Your Guide to Medicare Coverage

Medicare is the federal government’s health insurance program for people aged 65 or older; younger people with disabilities; people with Lou Gehrig’s disease, also called amyotrophic lateral sclerosis, or ALS, and people with end-stage renal disease (permanent kidney failure requiring dialysis or transplant). To maximize the value of the program, make sure to sign up at the correct time and take advantage of the free and low-cost services Medicare provides.

Here’s your roadmap for getting the most from your Medicare benefits.

What Is Medicare?

Medicare helps cover the costs of health emergencies and chronic conditions, but it can also be used to help maintain good health. Medicare beneficiaries have to pay premiums and a variety of other out-of-pocket costs and must make decisions about their coverage options.

[Read: Best Insurance Companies for Medicare Advantage.]

What Does Medicare Part A Cover?

Medicare Part A covers hospital care, rehabilitative care and hospice. The rehabilitative care can be provided at a skilled nursing facility, a rehabilitative hospital or facility, or at your home. if it follows a hospital stay of at least three days. Most beneficiaries don’t pay a premium for Medicare Part A, but there is a $1,556 deductible in 2022 and additional charges for long hospital or rehabilitation stays.

What Does Medicare Part B Cover?

Medicare Part B is medical insurance that pays for doctor’s visits, outpatient care, durable medical equipment (such as walkers), mental health care and drugs you may receive at your doctor’s office. Part B also provides a variety of free preventive services, such as an annual wellness doctor’s office visit, flu shot and screenings for certain conditions. Beneficiaries in original Medicare can go to any doctor, specialist or other health care provider that accepts Medicare and is taking on new patients.

Most beneficiaries pay the standard Medicare Part B premium of $170.10 per month in 2022, but higher-income beneficiaries pay more. If your income is more than $91,000, then you pay a higher income-related premium, which increases with your income, says Tricia Neuman, ScD senior vice president and executive director of the Program on Medicare Policy at the Kaiser Family Foundation. Medicare Part B has a $233 deductible in 2022, after which beneficiaries are generally responsible for 20% of the cost of most doctor’s services.

What Does Medicare Part C Cover?

Medicare Part C or Medicare Advantage plans are an alternative to original Medicare in which private insurance companies pay for Medicare-approved and sometimes other services, but with different prices and restrictions than original Medicare. You may be required to use doctors in the plan’s network and get a referral to see a specialist in order to have the costs of your care covered by the plan. However, these plans often include benefits not covered by original Medicare, including dental, hearing and vision benefits.

What Does Medicare Part D Cover?

Medicare Part D plans are private health insurance policies that provide prescription drug coverage, following rules set by Medicare. The premium for Medicare Part D prescription drug coverage varies depending on the plan you select. Plans can charge deductibles of up to $480 in 2022.

[Read: Medicare and Medigap: What’s the Difference?]

What Does Medigap Cover?

Medicare beneficiaries can purchase Medicare supplement insurance policies called Medigap to help pay for original Medicare’s out-of-pocket costs. Some of these plans also cover additional services that Medicare doesn’t cover. Medicare supplement policies help to make out-of-pocket expenses more predictable and typically cover the copays, coinsurance and deductibles of original Medicare in exchange for a monthly payment.

It’s important to enroll in a Medigap plan during the six-month period that begins when you’re 65 or older and enrolling in Part B, because after this enrollment period ends, you may not be able to buy a Medigap policy or could be charged significantly more, depending on the rules in your state.

What Isn’t Covered by Original Medicare?

Original Medicare doesn’t cover all of the health care services older people are likely to need in retirement. For example, original Medicare generally won’t pay for glasses, contact lenses or routine eye examinations. Dental care and hearing aids are also common services that aren’t covered. Perhaps most significantly, while short-term nursing home stays might be covered under specific circumstances, original Medicare does not pay for long-term care.

When Should You Enroll in Original Medicare?

Retirees can first enroll in original Medicare during a seven-month window that begins three months before the month they turn 65. Sign up at the beginning of this period if you want coverage to begin the month you reach age 65. It’s recommended to also sign up for Part D from the start, which helps with prescription drug coverage, even if you don’t take prescription drugs. If you sign up for Part D later, you’ll be required to pay a late enrollment penalty for each year you are enrolled.

“If you miss the initial enrollment period you can sign up between Jan. 1 and March 31 for coverage that will begin July 1, but you will be charged late enrollment penalties for as long as you have Medicare. These penalties from Medicare can be long-term,” says Anna Maria Chávez, Esq., former executive vice president and chief growth officer at the National Council on Aging and current Board Chair for The SCAN Foundation. “You don’t want to have to worry about higher costs just because you didn’t act when you became eligible at 65.”

If you delay original Medicare enrollment because you or your spouse is still working at a job with group health insurance, sign up within eight months of leaving the employer or health plan to avoid the penalty.

[READ: Find the Best Medicare Plan for You]

How Do You Sign Up for Original Medicare?

Social Security beneficiaries are often automatically enrolled in Medicare Parts A and B, with coverage starting the month they turn 65. If your birthday falls on the first of the month, coverage will start at the beginning of the prior month.

Medicare cards are mailed out to most Social Security beneficiaries three months before their 65th birthday, and Medicare Part B premiums are withheld from Social Security payments. However, you will need to actively sign up for Part D prescription drug coverage, a Medicare supplement policy or a Medicare Advantage plan.

Workers who haven’t signed up for Social Security will need to enroll in Original Medicare and pay the premiums out of pocket to receive coverage. You can sign up online at socialsecurity.gov, by phone at 1-800-772-1213, or at your local Social Security office.

Once enrolled, you can review your coverage and make changes each year. It’s important to take time each year to review the plan’s formulary and drug costs, as well as the provider network, to ensure that the plan still works for you.

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Your Guide to Medicare Coverage originally appeared on usnews.com

Update 06/06/22: This story was previously published at an earlier date and has been updated with new information.

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