Ten Common Medicare Questions Answered
Medicare is more complicated than most people think. Here are ten of the most common questions that address Medicare.
With the baby boom generation entering retirement, many pre-retirees have questions about Medicare. People are confused about how the system works and how its inner workings affect their retirement decisions.
These ten questions address some of the most common sources of confusion around Medicare: when to sign up, what to do if you are still working, how much it costs, and more.
"When Should I Sign Up for Medicare?"
You become eligible for Medicare at age 65, and if you currently receive Social Security, you will automatically be enrolled in Medicare.
Part A will be
free.
Part B costs $174.70 per month in 2024, plus an additional amount if your income is over the threshold for the income-related monthly adjustment amount (IRMAA), which is $103,000 for single filers, $206,000 for joint filers in 2024.
You can decline Part B if you do not want it (you may have employer insurance that pays primary to Medicare).
You have a choice if you are not receiving Social Security when you turn 65. Whether you should sign up for Medicare at 65 depends on the insurance you have at that time. Some insurance plans stop when Medicare eligibility begins (65 years old). Other plans work with Medicare—that said, you must still enroll in Medicare at 65 for the two plans to work together.
Additionally, other plans pay primary to Medicare, and you do not need to enroll in Medicare because the plan will cover your bills.
Most insurance plans
do not cover 100% of the bills.
Enrolling in Medicare can give you extra coverage even if you have other insurance that pays primary to Medicare. You must decide if it's worth paying the Part B premium (including the income-related monthly adjustment amount if applicable) to have the extra coverage.
Before turning 65, you need to do two things:
- Call your insurance provider, tell them you are about to turn 65, and ask:
- How their insurance works with Medicare
- If you should enroll in any part of Medicare
- Call the Social Security Administration at 800-772-1213, describe your current plan, and ask if you should enroll in any part of Medicare.
Record both conversations, including the date, the person you talked to, and the advice given; this will allow you to seek equitable relief from possible late-enrollment penalties arising from incorrect advice given by SSA representatives.
"Can I Keep The Same Doctors?"
Probably. Most doctors do accept Medicare.
Sometime before your 65th birthday, you should ask your doctor if they accept Medicare. If not, you will probably need to find another doctor because you will be going to Medicare at some point.
When planning for Medicare in the months and years before turning 65, it's a good idea to develop a relationship with a doctor who accepts Medicare. Some doctors who accept Medicare don't accept new patients, but they will continue to treat existing patients who enroll in Medicare.
Before going onto Medicare, you must decide whether to have
Original Medicare or a
Medicare Advantage plan.
Under Original Medicare, you can go to any doctor in any location who accepts Medicare (suitable for people who travel or have more than one residence).
Under Medicare Advantage, you will be signing on with a private insurance company that provides benefits and services under Medicare Parts A and B. (You still have to enroll in Parts A and B and pay the Part B premiums.)
Most Medicare Advantage plans require you to obtain care from a provider within their network. If you are concerned about keeping your doctor, this is one of the factors that will inform your decision about going with Original Medicare versus Medicare Advantage.
Some Medicare Advantage plans have relatively narrow provider networks that can change, meaning your doctor could always leave the network. If you go with Original Medicare, you will have more choices and stability as far as providers are concerned.
"What If I'm Still Working When I Turn 65?"
If you are still working when you turn 65, you may be able to keep your employer insurance. However, you may still be required to enroll in Medicare.
If your employer plan covers 20 or more employees, that plan will pay primary to Medicare, and you are not required to enroll in Medicare. You may continue as before, keeping your employer plan and delaying Medicare enrollment.
Talk to your benefits administrator. They may advise you to enroll in Medicare Part A. Remember, Part A is free and offers better hospital coverage than most employer plans.
However, if your employer plan is a high-deductible health plan (HDHP) paired with a health savings account (HSA), you may not enroll in any part of Medicare. That's just a rule.
If your employer plan is not an HDHP/HSA and you choose to enroll in Part A, you may also wish to enroll in Part B, which covers doctor visits and medical services.
When you incur a medical bill, your employer plan will pay first up to plan limits; then Medicare will pay up to its limits. Because Part B involves a monthly premium, you must decide whether it is worth paying for the extra coverage. If your employer plan is comprehensive, you may want to delay enrolling in Part B until you stop working.
As noted, if your employer plan is an HDHP/HSA, and you want to keep contributing to that plan, you should not enroll in any part of Medicare. HSA contributions cannot be made by or on behalf of anyone enrolled in Medicare. If you decide to go off that plan and onto Medicare, you can still use the HSA for qualified medical expenses, including Medicare premiums; you can't make continued contributions to the HSA.
Please note that if you take Social Security benefits, including spousal and survivor benefits, you are required to enroll in Medicare; this means that if you are contributing to an HSA, contributions would have to stop.
If you are working and covered by an employer plan that covers fewer than 20 employees, you must enroll in Medicare. These smaller employer plans pay secondary to Medicare; for Medicare to pay primary you must be enrolled.
Sometimes, these under-20 companies do not notify employees that they need to enroll in Medicare at 65, nor do these employer plans notice when a person turns 65. In this case, you would incur a medical bill, and the plan denies it because Medicare is the primary payer.
If you are not enrolled in Medicare, Medicare will not pay; you will be left holding the bill. Even worse, sometimes the employer plan will pay the bill without realizing the person is over 65; when they discover this, they may revoke the payment, again leaving you stuck with the bill.
Some under-20 employer plans voluntarily pay primary to Medicare; however, they have no requirement to do so. If you call your insurance company at age 65 and they tell you that you don't need to enroll in Medicare because they will keep paying your medical bills, get this in writing.
You may want to keep your employer plan as supplemental insurance after enrolling in Medicare, but it would be a different type of plan. Talk to your insurance company or benefits coordinator.
"What About My Spouse? Will Their Coverage Be Affected?"
If you and your spouse are covered under your employer plan when you turn 65, and if you go off the employer plan to have Medicare and outside supplemental insurance,
your spouse may or may not be able to stay on the plan.
Talk to your insurance company or benefits administrator and ensure your spouse is squared away before you leave the plan.
If it is not possible for your spouse to stay on your employer plan after you go onto Medicare, they essentially have two options:
- They can look to their employer for insurance
- They can purchase individual insurance through the ACA marketplace.
"What if I Sign Up for Medicare, Then Get a Job That Offers Health Benefits?"
If your new employer plan offers better benefits than Medicare,
you can disenroll from Part B, then re-enroll when you retire and go off the plan.
Remember, if you are receiving Social Security, you must be enrolled in Part A; this is the law.
Since Part A is free, there is usually no downside to having Part A. However, if your new employer plan is an HSA, you cannot make (or have your employer make) contributions to the HSA.
"I Retired at Age 60 and Went Onto My Former Employer's Retiree Plan. Do I Have To Enroll in Medicare at 65?"
Yes. Most retiree plans work with Medicare once a person turns 65, and you must be enrolled in Medicare for the plan to pay.
You may be able to keep the retiree plan as supplemental insurance if it provides benefits Medicare doesn't cover (such as vision and dental) and covers some of the gaps left by Medicare (such as the 20% coinsurance for Part B services).
Upon turning 65, you should reevaluate your retiree plan. If it's good and your former employer subsidizes the premiums, you may wish to stay on it.
If you pay the premiums yourself, you may be better off entering the open market for Medicare supplemental insurance, either a Medigap policy paired with a standalone Part D Drug Plan or a Medicare Advantage plan.
"I Retired and Went To COBRA. Can I Wait Until It Expires Before Enrolling in Medicare"
No. COBRA generally lasts for 18 months.
When you leave COBRA, you will be outside your Medicare special enrollment period, which ends the eighth month after you retire; this means you can't enroll in Medicare until the next general enrollment period, which starts January 1 and ends March 31 of each year, with coverage beginning the month after enrollment.
If you wait until the COBRA ends, you will have a gap in coverage between the end of COBRA and the beginning of Medicare. You may also face late enrollment penalties.
"Can I Have COBRA and Medicare at the Same Time?"
It depends on your timing. If you enrolled in Medicare first, you can go onto COBRA and keep it as supplemental insurance.
If you went on COBRA before enrolling in Medicare, the COBRA must stop when Medicare starts.
As mentioned, you can't delay enrolling in Medicare until COBRA ends because it would cause a gap in coverage and possible late enrollment penalties.
COBRA is primarily for people who retire before age 65 and aren't eligible for Medicare yet. However, HR people often recommend it, not knowing that it could lead to coverage gaps and penalties.
Additionally, COBRA is expensive. When you enroll in COBRA, you pay the full premium, which may be more than you would pay for Medicare, plus a good supplemental policy with drug coverage.
"How Much Does Medicare Cost?"
Some people think Medicare is a free government benefit.
It's not.
Only Part A, which covers part of the cost of hospitalizations, is free if you or your spouse paid into Social Security for at least ten years.
Part B costs $174.70 per month in 2024—more if your income is over $103,000 (single) or $206,000 (joint).
Those are the monthly premiums. There are also deductibles and coinsurance amounts; this is why most people get supplemental insurance.
You could get a comprehensive Medigap policy for around $200 a month, plus a drug plan for about $40; this would provide reasonably comprehensive coverage covering all of your deductibles and the 20% coinsurance.
However, it would not cover dental, vision, or hearing care. If you are on an expensive drug regimen, you may pay more for your prescriptions.
Alternatively, you could go into a Medicare Advantage plan with monthly premiums ranging from $0 to $200.
Some Medicare Advantage plans offer benefits beyond Medicare, such as dental, vision, and hearing. Some even offer gym memberships. But there would likely be some cost sharing for your doctor visits and prescriptions.
The main point is that people should not retire until they know how much their health care will cost in retirement. Medicare is a good government benefit, but it is not free and does not cover all out-of-pocket costs.
"How Much Does Medicare Cover?"
If you download the latest "Medicare and You" book, you will see all the items Medicare covers.
Part A helps cover inpatient hospital costs, skilled nursing care for a limited time, hospice care, and home health care.
Part B helps cover doctor visits, other medical services, and a range of preventive services, such as flu shots, mammograms, colonoscopies, and more.
Private insurance companies provide drug coverage in association with Medicare.
If you choose Original Medicare, you can enroll in a standalone prescription drug plan.
If you choose Medicare Advantage, you can enroll in a plan that includes drug benefits.
It is essential to go shopping for these additional plans before you enroll in Medicare.
It's also important to understand what Medicare does not cover: Dental, vision, hearing, cosmetic surgery, alternative care such as chiropractic, and care delivered outside the United States.
When you go onto Medicare, it will be essential to plan for these events by taking out additional insurance or by self-insuring—that is, setting aside your savings to cover them.
Dental care can be expensive as people age, and dental insurance policies offer limited benefits. Dental tourism is becoming popular as people go overseas for dental implants, saving money on dental care and getting a vacation as part of the deal.
"Does Medicare Cover Long-Term Care?"
No. Medicare covers up to 100 days of skilled nursing care only following a hospitalization, based on doctor's orders.
Medicare does not cover custodial care. Older people need this care when they have trouble bathing and dressing themselves, but Medicare won't pay for it.
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