Building Blocks of Medicare

Medicare can feel extremely confusing. Between the different plan and parts, it can feel as though there is no right decision. This is partly due to the fact that you’re planning for unknown health developments. With this complexity in mind, it’s important to know all your options and paths available for healthcare planning.

This article is the first in a three-part series on Medicare. The series will cover an explanation of Medicare Parts A – D, enrollment, coverage, Original Medicare vs Medicare Advantage and other important considerations for individuals examining Medicare.

This article focuses on the enrollment in Parts A & B of Medicare.

Parts A & B Enrollment:

Medicare Part A covers the cost of medical expenses incurred in a medical facility (e.g. hospital, skilled nursing facilities). Medicare Part B covers out-patient care and home healthcare expenses Many people consider Medicare to be mandatory, but the requirement for Medicare Parts A & B depends on the applicant’s type and size of a qualifying company health plan.

At age 65, enrollment in Medicare is dependent on whether you are enrolled in an employer sponsored plan and whether you are receiving Social Security. 

For individuals turning 65 without an employer group health plan, the first consideration is whether you are currently receiving or delaying Social Security. As noted below, although Parts A and B are required, enrollment is not automatic for individuals delaying Social Security.

For individuals turning 65 with an employer group health plan of less than 20 employees, again, the first factor is whether you are currently receiving or delaying Social Security. As noted below, although Parts A and B are required, enrollment is not automatic for individuals delaying Social Security.

For individuals covered by an employer sponsored health plan with more than 20 employees, the first factor is whether you are receiving Social Security. For individuals receiving Social Security, you will be automatically enrolled into Part A but part B. Depending on your employer’s plan, you may be eligible for declining part B until you leave your company.

For individuals delaying Social Security, you may be eligible to delay Parts A & B enrollment depending on the benefits of your qualifying health plan. Whether you are eligible to delay enrollment depends on the robustness of your company’s health plan.

Regardless of your situation outlined below, consider the following tips:

  • Begin exploring Medicare options in the year leading up to your 65th birthday. The Medicare system can feel confusing at first, so allowing yourself plenty of time for conservations and learning is critical.
  • If you expect to enroll into Parts A and B, begin paperwork 3 months before your 65th birthday. The Medicare offices can have significant delays that could create coverage gaps in your medical services.
  • If you are eligible to decline Part A and/or B, consider delivering the form to your local Social Security Office. If there is not a local Social Security Office, send the form with mail tracking to have evidence that it was received by the processing facility.
  • Have an honest evaluation of your medical future. Part of the decision between Original Medicare and Medicare Advantage is how often and what types of doctors you expect to visit. Having the greater cost certainty of Original Medicare can be beneficial for individuals facing great health uncertainty.

Parts A & B are the building blocks of Medicare. How they affect your medical coverage will depend upon your existing coverage and decision to delay Social Security. In order to effectively utilize Medicare, you must spend the time to research and implement Parts A & B. Part of this research is determining what you want from your health coverage in retirement—costs, doctor coverage, etc. None of these decisions are instant and help emphasize why a successful decision is the result of time and thoroughness in planning.

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