Not long ago, a senior friend said to me, "It is unfair to expect seniors to make the most difficult decisions just at the time when it becomes most difficult for us to figure things out."
Perhaps you feel the same way. Here are a few basics to understand before you apply for Medicare.
Qualifying
You qualify for Medicare when you turn 65 or two years after you begin receiving social security disability payments.
Medicare Part A
Medicare Part A is the hospital coverage and (as of this writing) is free to seniors.
Medicare Part B
Part B of Medicare is the medical coverage; it pays the doctors for treating you. Seniors must pay a modest monthly premium for this coverage.
Medicare Part D
Part D is the drug coverage. This is the biggest mess of all. You will need to select a different Part D plan every year. The plans change so even if you carefully selected the best plan for your situation last year, you can't assume that the same plan will be the best for you this year.
Medigap
Medicare supplements or Medigap insurance is designed to cover the portion of qualified expenses for Medicare Part A and Part B not fully covered by Medicare. For instance, Medicare Part A will only cover 80 percent of the cost of a hospital stay. Medigap insurance is private insurance. You can only be guaranteed coverage when you first enroll in Medicare; thereafter, the private companies may choose not to cover you, or charge you higher premiums based on your health.
Medicare Part C
Medicare Advantage plans, designated Medicare Part C, are not Medicare insurance at all. If you choose a Medicare Advantage plan, the Federal Government pays for private insurance coverage (plus they may charge you additional premiums) to provide you with private insurance instead of relying on Medicare. These plans are simpler in that if you choose one, you don't need to worry about Part A, Part B, Part D and a supplement (you can't get Medigap coverage with a Medicare Advantage plan).
For most people, the best plan is not the easiest. Most people are better off with traditional Medicare with a Part D drug plan and a Medigap supplement plan. To get this package, you must enroll when you are first eligible. The key to this plan is the supplement that covers some of the gaps in Medicare. As the government is happy to let private insurers share the risk, and the private insurers are eager to sell seniors coverage subsidized by the Federal Government, there is really no one with a vested interest in telling you that your best plan is likely to get on Medicare with a Medicare Supplement and stay there throughout retirement.
Be aware, however, that none of these plans include any long-term care features. Most seniors will spend some time in a nursing facility before passing on. This cost is not covered with any of these policies. Furthermore, long-term care insurance is prohibitively expensive for most people. It is wise to simply save as much money as you can for the time when you face the prospect of extended nursing care.
It does seem unfair to foist such a complex system on people with so little preparation. During your employment years, your health insurance options were much more limited. Taking the time to learn about Medicare is worth the investment.
