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Medicare 101

Think of it as a birthday with benefits. You turn 65 and you are finally eligible for Medicare. Signing up can be a breeze – under the right circumstances. Or it can be a confusing hassle. Lori McGinnis, a counselor with SHIP (State Health Insurance Programs), a federally funded program that offers FREE assistance to anyone who qualifies for Medicare, says many people need help signing up. So we asked her a few basic questions. The answers may help you get started.

What is the most important thing you need to know when applying for Medicare?

Deadlines. There are strict deadlines for applying for basic Medicare. You MUST apply within three months before or after your 65th birthday to avoid paying a monthly penalty for not doing so. If you’re already collecting Social Security, you will get a Medicare card mailed to you. If you’re not, then you need to be proactive and contact Social Security via phone, online or in person to apply for it. It’s best to start before turning 65. If you don’t apply for Medicare within your six-month window, you can apply between Jan. 1 and March 31 of each year but coverage won’t start till July 1 of that year.

If you’ve gone 12 full months without Medicare since you became eligible, you may have to pay a penalty – usually 10 percent for every 12 months you weren’t enrolled but eligible. The penalty continues as long as you have Medicare. It’s 10 percent of the Part B premium – this year about $10.50 average per month. That can add up. So it’s worth meeting the original deadline. This might be different for those leaving an existing group employer insurance – ask about that.

How do you get started?

You can call Social Security or go to an office or do it online. For the most part it’s pretty smooth, if you are prepared and start on time. But every now and then there’s a hiccup, and when you look at the millions of people they are dealing with, it’s not surprising that this happens. Here’s the Website: www.ssa.gov.

What are some of the most common problems people have?

Not applying during the open window. Another common issue is for people who are leaving employer group insurance and then applying for Medicare. Then they need to have proof of credible coverage. Hold on to that document when you get it from your employer. You’ll need it.

Where does the most confusion come in?

The difficulty comes when people start looking at their options. There are Medicare Advantage plans, Medigap plans, and part D plans … and you have to decide which of those to choose. If you’ve had employer group coverage in the past, you may have additional options. Ask yourself: what can you afford, what does your doctor take, or do you travel a lot? Simply put, original Medicare – Part A and Part B –has significant out-of-pocket costs (more than $1,000 for every hospital stay, for example).

Medicare Advantage is where you have lower monthly premiums and higher out-of-pocket costs (co–pays and co-insurances).

Medigap is a supplemental insurance you can purchase separately to cover where Medicare leaves off. It can potentially eliminate out-of-pocket expenses, except for premiums. It’s also called a supplement policy.

Is there someone to help you if you can’t seem to do it alone?

Yes, SHIP (state health insurance programs) funds programs throughout the U.S. and its territories. Every area has access to the free SHIP program – people are well trained and unbiased. We don’t sell anybody anything. Our goal is to educate people so they can make the best decision.

A lot of mailings you get before your 65th birthday about Medicare will have the SHIP phone number for your area on it– or get it by calling 1-800-Medicare. You can also get general information about your state SHIP office if you visit www.shiptalk.org.