By year-end 2016, more than 56 million Americans are expected to be enrolled in Medicare. That's an astounding figure, and it makes this one of the country's most popular and important government programs.
Despite its gargantuan size, millions more are projected to become dependent on Medicare in the years ahead. In fact, roughly 10,000 baby boomers become eligible for coverage every day! That's makes it vitally important for almost everyone to become familiar with how this program works.
With that in mind, here's a list of five essential Medicare facts that all current and future recipients should know.
How to qualify for Medicare benefits
Most U.S. citizens qualify for Medicare coverage once they reach age 65, so long as they (or their spouse) earned enough work credits during their career. Full Medicare benefits kick in once 40 credits are earned, and you can earn up to one work credit per quarter. Thus, reaching the 40 credit threshold requires at least 10 years of full-time work.
Thankfully, if you do not have enough credits to qualify for full benefits, you are still allowed to enroll. However, your monthly premiums will likely be higher.
It's also possible to qualify for Medicare coverage prior to reaching age 65 if one of the following conditions are met:
- You are listed as permanently disabled and have received disability benefits for at least two years.
- You have End-Stage Renal Disease and require dialysis, or have had a kidney transplant.
- You have Lou Gehrig's disease.
How to sign up
If you're already receiving Social Security or Railroad Retirement Board benefits prior to age 65, then you won't have to do a thing -- you'll automatically be enrolled in Medicare, and you can expect to receive your card three months prior to your 65th birthday. The same is true if you meet one of the special conditions listed above.
For everyone else, you can sign up for Medicare benefits during the seven-month window that starts three months prior to your 65th birthday. If you fail to enroll during this period, then you can sign up during the general enrollment period that runs from January 1 through March 31 of each year, but your premiums will likely be higher. That's why it's important to sign up for Medicare benefits as soon as you qualify.
If this applies to you, simply head on over to Medicare's easy-to-use website to get the ball rolling.
What it will cost you
While Medicare is generally inexpensive, it isn't completely free. That can come as a shock to some recipients, so it's important to have a good idea of what your costs will be ahead of time.
Medicare Part A, which covers inpatient services like trips to the hospital, is free if you or your spouse earned enough work credits to qualify. However, if you wind up using the benefit, then you'll be responsible for the first $1,288 of hospital expenses as part of the deductible. There could also be additional costs for co-payments, or if your stay last longer than 60 days. More details of Part A costs and coverage can be found here.
Medicare Part B, which covers the costs of services and supplies needed to diagnose and treat diseases, does require a monthly premium payment. The costs for most recipients in 2016 is $104.90 per month, but there's also an annual deductible of $166 to consider. After the deductible is met, you'll generally pay a 20% copayment on any Medicare-approved products and services.
Medicare Part C, which is known as your Medicare Advantage benefit, is not provided through the government directly. Instead, it is provided by private health insurers. As such, the costs for each plan will vary greatly based on a wide number factors. You can get an idea of those costs by using Medicare's Plan Finder tool.
Medicare Part D, which covers drugs, is also accessed through an insurance company or other private company that is Medicare-approved. Like Part C, costs will vary widely based on a range of factors, including your monthly income.
What Medicare will pay for
In general, Medicare does a great job at providing coverage for products and services that are determined to be medically necessary. Included in this list are things like annual physicals, labs tests, hospice care, surgery, home healthcare, medical equipment, preventative services, prescription drugs, and more.
Some of these services can be accessed free of charge, while others will require paying a deductible, or 20% of the cost.
Curious to find out if a specific product or service is covered? Head on over to this site to find out more.
And what it won't
While Medicare does a great job at providing coverage for seniors, it doesn't cover everything. In fact, when you did into the details, you might be shocked to learn about some of the products or services that are not covered.
This list includes:
- Most dental care
- Eye examinations related to prescribing glasses
- Hearing aids and exams for fitting them
- Routine foot care
If you're looking for coverage on any of these services, you might want to consider enrolling in a Medicare Advantage plan instead of regular Medicare. There are numerous advantages to doing so, and some plans cover services like dental, vision, and hearing care.
Medicare is an important topic that baby boomers should get to know inside and out. Knowing these basic facts about the program could go a long way toward keeping you physically and financial fit in your golden years.