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Mastering the ABC’s and D’s of Medicare

If you can remember the first time Paul McCartney sang “When I’m 64,” read on. This column’s for you.

Hard as it may be for some to realize, the first wave of Beatle fans have reached that once-unimaginable milestone and stand on the threshold of qualifying for Medicare on their 65th birthday. Each day, another 8,000 baby boomers become eligible for the nation’s largest health insurance program.

True to form, the generation that has gone through life believing it’s invincible hasn’t given much thought to Medicare. Indeed, research from the National Association of Insurance Commissioners has found that about two-thirds of boomers aren’t familiar with the program’s options.

That’s cause for concern. If you don’t understand the fundamentals of Medicare, you can’t make informed decisions about your health care. So here’s the short course – call it Medicare 101.

Medicare comes in four parts. Part A covers hospital stays, skilled-nursing care, home health services and hospice care. You won’t pay a monthly premium for Part A if you or your spouse paid Medicare taxes during your working years.

Part B covers doctor visits, preventive services, outpatient hospital care and medical equipment. You’ll pay a monthly premium for Part B — $104.90 for new enrollees this year. If your income is higher than $85,000 as an individual or $170,000 as a couple, you’ll pay a higher premium.

To cover your prescriptions, you’ll also buy a Part D drug plan from one of the private insurance companies in the business. The monthly premium, annual deductible and other out-of-pocket costs will vary according to the particular plan you choose.

Because Original Medicare usually pays for most, but not all, of a patient’s health care costs, you may consider shopping for additional coverage or for help with the out-of-pocket expenses that Medicare doesn’t pay for.

Under Part C, you can join a Medicare Advantage health plan sold by private insurers. In addition to the services that Original Medicare covers, Medicare Advantage plans usually offer extra benefits, like dental, hearing and vision care. Most include drug coverage. The plans may also charge a separate monthly premium on top of the Part B premium.

As an alternative to a Medicare Advantage plan, you can supplement your Medicare coverage by buying “Medigap” insurance. In return for a monthly or quarterly premium, the private policies fill many of the “gaps” for deductibles, co-payments, co-insurance and other charges not picked up by Medicare.

Besides mastering the ABC’s and D’s of Medicare, you’ll need to know what to do to get your benefits. That’ll depend on whether you’re already collecting Social Security.

If you’re on Social Security, you’ll be automatically enrolled in Medicare’s Part A and Part B. About three months before your 65th birthday, you’ll get a Medicare card and letter in the mail explaining that your monthly Part B premium will be deducted from your Social Security check.

You’ll have the option of declining Part B coverage. But unless you have health care coverage through your or your spouse’s current employer, delaying enrollment in Part B could result in a penalty – in the form of a higher monthly premium — when you do sign up later.

There’s also a penalty for joining a Part D drug plan later.

If you’re not on Social Security when you turn 65, you’ll need to sign up for Medicare yourself. The Social Security Administration, which is responsible for enrolling most people in the health insurance program, says you can start the process about three months before your 65th birthday.

Don’t fret. It’s not hard. There’s a new online application that takes less than 10 minutes to complete. Visit www.medicare.gov or request a copy by calling Medicare’s toll-free help line at 1-800-633-4227.

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