Believe it or not, Medicare has become almost as complex as the tax laws of the IRS. The right to health insurance really confuses people from all walks of life.
In fact, the editor of Senior Patricia Barry’s American Association of Retired Persons said, “Humans are completely baffled by Medicare.” She should know as she researches and answers daily questions about Medicare.
A simple inquiry about entitlement can have multiple answers. For example, this sounds pretty straightforward – “Are you automatically notified when it’s time to apply?”
The answer – it all depends on your circumstances. Are you collecting Social Security benefits or have you been waiting for them? When you collect, you will be notified that you can apply for Medicare. Yes, Medicare and Social Security are linked but completely different claims!
The main point
Consider Medicare as a set of rules that you need to understand because they are unique. You have to adjust the rules to your own circumstances.
Knowledge of the rules is the key to solving the Medicare puzzle.
When you start solving a puzzle, you can sort the pieces by the type of the puzzle; Let’s say that you pick edge pieces and sort them by color. This is set up to simplify the solution.
The first step in solving the Medicare puzzle for you is understanding the terminology. Find a resource like Medicare.gov that has described Medicare Part A, B, C and D and terms like Medicare Supplemental Plan and Advantage Plans. Then your resource should put the term in context using an example.
It is a great help that Medicare uses common terms such as co-payment or co-payment, PPO and HMO. As you begin to understand the terminology, you will automatically start asking questions based on your own situation. Write it down else you will most likely forget them.
About a year before most people are eligible for Medicare, insurance providers send out emails, leaflets and brochures claiming to demystify Medicare for you. In my experience, this literature seems to be helpful, but it can further confuse the problems by pointing you to a specific product. And if you have not thoroughly researched your own situation, you do not know if the advertised product is something you need.
For example, suppose you know that you do not need a Medicare supplement plan because you can use your spouse’s insurance in conjunction with Medicare. Then, supplementary plans for advertising with the literature are useless for you, at least at this time.
What about Medicaid? While Medicaid and Medicare are often mentioned together, these are separate programs. Medicaid is income-based, not age-dependent and is administered by the states. The rules of each state, who is entitled and what is covered, are different. If you believe that you can qualify for both Medicaid and Medicare, it is imperative that you ensure you understand what is covered by each program and what it does not.
Both Social Security and Medicare can introduce a number of additional financial planning issues beyond the scope of this article.