If you’re becoming eligible for Medicare or already have it, knowing how it works can make all the difference. There are several Medicare plans available allowing you to custom-fit your health insurance to fit your life and needs.

Here are seven simple steps to help you get the most out of Medicare and make the best choice for you.

1. What is Medicare and what does it cover?

Medicare is a federal health insurance program for qualified people. The program helps with the cost of care, like private health insurance, but doesn’t cover all expenses.

You generally qualify for Medicare if:

• You’re 65 or older
• You’re a U.S. citizen or permanent legal resident
• You (or your spouse) worked and paid Medicare taxes for at least 10 years
• You have a certain disability or condition

Before you can pick a plan and benefits, you need to know about the different parts of Medicare. Here are the basics: 

• Part A: Pays for hospital stays, skilled nursing care, hospice, and some home health services
• Part B: Pays for outpatient services like doctor visits, lab tests, screenings, and medical equipment
• Part C (Medicare Advantage): Combines Parts A and B into a single plan offered by private insurers. Many Medicare Advantage plans include drug coverage (Part D).
• Part D: Covers prescription drugs

Understanding the basics of Medicare and what it covers can help you make better choices when you compare plans or look at extra benefits. 

2. Explore your Medicare coverage options

Each of the Medicare parts covers different care and services. You can choose which parts you’d like to sign up for. You can even combine different parts to make your custom plan.

Here’s a simple overview of what each part and plan covers:

• Original Medicare (Parts A & B): You can visit any doctor that accepts Medicare. The plan does not include drug, dental, or vision coverage.
• Medicare Advantage Plans (Part C): This is a plan that includes Parts A and B through private insurers. These plans often include prescription drug coverage and extra benefits but may limit you to a provider network.
• Part D: If you choose Original Medicare and want to add-on prescription coverage, Part D standalone plans are available.
• Medigap: If you choose Original Medicare but want extra help paying for copays and coinsurance, Medigap plans are available to purchase to help offset those costs

Original Medicare and Medigap plans do not include Part D coverage.  Most Medicare Advantage plans will include Part D. 

See all of the Medicare plans and options on the Medicare website.

3. Be aware of Medicare enrollment periods and potential penalties

There are specific timeframes you can enroll in Medicare each year. Signing up on time matters.

Here are the important milestones to keep in mind: 

• Initial Enrollment Period (IEP): Starts three months before your 65th birthday, includes your birth month, and ends three months after. If you don’t enroll, you may experience Late Enrollment Penalties (LEP).
• Annual Election Period (AEP): October 15 to December 7. You can join, drop, or switch to another Medicare Advantage plan.  You can also switch from an Original Medicare plan to a Medicare Advantage plan and vice versa. This enrollment period also applies to drug coverage plans.
• Open Enrollment Period (OEP): Jan 1 - March 31 each year. You can make only one switch during this period. You may switch to another MA plan or drop your MA plan and return to Original Medicare and join a separate Medicare drug plan. You may not switch from Original Medicare to a Medicare Advantage plan. You cannot join a separate Medicare drug plan if you have Original Medicare, and you may not switch from one Medicare drug plan to another if you have Original Medicare.
• Special Enrollment Period (SEP): Available when you have a coverage change, move, or encounter a qualifying life event to switch plans. You can find the details of SEPs on the Medicare website.

4. Keep track of Medicare out-of-pocket costs

Even with Medicare, you’ll still pay some out-of-pocket expenses. Understanding these in advance can help you better budget and choose supplemental coverage if needed. 

Premiums 

Premiums are the monthly payments you have to make for health insurance coverage. You can expect to pay a premium for Parts B and D, and possibly Part A if you don’t qualify for premium-free Part A. If you elect to enroll on a Medicare Advantage (Part C) plan, you may have a monthly premium for that plan. But keep in mind, Part D is usually included in that cost.

Deductibles

Deductibles are an amount you have to pay for covered services and items each year before Medicare or your plan starts to pay.

Copays

Copays are a fixed amount you pay for a Medicare-covered service. These may apply to standard office visits, hospital stays, emergency department visits, and more.

Coinsurance

Coinsurance is the percentage of the total cost for the service that you pay. In Part B, you generally pay 20% of the cost for each Medicare-covered service.

5. Use in-network Medicare providers

If you’re enrolled in a Medicare Advantage Plan, using in-network Medicare providers will help you lower your out-of-pocket costs. Part C plans often have a specific network of doctors and hospitals. If you go out-of-network, you might pay more or the entire cost.

Be sure to check with your insurance agent before making an appointment with a doctor so you won’t be surprised with a bill later.

6. Look for ways to reduce Medicare drug costs

Prescription drugs can be expensive. But you can take steps to lower your Medicare drug costs. Regularly review your Part D plan during the Annual Enrollment Period to help you save money. You should also: 

• Request to be prescribed generic drugs when possible since they are typically less expensive than brand-name drugs.
• Review your plan’s formulary to ensure your medications are covered.
• Use pharmacies that offer lower costs.
• Apply for Extra Help if you have limited income. You may qualify for assistance with drug costs.

Visit SSA.gov for more information on EXTRA HELP.

7. Take advantage of free preventive services

Medicare offers many preventive services at no additional cost. These may include annual wellness visits, certain preventive screenings, and certain vaccinations

These services can help detect health issues early and may improve your overall well-being.

The more you understand how Medicare works, when to enroll, and how to manage your care, the better your coverage will work for you. For more information about Medicare or Select Health Medicare, call toll-free at 855-442-9940 (TTY: 711).