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Read This Before You Apply for Medicare

Roughly 100,000 people enroll in Medicare each month, and unless you're already collecting Medicare, you'll be among the 100,000 one of these months. Don't put off thinking about and preparing to enroll in Medicare, though, lest you make some costly mistakes. Here are two key things to know before you apply.


Image source: Getty Images.

Image source: Getty Images.

Heed the deadline -- or it can cost you

The first thing to know is that there can be a big price to pay if you are late enrolling. You're eligible for Medicare at age 65, and can sign up anytime within the three months leading up to your 65th birthday, during the month of your birthday, or within the three months that follow. If you miss that seven-month-long "Initial Enrollment Period," your part B premiums (which cover medical services, but not hospital services) can rise by 10% for each year that you were eligible for Medicare but didn't enroll.

You may avoid the penalty, though, if you're among the many Americans who are already receiving Social Security benefits by the time they reach age 65. Those folks are typically enrolled in Medicare automatically. You might also avoid the penalty and be able to skip the deadline if you're still working, with employer-provided healthcare coverage, at age 65, or if you're serving as a volunteer abroad.

You can enroll via the Medicare website at www.medicare.gov, and it may take you just 10 minutes or less. You can also enroll by calling 800-772-1213 or visiting a Social Security office about three months before your 65th birthday.

Shop around for the best plan for you. Image source: Getty Images.

Find the right fit

There's a little more to getting into Medicare than just enrolling. You also need to decide just what plan you want. There's "original" Medicare, featuring parts A and B (typically augmented with Part D's prescription drug coverage), and there are also Medicare Advantage plans, which can be selected instead of original Medicare. Medicare Advantage plans are offered by private insurers, but the government still regulates them -- and requires them to offer at least as much coverage as Part A and Part B offer. It's common for Medicare Advantage plans to offer more coverage than original Medicare does, often by including coverage for prescription drugs and frequently including vision, hearing, and/or dental coverage, too.

There are pros and cons to each option, so you'll need to learn more before deciding what's best for you. For example, while original Medicare lets you see any healthcare provider in the U.S. that accepts Medicare, Medicare Advantage plans typically limit you to a network of providers -- though the networks are sometimes quite large. While original Medicare doesn't cover treatment abroad (unless you buy Medigap supplemental coverage), some Medicare Advantage plans do. Original Medicare will often have you footing 20% of many bills with no spending limit, so if you use a lot of services, you can end up paying a lot. On the other hand, Medicare Advantage plans might charge you a low copay per doctor visit or service and they also feature out-of-pocket limits, beyond which the plan will pick up all your healthcare costs for the year. For 2016, the average out-of-pocket cap is $5,223, but many plans feature caps below $3,000. The maximum allowed limit in 2016 is $6,700.

Image source: Getty Images.

As you deliberate, think about the services and products you need and use. If you take several prescription drugs, see which plans cover those and how much they'll cost you. If you expect to need vision, hearing, and/or dental care, see which plan will best serve those needs. Think, too, about the doctors you see or might want to see and whether they're covered in any plan you're considering.

A visit to the Medicare.gov website can help by showing your options in detail. It will also show you star ratings for Medicare Advantage plans and Part D (prescription drug coverage) plans in your area. Medicare Advantage plans earn their stars by being evaluated on measures such as how well they're keeping their members healthy (via screenings, checkups, and more), how well they're managing members' chronic conditions, and how good their customer service is. The top score is five stars and you should favor four- or five-star plans.

Finally, don't worry about making a lasting mistake. You can change your mind and switch between plans once a year, during the enrollment period.

Medicare is a wonderful help for those in retirement. Learn more about it so that you can make the most of it.

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