Turning 65 or planning for retirement soon?
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There’s a monthly cost of coverage that you either pay directly or have deducted from your Social Security benefits. ALEX can help you understand what those costs will look like.

What people call “Original Medicare” provides valuable coverage for hospital stays (called “Part A”) and care provided by doctors (that’s “Part B”). But Original Medicare isn’t like the plans you’re probably used to from your employer or the marketplace. Those plans put a limit on how much you might have to pay in a given year; Original Medicare doesn’t do that. You pay a portion of the cost (generally 20%) for any care you need with no limit on your total share. If you have a health problem that requires a lot of care, it could still put your savings and entire financial situation at risk.

Also, most medical plans offer coverage for prescription drugs; Original Medicare doesn’t do that, either—without additional coverage, your drug costs could really add up.

• Good news: Part A (hospital care) is free if you or your spouse paid payroll taxes for at least 10 years.
  • Bad news: if not, you can still get Part A coverage, but you’ll have to pay a monthly premium and the amount depends on how long you or spouse paid payroll taxes.
• Original Medicare, Parts A and B, each have their own deductible. (Even if you get Part A for free.)
  • You pay the Part A deductible each time you stay in the hospital in a year.
  • You pay the Part B deductible just once each year and then Original Medicare starts to pay toward your doctor visits.

One way that Original Medicare offers more flexibility than most other medical coverage is that it’s accepted by virtually every doctor and hospital in the country. While many medical plans limit coverage to a specific network or group of providers, the reliability of Parts A and B (the fees-for-service that Original Medicare pays) and the number of patients available make accepting Original Medicare a no-brainer decision, even for brain surgeons—with Original Medicare, almost every doctor is in.

Unlike the health insurance you’re probably used to from your employer, Original Medicare doesn’t cover routine dental, vision, or hearing care. This includes eye exams for prescribing glasses, hearing aids and exams for fitting them, and dentures. Also not covered? Long-term care.

You can see how the 20% you’re responsible for (on top of the deductibles) can add up. This applies to things like:

• Durable medical equipment (think walkers, crutches, CPAP machines, blood sugar meters and test strips, etc.)
• Inpatient hospital services from your doctors
• Outpatient mental health visits to your doctor
• Doctor visits during partial hospitalization for mental health care
• Doctor and other health care providers' services for outpatient hospital care

Keep reading to learn how to address those issues and make Medicare work for you. Then talk to ALEX to get personalized guidance.

Unlike an employer-sponsored or marketplace health plan, Original Medicare only covers eligible individuals. You can’t add a spouse or children to your coverage. It’s something to take into account as you consider your options.

We’ve covered how Original Medicare, Parts A and B, doesn’t cover everything and doesn’t have a cap on your out-of-pocket spending. 

That said, there are ways to get more coverage. These options are offered by private insurance companies, and each one works a little differently. The right fit for you depends on your needs and preferences.

Whichever option you choose, you’re not locked in forever—you can switch plans or choose different coverage every year. In fact, because health needs change over time, even if you’re satisfied with your current coverage, it’s a good idea to revisit your options each year to make sure that you’ve got the best possible fit. Setting up a secure account with ALEX saves your information to make annual reviews a breeze.

Medicare Supplement plans, also called Medigap (because it fills the gaps in coverage from Original Medicare), provide additional coverage that make your costs for care more predictable. There are multiple Medicare Supplement plan options available with different levels of coverage.

Some (but not all) even add a limit on your total spending for the year, and once you reach that limit, the plan covers 100% of costs until the end of the year. And because Medicare Supplement plans are designed to work with Original Medicare, there’s no provider network and you’ll likely be able to see whichever doctors you’d like.

Medicare Advantage plans, also called Part C (because it was the next official addition to Medicare after Parts A & B), are much like private and employer plans in how they help cover costs. They have a premium, and, depending on the plan, different copays and coinsurance for visits and services.

Medicare Advantage plans often have a shared deductible for medical and hospital care—not two separate ones like Parts A and B.

Medicare Advantage plans typically have networks of providers, so your coverage can depend on who you see. And sometimes, specialist visits may require referrals, while certain services may require prior authorization.

In 2003 Congress created Medicare Part D, which offers prescription drug coverage that can be added to Original Medicare and Medicare Supplement plans or included as part of Medicare Advantage plans.

If after all of your research you decide to stick with Original Medicare or to add a Medicare Supplement plan to it, but you take prescription drugs, you’ll have to add a separate Part D plan as well. And yes, the Part D plan will have its own premium and deductible in addition to what you pay for your Medicare Supplement plan.

Medicare Advantage plans often have Part D coverage built in, so you don’t have to add separate prescription drug coverage. But for the few Medicare Advantage plans that don’t, you guessed it—you’ll have to add a separate Part D plan.

To make the Original Medicare system work, everyone who should be on Original Medicare is expected to enroll when they need to. For most people, the first opportunity to enroll in Original Medicare is a seven-month window—the three months before you turn 65, the month you turn 65, and the three months after you turn 65—called the Initial Enrollment Period (IEP).

It’s important to know what you want to do and take action: missing the enrollment window without knowing what you’re doing could lead to a gap in coverage or even financial penalties that are paid for the rest of your life! ALEX can help you make sure that doesn’t happen.

(Some people are allowed to enroll in Original Medicare earlier: those with a disability, end-stage renal failure, or ALS.)

Listen, 65 today isn’t like 65 was even 20 years ago—we’re living better, working longer, staying active, and doing things we love long past the time our parents and grandparents did. While some people are counting down the days until they’re eligible to enroll and jump in as soon as they can, others don’t enroll until they’re good and ready.

If you continue to work or have a spouse who does, and that job provides medical insurance that qualifies (called “creditable coverage”), you can put off enrolling in Original Medicare until that changes. When it does, you’ll have an eight-month window from the time the job ends to enroll in Original Medicare (COBRA coverage after the job doesn’t extend the window). But just like the Initial Enrollment Period, if you miss this one, you may have to go without coverage for a while or pay those late enrollment penalties. ALEX knows the questions to ask to give you personalized enrollment guidance to make sure that doesn’t happen.

Millions of Americans use Health Savings Accounts (HSAs) to avoid paying some taxes on money saved to be used for healthcare expenses or in retirement. However, one of the big rules about HSAs is that you can’t make tax-free contributions when you have certain kinds of medical insurance. If you’re thinking to yourself that Original Medicare is probably one of those certain kinds of medical insurance, you’d be right. Enrolling in Original Medicare, even just in Part A, and even if it happens automatically, makes you ineligible to contribute. If you don’t stop your contributions six months before you enroll in Original Medicare, you may have to pay a tax penalty on those contributions.