Medicare is a government-run health insurance program available to those sixty-five years and older, some individuals with disabilities, as well as those with certain chronic illnesses. Access to this program is not dependent upon income, only age and disability designations. There are two types of Medicare benefits. The original program is offered through the federal government. The second type is a Medicare Advantage Plan, which is private insurance offered through companies that contract with Medicare.
There are four different optional parts to Medicare. Medicare Part A is hospital coverage, which covers some expenses related to inpatient hospital stays, skilled nursing facilities, hospice, and sometimes home health care. Part B is medical insurance, which covers some doctors’ visits, outpatient care, and preventative services. Part C offers the Medicare Advantage Plan, which is privately offered Medicare insurance. Finally, Part D offers prescription drug coverage plans. Those who are receiving social security benefits may be automatically enrolled in Part A and B. Those who are still employed may choose to elect part A but hold off on Part B because they are still receiving health insurance from their employer. Regardless of the Medicare options that are chosen, it is unlikely to cover all healthcare expenses, which is why there are supplemental programs often called Medigap.
It’s important that those approaching the age of Medicare do their research to understand all their options, upcoming enrollment dates, and whether supplemental insurance will be needed. If you are 65 years of age, or turning 65 in the next 3 months, and not already receiving Social Security benefits, you need to sign up for Medicare. Despite a common misconception, you will not receive Medicare automatically.
In addition, be mindful of penalties that may occur if you do not enroll at 65 during that initial enrollment window. You will face a 10% increase in your Part B premiums for every year that you were eligible for coverage, but didn’t enroll. Unless of course, you were still employed and covered by your employer.
Like all government programs, Medicare is dependent on funding. This program is funded by social security, Medicare taxes, program premiums, and the federal budget. Changes to the Medicare program are not unusual as it is highly sensitive to the changes in politics at the federal level. Much of the contention surrounding the program relates to either increasing funding or decreasing funding. Advocates for expanding services the program offers argue that many changes should be made to improve healthcare access. Advocates argue that Medicare needs to provide dental, vision, and hearing coverage, which it doesn’t, as these are issues that impact seniors especially. A major complaint with the current program is that prescription drugs are often unaffordable even with Medicare coverage. Another issue is that it’s difficult for low-income individuals to access assistance programs to help make Medicare more affordable.
Currently, there is a two-year waiting period for those who have qualified for social security disability to receive Medicare coverage. Advocates argue that the waiting period is arbitrary and impacts those with disabilities unfairly. These issues will continue to be at the forefront of the ongoing healthcare debate in congress.
Without a doubt, healthcare coverage can be incredibly complex and overwhelming. Our team is here to assist you with any questions regarding your overall financial health.
Associates of Bluestone Wealth Partners are registered representatives of Lincoln Financial Advisors. Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Bluestone Wealth Partners is not an affiliate of Lincoln Financial Advisors.