Americans in their retired years need and deserve the peace of mind of knowing they can receive quality medical care without taking large sums out of pocket. The federal government offers just such a safety-net: Medicare. Put most simply, Medicare is health insurance for those 65 or over, and it’s funded chiefly through payroll taxes while you’re still employed. President Lyndon Johnson signed the plan into law in July 1965.
Those 65 or over can sign up with Medicare as a sole, joint or back-up insurance plan. The effective date of coverage is the first day of the month in which you turn 65. You must enroll in Medicare in order to be covered.
Medicare consists of four parts. Part A pays for hospital bills. Part B is optional coverage that pays for doctor visits and other medical services; most subscribers will pay $96.40 or 115.40 monthly, depending on their circumstances. Part C is another extra-cost option; it includes so-called “Medicare advantage plans” plans, offered by private insurance companies. Part C generally encompasses Parts A and B (often at an enhanced level of coverage), as well as Part D, which features private plans that supplement the prescription drug coverages in A and B. Clearly this gets complicated, so call 1-800-MEDICARE to discuss your specific situation. The “Medicare & You” handbook is another excellent resource, usually updated each year. Check out the 2011 edition at http://www.medicare.gov/publications/pubs/pdf/10050.pdf.
While Medicare may be a godsend, it can also be a mine field. Educating yourself on the ins and outs of this unique program can prevent you from being denied coverage when you need it most. Following are some of the most common misconceptions about Medicare.
- Medicare does not provide family coverage. You can be covered on an individual basis only.
- It’s true that basic Medicare cannot deny you coverage, and that you cannot face higher premiums for being sicker than the average person—but many pre-retirees do not realize that recipients still must pay premiums, co-pays and deductibles. Therefore, chronic illness can still be devastating.
- Your monthly Part B premium may be higher than $115.40 if you are single and earn more than $85,000, or married and earn more than $170,000 together with your spouse.
- If you snooze, you lose! Those who decline to sign up for Plan B during their initial eligibility period may be socked with a permanent increase of 10% for each 12-month period in which they remained uncovered. Their premium will never drop to the rate most others pay!
- Plain-vanilla Medicare does not offer the same menu of services, at the same levels of coverage, as a private health-insurance plan.
- In any case, traditional Medicare does not cover routine dental care, eyeglasses, hearing aids, custodial long-term care, and health care outside the United States.
- A Part C “Medicare Advantage Plan” typically restricts you to certain doctor and hospital networks. You may not be able to continue using your current family doctor or specialists.
Helpful hint: If you feel you have a specific problem that can’t be addressed by calling the routine Medicare number above, try the Medicare Rights Center at 1-800-333-4114.