Medicare Part A is the hospital benefit; typically you will have paid into the system through work so will not have a premium for Part A. However, if you do not have the work credits, the full monthly premium for 2013 is $441.
Medicare Part B is for outpatient services (i.e., physicians, outpatient surgery or therapy, lab, x-rays, etc.). There is a premium; it is based on the adjusted gross income filed with your tax return. The minimum premium for Part B for 2013 for an individual claiming an income of less than or equal to $85K or a joint tax return with an income of less than or equal to $170K is $104.90. You will be required to pay a higher premium as well as a surcharge for your drug coverage if you had a higher adjusted gross income.
If you are currently working and your employer (or spouse’s employer) is over 20 employees, you may elect to activate your Part A (hospital benefit) only, delaying your Part B (outpatient services) with no penalty.
Part C refers to a Medicare Advantage/HMO plan.
Part D is drug coverage. Whether you are on Part A and/or Part B, Medicare wants you to have creditable drug coverage. If you decide to remain on your employer plan, make sure you confirm with your employer that the drug coverage provided under the employer plan is creditable. If not, you should enroll on a stand-alone drug plan so that when you do go fully onto Medicare, you will not receive a penalty for each month you were not on creditable coverage (note: the penalty is 1% per month based on the national average for drug plan premiums). If you do receive a penalty, you will carry that penalty in perpetuity.
If you decide to go fully onto Medicare A and B, then you can choose to (1) select a Medicare Supplement/medigap policy to cover what Medicare doesn’t fully cover medically as well as a Part D drug plan; /or/ (2) select a Medicare Advantage HMO plan because all of your doctors are in the same medical group and take a Medicare Advantage Plan (the latter will typically also include your prescription drug coverage). If, however, you are offered an employer retiree plan, you will want to evaluate this option before making any decisions. If you decide to not accept the employer retiree plan, you will not have the option to select it at a later date.
Making a selection is a personalized choice. Resource a trusted agent/broker to help educate you on the choices available to you and which ones will fit your medical, prescription drug and financial needs.
Be aware that when you turn 65 insurance companies and agents purchase lists so that they can solicit you. If you don’t send in a reply card or call them, they cannot, per Medicare, call you or show up at your door unsolicited. And don’t be fooled by an individual who says Medicare told them you were turning 65 – – Medicare does not personally contact agents to inform them of your Medicare eligibility.