Medicare Basics Explained

 

For the last several years, a unique ID number has been used instead of your SSN.

Turning 65 is a milestone in anyone's life. Studies indicate that you have a statistically good chance of living another 18-21 years. Of course, your mileage may vary. Still, it is nice to know your odds look pretty good for having a long time to enjoy living.

65 is also when most of us grab the brass ring of health care: Medicare. The sense of relief in receiving that red, white, and blue card is immense. Not only are you less likely to be put in the poor house by a disease or illness, the lack of all the paperwork, forms, and pre-approvals feels like a two-ton weight has been lifted from your shoulder.

If so, then why do I continue to receive so many questions about Medicare? Why are people so confused? Well, to put it simply, the government has made things rather more complicated than need be. The program may be a godsend to many of us, but you have to make some important decisions before you begin. Then, every fall, you are asked if you want to change your mind about anything. Plus, the reality is, there are serious gaps in what Medicare will and will not cover, requiring you to make more decisions that often involve balancing risk against cost.  "

Disclaimer: Just about seven years ago, I made my decisions. Today, I remain comfortable with what I picked: traditional Medicare with a supplemental policy and drug coverage. Of course, that doesn't mean you should follow my lead unless that is what is best for you and your spouse (if married)

I'll do my best to summarize what you need to know. I will be covering Medicare, not Medicaid, which is an entirely different program. As with most federal programs and health insurance coverage, there are enough exemptions and differences to fill 20 posts. I will only attempt to explain the usual, most common situations.

Starting at the beginning, Medicare is a federal program that pays for certain health-related expenses for people 65 and older. While many costs are covered, an individual enrolled in Medicare is responsible for certain deducible and copays. Some services are not covered at all, and others for only a limited period of time.

There are four parts of Medicare:

Part A is hospital insurance. Copays, deductibles, or coinsurance will determine what you pay. Usually, there is no premium for Part A.

Part B is medical insurance that helps pay for doctor visits, outpatient care, health care, and equipment. There is a monthly premium for Part B.

Part C is better known as Medicare Advantage. This is coverage provided by Medicare-approved private insurance companies. All plans must provide A and B coverage, just like Medicare.  Services not covered by traditional Medicare are often included. Roughly 40% of all Medicare-eligible Americans now use an Advantage plan. Some plans have a zero monthly cost but look closely at what you may be doing without. 

Part D is prescription drug coverage. This is also run by Medicare-approved private insurance companies.


Most folks get Part A and Part B automatically. If you receive benefits from Social Security, you will automatically get Part A & B coverage starting the first day of the month you turn 65.  If you aren't yet receiving Social Security (because you are still working or waiting until your full retirement age of 67 (or 70 for extra income), you must sign up 3 months before your 65th birthday to get Medicare coverage.

If you must sign up (as noted above), there is something called the Initial Enrollment Period, which is the period from 3 months before until 3 months after your 65th birthday. If you miss this window, your benefits will be delayed.

If you decide to wait until after the Initial Enrollment Period, there is a general Enrollment Period during the first three months of each year. However, if you use this option, realize your part B premiums will be higher.

Every fall, for roughly 45 days, you can change to or from Medicare and Medicare Advantage, pick a different supplemental or Part D drug coverage plan.

If you are covered by a group health plan at your place of employment and then want to start Medicare, there is another time period, called the Special Enrollment Period, that generally allows you to avoid the higher premiums for a late signup.

With me so far?


Other Factors to Consider

Medicare does not pay 100% of most services. Several free screening tests for those on Medicare, like colonoscopies and mammograms, are covered under the ACA or Obamacare if you prefer. But, most doctor visits, tests, drugs, and equipment are going to cost you money...usually, something approaching 20%. That's where Medigap coverage enters the picture. This is a policy, sold by a private insurance company, that acts as secondary coverage to Medicare and pays most or all of what is left over after Medicare pays what it will.

Just like the rest of Medicare, there is a specific enrollment period for Medigap coverage. You can buy any policy offered for sale in your state, regardless of your health status. The amount of supplemental coverage, the monthly cost, and any deductibles are different for each policy offered. You decide how much supplemental help you want and can afford.

Speaking of costs, Part A Medicare coverage costs you nothing since you already paid into the Medicare fund while you were working. Part B coverage does carry a monthly cost. For 2021 most pay $148.50 per month. There is also a $203 yearly deductible. Part D prescription coverage costs vary depending on the plan you select and the level of drug coverage. 

What is Covered?

There is no simple answer to that question. Medicare publishes a 130-page booklet that still suggests calling them for specifics. But, in general, here is what you can expect:


Part A pays part or all inpatient hospital care, inpatient care at a skilled nursing facility, hospice care services, and home health care services. As you might guess, there are all sorts of qualifications and exclusions for this list, but this is the primary purpose of Part A coverage.

Part B helps cover medically necessary services like doctor visits, outpatient care, durable medical equipment, and several preventive services and screenings.

Part C is the designation of Medicare-approved private insurance companies that has various coverage options and costs. You still have Part A and Part B coverage, but the specifics are likely to be different from original Medicare. Generally, coverage is more complete, but the monthly costs vary widely.

Part D covers some of your prescription drug costs. If you don't need many drugs now, it still may be wise to take this coverage because of late enrollment penalties. Part D is provided by private insurance companies and varies widely in costs and coverage. There are usually copays and deductibles involved. Some drugs require prior authorization. 

Importantly, these items are not covered by Medicare (not a complete list):

• Routine Dental care
• Dentures
• Cosmetic surgery
• Hearing Aids
• Exams for fitting hearing aids
• Long term care (past a limited period each year)

If you'd like more detailed information or see if specific services are covered,  this government website should be your first stop.

The official government handbook Medicare and You is also a must-have resource.


OK, now the fun part. What have I missed or overlooked that you want to pass along? Why did you choose an Advantage plan instead of traditional  Medicare? Are you happy, or do you ever consider switching back? How has Medicare treated you so far?

Personally, Betty and  I have paid for our own health insurance for over 40 years. We made a very deliberate decision to avoid private insurance companies as much as possible. Hence our choice of traditional Medicare, along with supplemental and drug coverage.

Toward The End of My Life I'd Like To Look Back and Say...

Our mortality is never the best topic to keep a party going, impress someone new, or say to a mortgage broker when you're hoping for a thirty-year loan. Religions talk about how to live one's life on earth or to prepare for eternity. But, that messy stage between here and there: not a crowd-pleaser.

Then, why am I bringing it up? Because I am retired, therefore fearless, and ran out of pleasant blog topics this week? No, though each of those reasons would work. I want to make it the focus of this post because I believe it is essential to consider how we will finish the race while still having time to make course adjustments. I'll give you examples of what I mean:

1) I'd like to look back and say I loved often and well. Not in the sense that I had a string of love affairs or relationships (!). Rather, I lived in a way that fulfilled my very human need to be deeply cared for while giving as good as I got. I have concluded that too many people view love as something in limited supply, so they parcel it out to only a few people, Or it is only given when there is an equal or greater flow of love coming back. 

Love given only with an expectation of reciprocation is not really love. This powerful force for good is meant to be spread freely. The "love your enemy" admonition did not continue with, "if he loves you back."  Love, used as a weapon, tool of power, or to get what you want, is coercion or deception. 

2) I'd like to look back and say I didn't always settle for the easy or the quick. While only a children's tale, the Tortoise and the Hare is based on how the world really works. Sure, some hit on an idea or invention and become insanely rich and powerful almost overnight. But, they are the exception, not the rule. 

Most of us build a life with steady steps forward, back a bit, maybe sideways for a time, then forward again before repeating the process. We may not have a specific goal or finish line in mind. But, we have been around the block enough to know shortcuts often leave us lost. Not putting in the time and effort on most anything usually does not end well. Whether a relationship, a financial plan, a career approach, finding a passion or meaning in life, there is work to be done. 

3) I'd like to look back and say I am leaving a positive memory with those left behind. One way to guarantee a smile on my mom or dad's face was to state, quite honestly, that I had no bad memories of my youth. There was nothing they or I had done that left me with a "what if" or "why did you do that" feeling. I don't believe this was a case of selective memory. I just had nothing to build a memoir around that had disasters or rough patches to recount. 

I would very much like my family to say much the same as they remember me. Of course, being separate individuals, we all interpret events in our own way, using our own filters and experiences. Certainly, something thing (or things) I did might not be all smiles and hugs. But, I am doing my best to hold those recollections to a minimum.

4) I'd like to look back and say I don't have very many regrets. Sure, there are times in both my private and personal life that I screwed up. I have occasional dreams of going back and choosing a different response or reaction to something that bothers me. Of course, that's a little unfair: what I have learned in almost 72 years on this earth should mean I would adjust my approach if I knew then what I understand now. 

Even so, I believe I have the opportunity with every decision made every day to choose wisely, to do something that doesn't compromise my principles or cause harm to anyone else. Being true to myself was a common phrase my parents and uncle shared with me often. They understood the biggest fake in the room is the person who takes a position, presents a facade, or makes a choice that is strictly transactional: only for the moment. They knew that ultimately, that falseness would have a cost, one of regrets.

5) I'd like to look back and say my spiritual journey evolved over the years, bringing me closer to the ultimate answers. Not having the answers, certainly. But understanding enough to keep asking questions and working out reasonable answers in my own mind. Even though I have no idea what really happens after death, readings, discussions, and thinking about life's ultimate issues leave me more comfortable with both the possible and the uncertainties. 

A life in balance: is that the ultimate answer?

So, You're Retired: What Do You Do All Day?

First published almost eleven years ago, this post has been viewed over 73,000 times. Even so, most current Satisfying Retirement readers probably haven't seen it. So, with that type of appeal, it seems like an interesting experiment to rerun it.  I have left the description of my routine and all the comments unchanged, though I did use a basic grammar and spellchecker to clean things up a bit. I do notice the names of a few fine folks who are still with me after a decade of posts. To you hardy souls, thank you!

Have fun reading how people report spending their days. Then, add your own thoughts about what keeps you engaged and active.  This will be a timely reminder about how retirement is a time when many of us wonder how we ever had time to work! 

"What do you do?" is usually the first question asked in a social gathering. People seem fascinated by how others earn their living. When you're working, the answer is easy. When you are retired, just saying "I'm retired" isn't good enough. Then comes the inevitable, "So what do you do all day during your satisfying retirement?"

Actually, that follow-up question gets to the heart of the retirement dilemma for many. What do you do to fill your day? I'm hoping the answer isn't watching 6 hours of TV and taking naps. But, what exactly do we do to make the best use of our time, energy, and talents?

I am going to present a brief overview of my day. Then, I'm turning this post over to you. Whether it stays short and centered on me or becomes long and interesting will depend on the number of comments generated. I think all of us are every bit as interested in what someone else does in retirement as we were when we were employed.

"So, what do you do all day?" I begin with breakfast and then a quick read of two newspapers. I used to spend a full hour reading the papers but realized mornings are my peak productive time. Now, I scan the papers and try to be at the computer no later than 7:00 AM.

From then until lunchtime, I write, work on this blog, read other blogs, deal with e-mail, maintain my Twitter presence, and run any essential errands.

After lunch is a 30-minute nap. That short break helps me maintain my energy for the rest of the afternoon. After the nap, three or four days a week, I go to the gym. Like a nap, this is important to me. It helps me maintain my weight, gives me more energy, and helps keep my knees, hips, and back from causing me problems. Maintaining my health is worth this time and money investment.

Then, back to the computer to answer e-mails and more writing.  I try to quit by 4:00 PM.  Guitar practice, a glass of wine, and it is time for an early dinner by 5:15 PM. My evenings usually include a movie,  fiction reading, a little more computer work, and off to bed by 10:00 PM.

Weekends are mainly reserved for family time and something special with my wife. I work as a mentor to recently released prisoners, so some time each weekend is given over to that. I try to complete most of my chores during the week. Saturday & Sunday are kept as open as possible.

That's it. Any day can fill up with activities like yard work, paying bills, or going on a picnic lunch when the weather is nice, but the key parts are as I have listed them. Not very exciting, is it? 

Now, your turn. Other readers and I want to know how you spend your day. Don't feel the need to be as complete as I have been. Maybe you want to highlight a few things you do that are most important to you. Maybe you do something I have not mentioned that is crucial to you.

Whatever the case, please take a few minutes to leave some feedback on your daily routine. The question, "So, what do you do all day?" is universal. I can't wait to read your answer to find out how you are building a satisfying retirement.


 Bob Lowry at September 28, 2010