I. The Basics of Medicare

There are four separate Medicare plans for which you may be eligible, each of which has different coverage amounts and financial obligations for medical treatment and medication. Some plans are designed to complement each other, so you may need to consider more than one of these options.

Original Medicare

Original Medicare consists of two separate coverage types, Medicare Part A and Medicare Part B, both of which are managed by the federal government. Both parts cover the recipient’s access to primary care physicians, specialists, and hospitals that accept Medicare. The plans are considered “fee for service,” meaning that you’ll pay for part of the cost of services, and Medicare will pay for the rest. Most plans have a cap on how much Medicare will pay for each medical treatment or physician visit. Some premiums may be eligible for payment through deductions from your Social Security check.

Prescription medications are not covered unless you’re in the hospital. To have outpatient medications covered, you will need Medicare Part D. You may select your health care provider as long as they’re accepting new patients and are willing to accept Medicare for payment. Cosmetic surgeries, dental care, and long-term health care are not covered by Original Medicare.

Every year when you re-enroll, you’ll set a deductible for your health care that you must pay out-of-pocket before Medicare begins paying for services. Once you’ve reached the deductible, you’ll pay your co-pay and any co-insurance portion, and Medicare will pay the rest. The service providers you visit, including skilled nursing facilities and home health care providers, will be responsible for filing Medicare claims for your treatment, and you’ll be billed separately for your responsibility.

Medicare Part D

Medicare Part D is the prescription medication coverage plan from Medicare. It’s a supplemental program with optional enrollment, which may help offset the cost of your daily medications. Part D is a stand-alone program for medication only, with premium payment assistance available for individuals on a limited income. Enrollees pay a monthly premium to the Medicare Part D carrier, are required to use one of the carrier’s participating pharmacies to fill their prescriptions, and are responsible only for a co-pay.

Medicare Part D’s financial coverage follows four steps. The first step is the annual deductible, which you must pay out-of-pocket until the amount is reached. You then move to the initial coverage, when you are responsible for a co-pay for each prescription, and Medicare will pay the rest. This coverage lasts until the coverage cap is reached, which may vary from year to year.

Once you reach this cap, you’ll move to the coverage gap. You’ll still split the cost of each prescription with Medicare, although your out-of-pocket expense is higher. The cap for the coverage gap is typically higher than it is for the initial coverage. Once you’ve met this cap, Medicare Part D offers catastrophic coverage for medications. Under this phase, Medicare pays 95% of your medical costs, and you pay the remaining 5%.

There are some restrictions with regard to which medications are covered, whether you’ll need to opt for generics over brand name medications, and how often you can have certain restricted medications refilled. If you are already taking certain medications prior to enrolling in Medicare Part D, check with the plans you’re considering to see if your current prescription regimen will be covered.

Medicare Advantage

Medicare Advantage plans differ from Original Medicare in that these are private plans that pay for coverage instead of originating with the federal government. Medicare Advantage is also referred to as Medicare Part C. Coverage under Medicare Advantage plans is either an HMO or a PPO network of hospitals, physicians, and specialist providers. Under these plans, the premiums are lower, and there is typically a Part D benefit included. Some plans even include basic vision and dental coverage.

If you select the HMO option, you’re restricted to health care providers in your network. PPO plans may be a little more flexible as far as the physicians you can visit, but your costs for visiting an out-of-network provider will still be higher than the co-pay for an in-network provider. In addition, Medicare Advantage benefits and providers change each year, so your preferred physician or a particular benefit may not be available from one year to the next.

Deductibles for Medicare Advantage plans vary, so it’s important to review your options before selecting a plan. Expect to have co-pays for all services, from basic check-ups to in-hospital stays and laboratory services. In addition to the co-pays for services, you may also have co-insurance obligations for specialty equipment and services, such as digital imaging, radiology, and chemotherapy.

Medicare Supplement Plans

Medicare Supplement Plans are also referred to as Medigap Plans and cover parts of your health care that Original Medicare doesn’t cover. These are private insurance plans that can help offset the costs of co-pays, co-insurance, and deductibles that you’re responsible for under your Medicare plan. If you’re enrolled in Medicare Part A or Part B, you may be eligible for supplemental coverage. However, people covered under Medicare Advantage (Part C) plans are not eligible for these plans.

The types of plans for which you may be eligible vary from state to state and can include one of 10 different Medigap policies: A, B, C, D, F, G, K, L, M, and N. Individuals over age 65 may have greater access to different plans while persons under age 65 may have more restrictions. You’ll also want to be aware of which plans don’t cover preexisting conditions, so make sure to review each plan’s coverage carefully.

II. How to Enroll in Medicare

There are several options you can use to enroll in Medicare, so choose whichever avenue you feel most comfortable navigating.

  • Online at www.SocialSecurity.gov
  • Call Social Security at 1-800-772-1213 (TTY users 1-800-325-0778), Monday through Friday, from 7 AM to 7 PM
  • In-person at your local Social Security office

Each of these options also has help available from a case manager for any questions that you may have.

How to Enroll Online

Begin your online enrollment process by visiting the Social Security Department website. You will find lists of each plan’s coverage on the site, so you can review each plan carefully to determine which one fits your needs best. Pay attention to any documents that you’ll need to submit, such as proof of residency and age, as well as sources of income if you’re planning to enroll in a supplemental plan. Don’t forget to print and save any confirmation pages for your records.

III. When to Enroll in Original Medicare

If you are receiving Social Security (SS) benefits before you turn age 65, you’ll be automatically enrolled in Medicare. Additionally, if you are receiving retirement benefits from the Railroad Retirement Board (RRB), you’ll be automatically enrolled in Medicare Part A. However, if you’re still covered by your own or your spouse’s insurance through an employer or if you aren’t yet receiving Social Security, you’ll need to manually enroll in Medicare within a certain time frame to avoid a penalty.

Original Medicare Initial Enrollment Period

Many individuals are automatically enrolled in Medicare Part A. However, if you need to manually enroll in Medicare, note that you have a seven-month window to enroll, including three months before your 65th birthday, the month of your birthday, and then the three months following your 65th birthday.

If you aren’t receiving Social Security as you near your 65th birthday, you may sign up for Medicare during the Initial Enrollment Period (IEP). You may also opt to enroll at a later time if you haven’t yet started receiving retirement benefits.

If you don’t qualify for SS or RRB benefits yet, you won’t be automatically enrolled in Original Medicare. You’ll have to manually enroll during your IEP. You may not be able to receive premium-free Medicare Part A, however, so the cost of your health care premium will depend on how long you worked and how much you paid in taxes. If you opt for Medicare Part B, you’ll have to pay the premium for this plan.

Original Medicare General Enrollment Period

The second option for Medicare enrollment, if you didn’t enroll during your seven-month IEP, is the General Enrollment Period (GEP). This is an open enrollment period for Original Medicare that lasts from January 1 through March 31 of each year. However, if you choose to enroll during this time, you may have to pay a late enrollment fee for not signing up when you were first eligible.

Original Medicare Special Enrollment Period

f you are already covered by group medical insurance through a union or your employer, you may not wish to sign up for Medicare when you are first eligible. Once you no longer have group insurance or you decide you wish to switch to Medicare, you may sign up anytime, providing you’re covered by your existing insurance or during the Special Enrollment Period (SEP), typically a period when you won’t have to pay a late enrollment fee. This is an eight-month period that begins either the month your group coverage ends or the month your employment ends. Note that COBRA and retirement health insurance plans are not considered current employer coverage and don’t qualify you for the SEP.

IV. Enrolling in Medicare Part D

You may choose to enroll in Medicare Part D online when you apply for your Original Medicare benefits. You may also have the option to have your Part D payments withdrawn from your Social Security check. Review the plans available in your area, and complete your application through one of the following methods:

  • Call 1-800-MEDICARE (1-800-633-4227). Counselors are available to guide you through your options and enroll you in a plan.
  • Use Medicare’s Plan Finder tool to compare plans and enroll.
  • Call the plan you wish to enroll in, and a representative can help you.

Medicare Part D Initial Enrollment Period

You can enroll in Medicare Part D during the same IEP in which you enroll in regular Medicare. Bear in mind that you’ll have to manually enroll in Medicare Part D, as it’s not available in every part of the country.

Medicare Part D Annual Election Period

If you don’t elect Medicare Part D during your IEP, you’ll be able to sign up during the Annual Election Period (AEP) – also known as the Open Enrollment Period – from October 15 to December 7 each year. You can also make changes to your Part D coverage, such as switching from one plan to another, changing from a Medicare Advantage plan that doesn’t have Part D coverage to one that does (or vice versa), or dropping your Part D coverage entirely.

V. Enrolling in Medicare Advantage

Medicare Advantage is a private health care plan, which may or may not include Part D coverage. To be eligible for Medicare Advantage, you must have Medicare Part A or Part B. There are a few health exclusions as well, so check with the plan’s policy before deciding if you wish to enroll. If you enroll in a Medicare Advantage plan, you still are responsible for paying your Part B premium. Here’s how to enroll in Medicare Advantage:

  • Use the Medicare Plan Finder to search for plans.
  • Check the website to see if you can enroll online, or complete and mail a paper enrollment form, which you can obtain by contacting the plan’s carrier.
  • For questions, call 1-800-MEDICARE (1-800-633-4227).

Medicare Advantage Initial Coverage Election Period

Your IEP for Medicare Advantage is typically the same period as your Original Medicare IEP. However, this eligibility period will change if you delay your Part B enrollment. In this case, your Medicare Advantage IEP won’t begin until you’ve already enrolled in Part B. If you’ve delayed your Medicare Part B enrollment, you may sign up for Medicare Advantage during either the General Enrollment Period or Special Enrollment Period.

Medicare Advantage Annual Election Period

The Annual Election Period (AEP), also known as the Open Enrollment Period (OEP), is when beneficiaries can enroll in Medicare Advantage, change their plans, add Part D coverage (if your Advantage plan doesn’t include it), or change from Medicare Advantage to Original Medicare. This AEP occurs each year from October 15 to December 7.

There is also a secondary Open Enrollment Period from January 1 to March 31 every year. During this time, you can drop your Advantage Plan, revert back to Original Medicare, switch to another Advantage Plan, or add or drop a Part D coverage plan.

Medicare Advantage Special Enrollment Period

This enrollment period covers special circumstances and can occur throughout the year, such as if you move into or out of a Part D plan’s coverage area.

VI. Enrolling in Medicare Supplement Plans

Enrollment for all Medicare plan types has limited periods during which you can add, drop, or change coverage, although enrollment for the Medicare Supplement plans, which may pay for gaps in coverage such as co-pays and coinsurance, is more limited than Original Medicare and Part D.

The reason for the more restrictive enrollment period is due to the fact that insurance carriers can’t use medical underwriting oversight during enrollment time. Underwriting is the process that considers whether or not you are eligible for coverage, based on your health history and existing medical conditions. If you apply for supplemental Medicare outside of the OEP, your prospective carrier may reject your application or change your plan based on your health history.

When to Enroll in a Medicare Supplement Plan

Your Medicare Open Enrollment Period may be the best time to enroll in a Supplement Plan. This OEP lasts six months, beginning the first day of the month in which you turn 65, provided that you’ve already enrolled in Medicare Part B.

Special Enrollment Periods for Medicare Supplement Plans

Outside of the OEP for Medicare, you may still be able to enroll in supplemental coverage if you have “guaranteed issue” rights. These rights mean that insurance carriers can’t deny you coverage, make your wait for benefits, or refuse to provide coverage due to preexisting conditions. Special situations include:

  • Your supplemental plan misled you or committed fraud
  • Your supplemental provider went bankrupt
  • You dropped your Medicare Supplement to take advantage of your right to try the Medicare Advantage plan and you wish to switch back — note that this must occur within a year of the switch
  • Your Medicare Advantage plan stops coverage in your area
  • You move out of the coverage area for your Medicare Advantage plan