10 tips for a 65 year old signing up for Medicare

Are you turning 65 soon or wondering how to figure out the maze of Medicare?  Congratulations!  Now don’t throw away all those mailings you get from insurance companies everyday (recycle them) and don’t disconnect your phone to stop the unsolicited calls. Click here to register for the Do Not Call List.

Here are 10 tips for cutting through the clutter and making this process less painful than a trip to the dentist:

1. Don’t be afraid to ask!  
Chances are you know someone who is already Medicare eligible.  Buy them a cup of coffee and pick their brain.  What resources did they use?  Are they happy with their current coverage?  What problems have they had?  Are they satisfied with their current insurance agent or broker?  How have their rates changed in the time that they are Medicare eligible?

2.  Choose an independent agency to help
With so many variables, it can be scary to go at this alone.  An expert in this field can alleviate a lot of stress and anxiety in having the correct coverage.  All Medicare plans are regulated at a state and federal level.  An agency should NOT CHARGE YOU A DIME to assist in finding the correct Advantage, Part D, or Supplemental plan.  You should ask your friends and family for references and check out the agency’s office and reputation online.  How long have they been in business?  Do they offer Medicare Advantage and Part D options?  Are they licensed with multiple carriers?  Agents must go through rigorous annual training to offer Medicare Advantage and Part D products.  A comfortable relationship with an independent agency can make this process simple and have you feeling confident that you made the correct decisions.    

3.  Decide between Medicare Advantage and Original Medicare
As you learn about your choices, you will find that all your options fall into 2 different categories:  Original Medicare or Medicare Advantage.  By starting here, you can narrow down your options to a manageable number and go from there.  

4.  If you choose a Medicare Supplement, ask about rate adjustments and financial stability of the company.
Because Medicare Supplements are priced based off of the age you are when you buy the plan, you get a benefit to buying at 65 and being able to stay with that carrier.  As you switch, your price is based off of your new age.  Believe it or not, insurance companies know you are turning 65 (shocking I know) and have all kinds of sneaky ways to give you a low price initially.  Rate adjustments in the Medicare Supplement industry vary wildly, from 3-5% per year up to 40% depending on the insurer.  You should ask about and probe into previous rate adjustments as well as looking at financial ratings from companies like A.M. Best.  

5.  Review your Drug (Part D) coverage
The easiest way to pick your drug coverage is to use the Medicare Drug Plan Finder.  This online tool makes choosing the best drug plan simple.  It takes your location, the drugs you take, what pharmacy you use, and ranks all available plans from lowest to highest cost.  Choose your plan from the top 5 and you should be set.  

6.  Talk with your providers and doctors before choosing a plan
This is especially true if you are choosing a Medicare Advantage plan.  If you are going with the supplemental route, you can choose any doctor or hospital in the country that takes Medicare.  Your doctors probably accept some Medicare Advantage plans.  Ask them who they accept and what issues if any they have experienced with different companies.  You should also make sure your preferred hospital is in network as well.  By using your information to narrow down your choice, you will have a better health insurance experience.  

7.  Ask your doctor for generic drugs
Coming from group insurance, you probably haven’t really thought too much about the actual cost of the drugs prescribed by your doctor.  When you are on Medicare, there can be a drastic difference between your cost for generic drugs vs a brand name   For example generic Lipitor, Atorvastatin, a common high cholesterol drug has a $0 co pay at the pharmacy with most Part D plans.  Crestor, a competing brand name high cholesterol drug, will set you back around $50/month!  When you are on group coverage, these costs usually don’t vary as much.   

8.  Even if you are still working full time and have health insurance, Medicare may be a better deal.  
Think of what your deductible is with your employer coverage.  Now think of your co pay to see a doctor.  Now think of your monthly contribution.  For many people, this is a lot more expensive than what it was 3 years ago.  As healthcare costs have increased, many employers have passed larger shares of this expense to the employee.  If you are 65 and still working, you have the right to enroll into Medicare A and B at this time and take a private policy, even if you plan on working for the foreseeable future.  A good estimate of what your own costs would be with Medicare is ($134/month -Part B, $175/month -Plan F Supplement, $30/month Part D drug coverage = $339/month.  With this route, you have $0 deductible, no co pay to see doctors, and small co pays on drugs!).  My rule of thumb is if your employer plan costs you $200/month or more, you should take a hard look at Medicare.    

9.  Give yourself plenty of time
Medicare enrollment can be a lengthy process and often takes longer than you anticipate.  A good rule of thumb is to start the application process for supplemental or Medicare Advantage coverage 6-8 weeks before your Medicare begins.  Speaking of when Medicare begins, it starts the 1st day of the month you turn 65.  So if your birthday is 6/27 (like mine!) then your Medicare begins 6/1.  If you’re a lucky person and your birthday is on the 1st of a month (6/1) then your Medicare begins the first day of the previous month (5/1).

10.  Ask for Help!
If the costs for your Medicare insurance seem like they are not affordable, there may be assistance.  If your annual gross income is under $22,000 (single) or $30,000 (married) you probably qualify for a 50% savings on your drugs co pays with Missouri Rx.  If your income is lower, you may qualify for Extra Help, which is premium and drug assistance offered by the federal government.  If your monthly income, including Social Security, is under $1,200/month you may qualify for reimbursement of the Part B premium (which is $104.90 in 2013).  Check the exact figures here.  The point is, there are programs available, at no cost, which can drastically reduce the cost of Medicare.  If you don’t qualify, you probably know someone who does as around 20% of the senior population falls below these income levels.