It may come as a surprise, but for many people, health care becomes more complicated after age 65 — not less. With Medicare’s fall open enrollment window open through Dec. 7, it’s important to understand all of your coverage options so you can continue to access the medications and care you need. Here are a few things you should know about Medicare:
1. Some people are enrolled automatically — and some aren’t
If you’re under the age of 65 and already receive Social Security benefits, you will be automatically enrolled in what’s called Original Medicare. This includes Medicare Part A (hospital insurance) and Part B (medical insurance). Note that Medicare Part B carries a premium: Most people pay $148.50 a month in 2021, according to the Centers for Medicare and Medicaid Services, or CMS.
If you’re not receiving Social Security benefits, you can sign up for Medicare during your initial enrollment window (around your 65th birthday) and choose which insurance combination is best for you.
2. Original Medicare doesn’t cover everything
Original Medicare does not cover prescription drugs, custodial care or most hearing, vision and dental care. Medicare only partially covers some services, such as hospitalization, ambulance services and nursing home care, which means you could be responsible for copays and deductibles.
There are ways to cover at least some of the gap, with Medicare Supplemental Insurance (or Medigap) plans, or by opting for the privately administered alternative to Original Medicare called Medicare Part C, or Medicare Advantage (more on that below). You may also qualify for a state-sponsored Medicare Savings Program, which can help cover deductibles, copayments and more.
3. Medicare Part D covers prescription drugs — and isn’t really optional
Original Medicare includes only Parts A and B. That means if you take any prescription medications, or plan to — and don’t want to pay for them out of pocket — you’ll need to add Medicare Part D to your coverage. This can be done as an add-on to Original Medicare or bundled with a Medicare Advantage plan. Medicare Part D premiums average about $33 a month, according to the CMS.
Signing up on time for Part D is especially important because there’s a late-enrollment penalty if you miss your eligibility window. Medicare drug coverage can vary by medication, so start your research early to make sure your plan includes everything you need. Even if you don’t take medication now, enrolling in Part D coverage can help prepare you for future prescription costs.
4. Fall open enrollment isn’t the only window
When you become eligible for Medicare, you have a seven-month initial enrollment period to sign up, which starts three months before your 65th birthday month and ends three months after. If you miss this window, you may face late enrollment penalties for Medicare Part B (medical insurance) and Medicare Part D (prescription drug coverage). According to the Social Security Administration, you should sign up for Medicare at age 65 even if you’re not planning to retire yet.
If you’re switching to a Medicare Advantage plan, you can do so during the Medicare open enrollment period, which runs every year from Oct. 15 to Dec. 7. Any new plans or changes you make during this period are effective starting Jan. 1.
There are also special enrollment periods for certain situations, like a significant change to your financial or medical circumstances. If you’re currently on a Medicare Advantage plan and want to switch to Original Medicare, you can do so from Jan. 1 to March 31. If you’re over 65 and still covered by an employer group health plan, Medicare allows you to sign up for Medicare Part B without penalty during a special enrollment period: the eight months after your job or coverage ends.
5. Medicare Advantage can bundle your health care
Medicare Advantage plans, also known as Medicare Part C, are Medicare-approved plans from private insurance companies that bundle your Part A and Part B coverage with other benefits. This is usually prescription drug coverage, but Medicare Advantage plans can also include many vision, hearing and dental benefits that Original Medicare does not.
Medicare Advantage plans are all-in-one, more like traditional insurance, but they come with less flexibility. You may pay lower out-of-pocket costs for most services, but higher fees if you want to see a specialist out of your network. Depending on your location and individual health care needs, this may be a good option.
6. It’s complicated, but there are resources to help
“People are often shocked at the cost,” says Katy Votava, president of Goodcare.com, who has a doctorate in health economics and nursing. She explains that Medicare enrollment is often more complicated than a one-time sign-up: It requires ongoing choices and changes for many patients. According to Votava, the right Medicare combination heavily depends on what medications you take and what health care providers you see, as well as your location and income.
Votava recommends looking into the State Health Insurance Assistance Program, or SHIP, at shiphelp.org to find free Medicare community educational services near you. SHIP can help you figure out what financial support you qualify for depending on your income level, region and state, and assist you — or the parent you care for — with enrollment when your window opens.
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Dalia Ramirez writes for NerdWallet. Email: [email protected]