostic tests
- Flu shots
- Hepatitis B shots and hepatitis C screenings
- HIV screenings
- Some home health services
- Hospice care
- Lab tests
- Lung cancer screenings
- Nutrition therapy services
- Obesity screenings and counseling
- Pneumococcal shots
- Wellness visits (one is without charge annually)
- Prostate cancer screenings
- Sexually transmitted infection screenings
- Smoking and tobacco-use cessation counseling
You may be entitled to other benefits and perks, too, such as discounts on gym memberships. Find out exactly what your plan, or any plan you're considering, offers and make the most of those benefits.