Individuals who become eligible for Social Security must also decide whether or not to enroll in Medicare. For most individuals, there is no cost for Medicare Part A. Medicare Part B is optional, but its cost may include a penalty for late enrollment. To avoid the cost of late enrollment, individuals eligible for Social Security may need to consider enrolling in Medicare Part B when it first becomes available.
Medicare Part A and Medicare Part B are the original Medicare components. Medicare Part A provides coverage for hospital stays and hospice care. Medicare Part B covers expenses for doctor visits and outpatient medical services. The choice of when to enroll in Medicare Part B depends largely on whether or not you have other health coverage when you first become eligible for Social Security.
Eligibility for Free Medicare Part A
Medicare Part A is essentially free for individuals whose employment history makes them eligible for Social Security. As a result, most people who are eligible for Social Security enroll in Medicare Part A. Unless you have other insurance coverage for doctor visits, the potential penalty provides incentive to enroll in Medicare Part B at the same time you enroll in Medicare Part A.
Late Enrollment Penalty for Medicare Part B
Although there are exceptions, the cost of Medicare Part B rises 10 percent for each 12-month period that enrollment is delayed beyond the time of initial eligibility. The late enrollment penalty is permanent and remains in effect as long as you maintain Medicare Part B. The penalty is generally not applicable if you have other continuous health coverage up until the time you enroll in Medicare Part B.
Part B Co-Payments
Medicare Part B does not cover the full cost of medical care. Your co-payment is 20 percent of the cost. The co-payment requirement is what provides the incentive for individuals to obtain a Medicare supplement policy. Many Medicare enrollees obtain a supplement policy to coincide with their initial enrollment in Medicare.
Part B Annual Deductible
In addition to the required co-payments, there is an annual Medicare Part B deductible amount. Medicare Part B starts to cover outpatient medical expenses after you have paid out the deductible. Some Medicare supplement policies cover both the deductible and the co-payments.
There are several different Medicare supplement plans available, each with its own level of coverage. An insurance representative, such as from Senior Advisors, can help you decide which plan works best for you.