You may know that Medicare is in your future, or you may be enrolled in it now. Either way, it's worth learning more about it so that you make decisions that best serve your health and pocketbook. Here are three critical ways to maximize your Medicare.
Don't be late enrolling
First off, don't be late! Really -- because enrolling late can make the coverage cost you more for the rest of your life. 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. That's your "Initial Enrollment Period" (IEP). Miss it 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.
If you fail to enroll during your IEP, you can always enroll during the "general enrollment period," which is from January 1 through March 31 of each year -- though that coverage won't begin until July and the late penalty might apply.
There's a little built-in protection against being late for some people: If you're already receiving Social Security benefits as you approach 65, you'll likely be enrolled automatically in Medicare. Many people don't start collecting Social Security that early, though, so this little loophole may not help you. 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 are serving as a volunteer abroad.
Decide on original Medicare or a Medicare Advantage plan
Next, choose the right plan for yourself. Medicare enrollees get to choose between original Medicare, featuring parts A and B, and Medicare Advantage plans, which are sometimes referred to as Part C. With traditional (or "original") Medicare, Part A covers inpatient hospital stays, hospice, and skilled-nursing facility stays, while Part B covers outpatient services, such as preventative care, laboratory tests, ambulance services, medical equipment, and necessary doctor services.
Medicare Advantage plans, meanwhile, are administered by private insurers but are regulated by the U.S. government. Each must offer at least as much coverage as original Medicare (i.e., the benefits you'll find in Part A and Part B). Many go beyond that, though, offering broader coverage, such as vision care, dental care, and/or prescription drug coverage. (Those in original Medicare typically buy Part D for prescription drug coverage.) Roughly a third of Medicare enrollees are in Medicare Advantage plans.
So which Medicare plan is best for you and why should you choose one over the other? It depends on your needs and preferences. Original Medicare is accepted by the broadest swath of doctors and you can see them without referrals. So you can find and see a doctor anywhere in the U.S., which is especially handy if you're a traveling retiree. Medicare Advantage plans, often in the format of Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs), feature defined networks of doctors (though some of the networks are quite large) or steeper costs for seeing out-of-network physicians, and they're typically limited to your local region. (Some do, on a limited basis, cover healthcare outside the U.S., unlike original Medicare.)
While original Medicare will often have you footing 20% of many bills with no limit on how much you end up spending, your out-of-pocket costs in a Medicare Advantage plan are capped. (The average out-of-pocket cap was recently $5,223, but many plans feature limits below $3,000 and the limit for both 2016 and 2017 is $6,700.) Once you hit the limit, the plan will pay all further costs. Better still, many plans charge the enrollee nothing in premiums. (The Medicare program pays the insurance company offering it a set sum per enrollee and if the insurer thinks it can make a profit without charging its customers anything, it can do so.) The average monthly premium for Medicare Advantage plans was recently $33.
There's no one-size-fits-all answer when it comes to deciding between original Medicare and Medicare Advantage. Think about what doctors you see, what services you need, and what drugs you take, and compare coverage and costs for available plans. You can check out details for available plans at the Medicare.gov website, which also shows you star ratings for Medicare Advantage plans and Part D (prescription drug coverage) plans in your area. The top score is five stars and you should favor four- or five-star plans.
Once you decide, know that you can change your mind and choose a different plan next year. In fact, it's a good idea to review all your options and their costs each year.
Make full use of your plan
No matter which plan you select, you'll be entitled to lots of preventive screenings at no extra cost to you -- such as mammograms and colonoscopies. Get screened for cancer, diabetes, and anything else your doctor deems sensible. You're also entitled to an annual wellness visit, too, at no extra cost to you. You may be able to access smoking cessation or weight-loss counseling, too, at little to no cost, and some plans may offer discounts on gym memberships or other wellness benefits.
Find out whether your plan offers "telemedicine," too. It's growing in prevalence, and involves giving you access to doctors and other providers via the telephone or Skype-like video calls. You may not want to haul yourself all the way to your doctor's office if you're not feeling well -- and a telemedicine consultation may be a good solution, or at least a starting point.
If you sign up for Medicare on time, choose the plan(s) that suit you best, and then make the most of the coverage you have, you'll be doing a great job of maximizing your Medicare.