The world of Medicare is complex and can feel overwhelming. It helps to hear from those who live in it—and to start with the basics.
Using a broker can help you navigate the ins and outs of Medicare. So, what exactly is Medicare? It’s the federal health insurance program for people 65 and older and certain younger people with disabilities or conditions (see if you’re eligible here). To gain a better understanding of Medicare, let’s answer the six questions SELCO Community Credit Union’s Medicare specialists hear most often.
1. What’s covered by original Medicare?
There are two government-funded parts of Medicare, Parts A and B, which make up “Original Medicare.” If you’re on Social Security already, you’ll be automatically enrolled into Medicare Part A and B when you turn 65.
- Part A: Hospital Insurance. Part A is available to anyone 65 or older who has worked—or whose spouse has worked—and paid taxes for a minimum of 10 years. Coverage pays for inpatient hospital costs and is (usually) premium-free.
- Part B: Medical Insurance. Part B covers services from doctors and other health-care providers, outpatient hospital care, home health care, medical equipment, and some preventive services. If you’re eligible for premium-free Part A, you’re also eligible for Part B. However, if you pay a premium for Part A, you’ll need to meet certain requirements (outlined here). Premiums for Part B vary by income level but average $150 per month.
2. What isn’t covered by original Medicare?
Not everything is covered under Original Medicare, which is why additional plans are available. Examples of what isn’t covered include some out-of-pocket costs, prescription drugs, and routine dental and vision care. “In our experience, over 90% of people who use Medicare select a plan that provides coverage beyond Original Medicare,” said Nick Bloxham, Vice President of SELCO Insurance Services. (Here's the full list of items and services not included.)
Not everything is covered under Original Medicare. Additional plans can help fill those gaps.
To help fill the gaps, there are three privately obtained Medicare options to consider, each with their own premiums that can vary depending on provider:
- Part C: Medicare Advantage. This plan bundles Parts A, B, and D (Prescription Drug Coverage) and provides extra coverage over Parts A and B. It’s offered by private insurance companies contracted with Medicare.
- Part D: Prescription Drug Coverage. Also purchased through a private insurer, Part D offers full or partial coverage for prescription drugs.
- Medicare Supplement Plans (often called MediGap). These plans help fill the gaps in Original Medicare but don’t include long-term care, dental or vision care, or prescription drug coverage.
3. How (and when) do I apply for Medicare?
You can enroll in Medicare up to three months before and up to three months after the month you turn 65. Once you’re ready to sign up, you can apply online or in-person at your nearest Social Security office.
Signing up for Medicare during your initial enrollment window is crucial. It ensures you have coverage in place should the need arise, and it helps you avoid lifelong surcharges on Part B premiums.
4. Can I make changes to my Medicare plan?
Yes! You can update your Medicare Advantage or Medicare Prescription Drug plans during the annual Medicare Advantage open enrollment period, which runs from January 1 to March 31 annually. Open enrollment is from October 15 through December 7 annually and during this period, you can join, switch, or drop a plan. Changes made during open enrollment will take effect the following January.
5. Will I pay more if I use a broker to select and enroll in a plan?
Not in the least. Plus, by using a broker, you gain an additional resource to help answer questions. A broker will try to find the best plan that includes the doctors and hospitals you use and one that offers good coverage for the specific prescription drugs you take. Many insurance brokers, such as SELCO Insurance Services, are independent agencies that sell most of the major plans. This means you’ll have a partner who monitors the marketplace year to year and can recommend if and when you might want to consider a change.
6. Can I sign up for Medicare if I already have health coverage (like through my employer or my spouse’s employer)?
Yes, absolutely. You may enroll as soon as you’re eligible for Parts A and B to fill the gaps of your current health coverage. Visit this page to see what’s recommended for your specific scenario.
You can also stay on your current health coverage plan (or your spouse’s) and delay enrollment until your coverage ends (either yours or through your spouse’s employment). If you delay enrollment, you’ll be given a special enrollment period later that will allow you to avoid any late enrollment surcharges.
As you can see, even direct questions can have complicated answers, but we hope this helped demystify Medicare and make the process slightly less intimidating. “For most of us, this is a daunting process,” said Bloxham. “With so many different plans and options to choose from, it makes sense to choose a trusted expert to help you select the right plan.”