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It’s open enrollment season: Whether you get health insurance through an employer, buy it from a state or federal exchange, or qualify for Medicare, it’s time to do some homework and sign up for a 2018 plan.
If you’re fortunate enough to have Medicare — the federally subsidized health insurance program primarily for folks ages 65 and older — note that open enrollment runs from Oct. 15 to Dec. 7.
Don’t wait until the eve of your 65th birthday to start thinking about Medicare coverage, however. Becoming eligible is a relief for many retirees, but signing up for a Medicare plan is a complex process.
For a smoother transition, learn the following facts well before you sign up for coverage. If you’re already a Medicare beneficiary, review these facts before re-enrolling. Here are seven facts you must know about Medicare.
1. You’re not alone
Medicare can be confusing, both for new and existing beneficiaries trying to navigate open enrollment. The latest edition of the “Medicare & You” guide that beneficiaries receive every year is 136 pages.
If you find yourself overwhelmed, know that help is out there.
One free option is the State Health Insurance Assistance Program, or SHIP, for your state or territory. Federal grants fund these programs, which offer counseling and assistance to Medicare beneficiaries. To learn more about them, visit the national SHIP website.
Another option is to use one of several services that, for a fee, will do the heavy lifting for you. You’ll find an example in our Solutions Center: Just click on the Medicare Assistance Button.
2. There’s an alphabet soup
Medicare is so complex that even its alphabet doesn’t make much sense. Still, fully understanding the ABCs of Medicare is critical to making the right choices for your health and budget.
The two main types of Medicare coverage are known as Original Medicare and Medicare Advantage.
Original Medicare plans are coverage you obtain directly from Medicare. This type of plan includes:
- Medicare Part A (hospital insurance)
- Medicare Part B (medical insurance)
If you opt for an Original Medicare plan and also want prescription drug coverage, known as Medicare Part D, you must buy such a plan separately.
Medicare Advantage plans are offered by private insurance companies, like PPOs or HMOs, that are approved by Medicare. A typical Medicare Advantage plan includes:
- Medicare Part A
- Medicare Part B
- Usually Medicare Part D
3. Medicare is not free
Health care expenses don’t end when Medicare begins. Like health insurance coverage that you obtain through an employer, Medicare coverage entails costs like premiums and deductibles. Plus, it doesn’t cover all health care-related expenses, as the next section of this article explains.
So it’s perhaps no wonder that two married 65-year-olds who retire in 2017 would need $275,000 to cover their medical expenses throughout retirement, according to the latest annual estimate from Fidelity Investments.