What is Medicare?: How do you get covered?

Medicare is a federal health insurance program that's the single largest payer of health insurance in the country. People become eligible when they turn 65. It’s also available for people under 65 with disabilities or those with end-stage renal disease.

You’re automatically enrolled in Medicare when you turn 65. As you approach 65, you’ll receive information about choosing a Medicare plan. This should come three months before you turn 65. You have until three months after your 65th birthday month to pick a plan. That gives you seven months to review your options before making a decision.

The effective date is the first day of the month when you’re eligible for Medicare if you sign up in the months before becoming eligible. If you wait to sign up for Medicare on the month when you’re eligible or the following month, the effective date is the first day of the next month.

What are the different types of Medicare?

There are four types of Medicare. These plans cover specific services:

Most Medicare beneficiaries have Original Medicare (Parts A & B), but Medicare Advantage plans have gained popularity over the past decade. The Centers for Medicare and Medicaid Services expects 42% of Medicare members will have Medicare Advantage in 2021. 

How do you find a doctor who takes Medicare?

One of your biggest concerns with switching health insurance might be: Will I get to keep my doctor?

If you have Medicare or signing up for Medicare, an easy way to find a doctor or to see if your current doctor accepts Medicare is to check CMS’ Physician Compare. The tool lets you search by the provider’s name or the group practice name. You can also look by specialty, medical condition, body part or organ system. That will help you find specialists.

Once you provide the information, the site will give you a list of local providers with profiles and specialties.

Lindsay Engle, a healthcare expert with MedicareFAQ, said one issue to watch for is whether your doctor accepts Medicare Advantage. Doctors who accept Original Medicare (Parts A & B) might not take Medicare Advantage plans. About 96% of physicians accept Medicare, but you may find doctors who aren’t in Medicare Advantage networks.

“Your plan information will tell you what type of plan you're currently enrolled in and what providers or networks you have to use. Your best option is to contact your doctor or physician's office to see what type of Medicare plans they accept,” Engle said.

It's a good idea to check with your doctor to make sure you'll get covered. 

Do I need a Medicare plan if I turn 65?

You don't have to sign up for Medicare at 65. However, it might be a wise idea to at least get Part A -- since it's likely free for you. 

This situation may arise if you turn 65, you plan to work for a few more years, you’re happy with your employer-sponsored health plan and don’t want to give it up. 

By going with a Part A policy, you likely won’t have to pay premiums, can keep your private health plan to help with coverage, including doctor visits, which aren't covered by Part A. 

“Your Medicare benefits will work with your employer coverage,” Engle said.

Medicare and other insurers have something called coordination of benefits (COB). COB figures out which plan pays first for coverage if you have more than one plan.

For instance, if your employer has more than 20 employees, the COB will consider Medicare coverage a secondary payer. If your company has fewer employees, your Medicare coverage is primary and the employer is secondary.

The primary insurer pays initially and then the secondary payer covers its portion up to 100% of the total cost.  

Having more than one type of health insurance is called “dual insurance.” Having dual insurance can help reduce out-of-pocket costs, but also means you may have to play two premiums. Plus, you could face two separate deductibles.

“Medicare as secondary insurance will cost you money. Part B is not premium free. Some beneficiaries choose to delay their Part B coverage if they have group coverage as their primary since it covers outpatient benefits usually. Since employer coverage is considered credible coverage, you won’t be penalized for delaying your Part B enrollment,” Engle said.

You’ll want to run all of those numbers to see whether keeping other coverage makes sense for you when you become eligible for Medicare.

How do I find a Medicare plan?

Not too long ago, people turned 65 and could only enroll in Original Medicare (Parts A and B). Now, seniors have multiple options, including Medicare Advantage.

You can go with Parts A and B, you can add on a Part D plan or you can choose one of many Medicare Advantage offerings.

You’re able to compare plans each year and pick the best one for you. Medicare recommends members consider:

• Costs
• Coverage
• Your other coverage
• Prescription drugs
• Doctor and hospital choice
• Quality of care
• Travel

You also want to make sure your doctors or hospital are considered in-network. You might even want unrestricted access and not need doctor referrals. In that case, you might want to get a PPO, which is more expensive than an HMO but gives you more flexibility.

One way to figure out the plan for you is to check out CMS’ star ratings for the different plans. CMS rates plans between one and five stars with five stars being the highest mark. The ratings take into account membership surveys, quality and performance.

Besides the prestige of earning five stars, health insurance companies get a higher reimbursement from the government when they have a five-star plan.

Medicare Plan Finder lets you compare both traditional and Medicare Advantage plans in your area. The site will ask you a series of questions that will help narrow the number of plans of interest. It will reveal each plan that may make sense for you, including premiums, deductibles, estimated annual health and drug costs and overall rating.

Once you find the plan for you, you can choose it on the site and fill out the necessary paperwork.

Should you choose Original Medicare or Medicare Advantage?

Which Medicare works best depends on your situation, your area and what plans are available.

Engle suggests sticking with Original Medicare (Parts A & B) if you want to keep your current doctor who doesn’t accept Medicare Advantage and the plan has better overall coverage than Medicare Advantage.

“You should consider a Medicare Advantage plan if you want medical and drug coverage combined into one plan, limit annual out-of-pocket costs and extra benefits like dental, vision and hearing,” Engle said.

You may find a plan with low premiums, but remember you get what you pay for. Plans with low rates may have high deductibles and out-of-pocket costs.

If it’s your first time choosing a Medicare plan, Engle suggests speaking to a licensed agent who works with multiple carriers. The expert will consider all of your options. Don’t rely on a friend or family member.

“Medicare is always changing, part of an agent’s job is to stay up to date with the most recent changes. Also, what works for your friend or family member may not work for you. Everyone has different healthcare needs,” Engle said.

When can I change Medicare plans?

All Medicare beneficiaries can switch plans once a year. This happens during the annual open enrollment. Medicare’s open enrollment runs between Oct. 15 and Dec. 7. Any changes will take effect on Jan. 1.

During that time, you can switch Medicare Advantage plans, change from Medicare Advantage to Original Medicare, swap Original Medicare for Medicare Advantage or change Part D plans. 

There's another open enrollment period from Jan. 1 to March 31, but it's limited to only switching Medicare Advantage plans or moving from Medicare Advantage to Original Medicare. 

However, Medicare beneficiaries can also make changes during any time of the year if they go through certain life events. That can include if you move or you lose other health insurance coverage.

Here are some events that trigger a special enrollment:

• Loss of coverage
• Changes in household, such as a death
• Changes in residence, such as moving to another state
• Changes to your income

If you go through an eligible life event, you can make changes during a Special Enrollment Period. Changes made during a Special Enrollment Period usually kicks in the first day of the next month.

What is Medigap?

Medicare, just like any health insurance, can get pricey. Medigap is one way to help you pay for healthcare costs.

Medigap is a supplemental insurance. Original Medicare pays for 80% of your medical needs. Medigap covers the remaining 20% and out-of-pocket costs.

This is not a health insurance plan. Instead, the policy assists you to pay for services in Medicare Parts A & B. Those costs include copays, coinsurance and deductibles.  

Medigap kicks in after Medicare pays its amount for covered healthcare services.

Some Medigap plans offer coverage not available in regular Medicare. For instance, you can get Medigap coverage for when you travel outside the country.

Private companies sell Medigap policies to individuals and not couples or families. So, if you and your spouse both want Medigap coverage, you each need to buy a policy. 

Medigap policies vary greatly, so make sure to read the fine print to see which one works best for your situation. 

“If you want all of your healthcare costs covered, a Medigap plan is your best option,” Engle said.

No matter which Medicare plan you choose, make sure to review your choices each year. Plans change each year, so make sure you have a plan that works for you.