Turning 65 and Understanding Your ABCs … and D

If you are turning 65 within the next nine months, then you have some very important decisions to make about Medicare coverage. Do you understand the new alphabet and your ABCs and D?

If you qualify for A, then you have the option to pur- chase B. You must have A and B to get C, but not necessar- ily D. The numerous options for C can be very confusing. D can change every year and may include a penalty if not pur- chased when eligible. F will no longer be available for new enrollees in 2020, however G may be a good alternative.

As an American citizen born before 1938 who has worked for 40 quarters and paid taxes, then you qualify for Part A. Most individuals will have no monthly premiums, but will be responsible for deductibles and copayments. Medicare Part A pays for hospital, skilled nursing, hospice, and home health care costs.

You’ll also likely want Part B. Medicare Part B has a monthly premium that starts at $135.50 for most individuals. After you have satisfied an annual deductible of $185, Part B will cover 80 percent of the costs for doctors, outpatient surgery, durable medical equipment, and other medical necessities required to keep you alive and well.

Now that you have some healthcare coverage, you’ll need to consider a Part D plan to pay for prescription drugs. Part D plans are also sold through insurance companies, and finding a suitable plan will depend upon what medi- cations you take and the pharmacy you visit. With most companies, there is also a mail order option. Even if you are not currently taking any medications, it would be advisable to enroll in Part D to avoid future late enrollment penalties. If you plan to work past age 65 and have creditable coverage through an employer, then you may not need to sign up for D…yet.

With “original” Medicare Parts A and B, there are deductibles, copayments, and coinsurance that leave gaps in coverage. Consequently, many people purchase a Medicare supplement or Medigap plan to pay what original Medicare does not. Plans range from A through N and can vary in cost and benefit.

In 2020, Plan F will no longer be available for new Medicare enrollees, but will be honored for those already enrolled. Depending upon benefit selection and insurance company, monthly costs can range from $50 to $175. These plans are guaranteed issue, renew annually, and increase in cost as you get older.

Medicare Advantage Plans, also called Medicare Part C, offer an alternative to purchasing Medigap and Part D pre- scription drug plans. Medicare Advantage Plans combine parts A, B, and D into one card that does it all. There are multiple plans available in central North Carolina, but cover- age and cost may vary depending upon where you live.

Medicare Advantage Plans must provide the same or better coverage as original Medicare, but may also offer gym memberships, dental, vision, hearing, transportation, and meal benefits. Some of these plans are offered with no or low monthly premiums, but rather charge copays and co-insurance.

For those turning 65, the Medicare IEP (Initial Election Period) is a seven-month period for new Medicare enrollees. It begins three months before your birthday month and con- tinues for three months thereafter. If you sign up early, then coverage will begin on the first day of the month you turn 65. Don’t be tardy and sign up after your 65th birthday.

Learning the new Medicare alphabet is essential for getting the most value from Medicare. It is extremely important to seek advice from an insurance professional who represents multiple insurance companies. He or she will help you select an individualized plan that meets your specific needs. Medicare insurance professionals generally do not charge for a consult and receive their compensation through the insurance provider. Their compensation is not affected by what you pay for your coverage.

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