Medicare Health Insurance Options for People over 65

Prior to retirement, you’re likely covered by your employer’s health insurance plan. However, what do you do for health insurance after retirement? Many people postpone retirement until age 65 merely because they need to wait to retire until they qualify for the government’s healthcare program, Medicare. You’re eligible for Medicare if you or your spouse worked for at least ten years in Medicare-covered employment, and you’re age 65 or older and a citizen or permanent resident of the United States. If you’re not yet age 65, you may qualify for coverage if you have a disability.

How do you know which part of Medicare you qualify for? And how do you know you’re fully insured? Here are some guidelines:

If you’re eligible for Social Security retirement benefits, you’re automatically eligible for Part A of the Medicare program, beginning with the first day of the month in which you turn 65. If you started Social Security retirement benefits before 65, you don’t need to do anything to begin receiving Medicare Part A benefits. If you’re eligible for but aren’t yet receiving your Social Security retirement benefits, you must apply separately for Medicare Part A.
If you’re receiving Social Security retirement benefits, you’re automatically enrolled in Medicare Part B at the time you become eligible for Medicare Part A, unless you elect to opt out of Part B coverage.

Even though you must pay a monthly premium for Medicare Part B, this plan is extremely cost-effective for the benefits provided.

The following tables provide basic information about Medicare coverage.

Medicare Benefit Summary: Part A
	Benefit	Your Cost	Medicare Pays
Hospital	first 60 days	$992	remainder
	61–90 days	$248/day	remainder
	91–150 days	$496/day	remainder
	150+ days	100%	nothing
Skilled Nursing	1–20 days	nothing	100%
	21–100 days	$124/day	remainder
	100+ days	100%	nothing
Home Health	1–100 days	nothing for services, 20% for equipment	100% for services, 80% for equipment
Hospice	unlimited*	outpatient drugs and inpatient respite care	remainder

* Must be ordered by physician

Medicare Part B starts with a $93.50-per-month premium (based on income).

Medicare Benefit Summary: Part B
	Benefit	You Pay	Medicare Pays
Medical	unlimited	first $131 + 20%	remainder
Lab	unlimited	nothing	100%
Home Health	unlimited	20% of equipment	remainder
Outpatient	unlimited	first $131 + 20%	remainder

Part C: Medicare Advantage Plans

Medicare Advantage Plans are approved by Medicare but offered through private insurance companies. Sometimes these plans can be comparable in benefits but more cost-effective than the original Medicare plan combined with a Medicare supplemental (also known as Medigap) policy. These plans vary greatly in cost and benefits, state by state, so research your plan options thoroughly before you join.

Part D: Medicare Prescription Drug Program

This program was new as of 2007. The Medicare prescription drug program allows anyone eligible for Medicare to pay extra insurance premiums and receive different levels of prescription drug coverage. For more information, visit the Center for Medicare and Medicaid Services (CMS). This site provides online tools that can help you compare plans that are available in your area.

Another great resource is the Department of the Elderly in your state of residence. It has counselors on hand to assist you with finding the best plan for your needs. The Medicare Web site offers a list of state offices.

Medigap

To be fully insured, you might want to supplement your Medicare coverage with Medicare supplemental insurance, also known as Medigap, which generally pays the deductibles and copayments not covered by Medicare Parts A or B. Medigap policies are sold by private insurance companies to fill in the gaps in the original Medicare plan. Most states have now adopted regulations limiting the sale of Medigap insurance to no more than the standard policies.