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With nearly 10,000 people turning age 65 each day, yes, each day, understanding Medicare and how it works has become an increasing larger topic of discussion.  Here is a short breakdown of how Medicare works:

When a person turns 65 OR becomes permanently disabled, they become eligible for Part A – which covers hospital expenses and Part B - which covers medical or clinic type expenses.  Part A is entitled at age 65 as long as you have put in 10 years of work.  Part B is the portion a person has to pay for.  A person is eligible at age 65, others will continue to work past 65 and can hold off taking Part B until they are ready to retire.  Your part A and part B will collectively cover about 80% of your medical expenses, however, there is no out of pocket maximum.  This means that if you have a $100,000 bill, you could be responsible for $20,000 if you only carried parts A and B. 

In order to help reduce those costs, people may sign up for a Medicare Advantage Plan, a Supplement, or a Cost Plan.  These are all designed to help cover the expenses that Medicare covers, but not does cover at a 100%.  They typically also carry an out of pocket maximum to help give a person a cap on what they may have to pay out of pocket for medical expenses.  

Part D is the prescription drugs.  While this piece is not required, if you don't take it when first eligible, you may be penalized 1% per month that you did not have it. That is taken times the national average for drug plans and that is what you pay.  For example, you waited 48 months to take a plan.  You would have a penalty of 48% X monthly average (currently around $33) or roughly $16 extra per month you would pay.  You are exempt if you have other credible coverage such as on an employer plan beyond 65 or have VA benefits.

Currently we offer a monthly Medicare 101 workshop.  Check our events page or our Facebook page for dates and times.  You can also call us at our office.  If you are turning 65 within the next 6 months, we highly recommend attending!