The Basics of Medicare: Your Guide to Federal Benefits
At some point, you're going to have to sign up for Medicare. Here's what you need to know.

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photo of an insurance form The Basics of Medicare: Your Guide to Federal Benefits

If you're reading this, chances are you've already heard of Medicare. As one of the largest of all federal programs, it covers the medical expenses of more than 40 million people each year. These include:

  • American citizens who are 65 or older
  • Foreign residents 65 or older who have lived here five years
  • Those with a permanent disability
  • Those with permanent kidney failure
  • Those with ALS (Lou Gehrig's disease)

If you meet even one of these criteria, you should be enrolled in Medicare too. Though the program doesn't pay for everything, it can offer you some valuable benefits. That's because Medicare has four different parts, each of which covers something different.

  • Part A pays for hospital stays.
  • Part B covers doctor visits and outpatient care.
  • Part C (Medicare Advantage) provides additional insurance.
  • Part D covers prescription costs.

Medicare is user-friendly, too. For instance:

  • You don't have to be retired to use it.
  • You can also use your employee benefits.
  • You can use private insurance as well.
  • There are no income limits.
  • Your health status doesn't disqualify you.
  • Coverage is permanent, unless you dis-enroll.

Those are some generous terms, but there are some downsides too.

  • There are premiums, copayments and deductibles.
  • There are penalties for late enrollment.
  • Many doctors no longer accept Medicare.
  • There is no coverage for long-term care.

All the same, you should still enroll. Why? Because for most people, it's the best deal around. If you're still working and have employer benefits, you can put off Parts B through D until you retire. But you'll still need to sign up for Part A, so you don't forfeit your coverage later on.

And signing up for Parts A and B is generally very easy. You have an initial enrollment period, during which a Medicare card automatically arrives in the mail. This usually happens three months before you turn 65. All you do is sign the card and put it in your wallet. Once you've done that, you're officially enrolled.

Your card will also come with a form for accepting or declining Part B. Be sure to fill it in and send it back. You should only decline Part B if you still have employer coverage. Otherwise, you'll be penalized when you try to enroll later on.

To enroll in Parts C and D, though, you'll need to go through an insurance company. But if you go during initial enrollment, you get the upper hand.

  • You can't be turned down for age or health reasons.
  • You don't have to take a physical.
  • Pre-existing conditions usually can't be excluded.
  • Your policy can't be canceled except for nonpayment.

Prices will vary from company to company. Find an insurer with low enough rates, though, and your coverage could be pretty cheap. If you need help finding insurers in your area, contact Medicare directly or visit your local library. You can also get information from Social Security or your state's Health Insurance Assistance Program.

But whatever you do, don't let the initial enrollment period get away from you. And if you don't receive your card in the mail, contact Social Security right away. There could be a mistake, or they may not have your address. And make sure you sign up early, in case any issues arise. After that, you're set. Go enjoy your retirement.

By Gregg Newby, Staff Writer
Created on 08/17/2009
Updated on 08/17/2009
Sources:
  • Kaiser Family Foundation. Medicare: A primer. 2009.
  • Matthews J, Berman DM. Social Security, Medicare & Government Pensions: Get the Most out of Your Retirement and Medical Benefits. Berkeley, CA: NOLO; 2008.
  • Centers for Medicare and Medicaid Services. Medicare & you. 2009.
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