‘ClubMedicare’

OnJuly 30, 1965, PresidentLyndonB.

Johnson signed theMedicare bill into law.

Theprogramwas intended to provide medical care and health insurance tomost Americans aged 65 or older and has evolved in the near six decades since its inception.

Thefirstmajor addition occurred in 1972, whichwas an expansion to Americans under 65 with certain disabilities and anyone with permanent kidney disease requiring dialysis or transplant and those withALS(Lou Gehrig’s disease).

Thenext major change to theMedicare programoccurred in December 2003, whenCongress added outpatient prescription drug benefits. Here are themost frequently asked questions that I receive about joining "ClubMedicare."

Q: WhatdoalloftheMedicareletters represent?

A: Thealphabet soup of coverage is comprised of four parts:

MedicarePartA: Insurance for hospitalization, homeor skilled nursing and hospice

MedicarePartB: Medical insurance

MedicarePartC(MedicareAdvantage Plans): Private insurance option for covering hospital and medical costs

MedicarePartD: Prescription medications

Q: What’sthedifferencebetweenOriginal MedicareandMedicareAdvantage?

A: OriginalMedicare is comprised ofPartA andPartB, and it "covers most, but not all of the costs for approved health care services and supplies." That said, OriginalMedicare does not cover some key benefits like eye exams, most dental care and routine exams. Additionally, there’s no limit on what you’ll pay out of pocket in a year. That’swhy many people opt to buy aMedicare Supplement Insurance(Medigap) policy to help lower their share of costs for services you get. With the original, you purchaseMedicare drug coverage (PartD) separately.

MedicareAdvantage is a private option, which bundlesPartA, PartBand usually PartDcoverage into one plan. Most of these plans offer someextra benefits that Original Medicare doesn’t cover— like vision, hearing and dental services. Each plan can have different rules for howyou get services, like needing referrals to see a specialist. Costs for monthly premiums and services vary depending on which plan you join.

Q: HowdoIenroll inMedicare?

A: If you are 65 and not receiving Social Security benefits yet, youmust apply online forMedicare. If you have taken Social Security before turning 65 (something that I do not usually recommend, due to the permanent reduction in benefits), you will be enrolled automatically inMedicarePartA andPartB. Importantly, Medicare is for you only— it does not include coverage for your spouse or your family.

Q: WhendoIhavetoapply?

A: Mark Miller, author, journalist and founder of the excellentRetirement Revisedwebsite, notes: "Medicare rules require that you sign up during a sevenmonthinitial enrollment period that includes the three months before, the monthof, and the three months following your 65th birthday. Not enrolling during that windowtriggers substantial late-enrollment penalties levied in the form of higher premiumsforPartBandPartDthat continue for life."

Q: CanIpaysomeonetodothis forme?

A: Yes, but likemany parts of the financial servicesworld, you need to conduct some research, ask a lot of questions and be careful. Start by asking yourCFPorCPA for a referral. You should also investigate theNational Council onAging’s (NCOA) Medicare Standards ofExcellence site. To be eligible to be listed on the site, Medicare agents and brokersmust go through a rigorous review and training process, which meetsNCOA’s standards. Thegoal is that consumers can "receive unbiased education, practical decision support, and trusted enrollment optionswhenyou connect with aMedicare partner."

Jill Schlesinger

Jill onMoney