Medicare Enrollment Quiz

When you enroll in Medicare — or when you have the chance to change Medicare plans — can have lasting effects on how much you have to pay and the quality of coverage you receive.

Most people who switch Medicare plans are beneficiaries who are now using more health care and looking for plans that can provide them even more coverage, according to multiple studies from Deft Research, a market research firm that specializes in older adult consumers.

But finding the best Medicare plan can be complicated. There are a dizzying number of plans and options to choose from beyond Original Medicare. You have to do your homework to make sure you’re getting the best care for your money.

Medicare can be complicated, but these 10 simple steps can walk you through the most complex parts of Medicare enrollment.

Your Medicare plan’s costs and coverage change yearly. Comparing your current coverage with other Medicare plans each year during open enrollment may get you better coverage at lower cost.

Medicare has an initial enrollment period — when you first sign up for Medicare — then open enrollment periods when you can change coverage.

Your initial enrollment period is the seven-month period that begins three months before the month you turn 65 when you can sign up for Original Medicare (Medicare Part A and Part B).

If you miss your initial enrollment period, you can sign up during the general enrollment period running Jan.1 through March 31 each year specifically for people who missed initial enrollment. You can sign up for Medicare Part A and Part B, but you may have to pay a late-enrollment fee. Coverage will start July 1.

Medicare open enrollment periods themselves can be confusing because there are three different open enrollment periods, and two of them give you the chance to change your Medicare coverage.

Each one works differently. Here’s how each one affects you.

If you move or there are changes in your coverage, you may be eligible for a special enrollment period or SEP.

Moving is a common circumstance that qualifies beneficiaries for a special enrollment period. Because private insurers sell Medicare Advantage and Medicare Part D drug plans, they rely on networks of health care providers and may only have limited doctors, hospitals and pharmacies available in a given area.

Rules for each special circumstance vary. It’s important to talk with your plan provider or with Medicare to find out what the rules for your particular SEP are.

You can call Medicare toll-free at 1-800-633-4227 (TTY at 1-877-486-2048).

How Medicare Taxes Pay for Coverage

Medicare taxes are federal payroll taxes deducted from your paycheck. They pay for the Medicare Part A hospital insurance component. You and your employer each pay 1.45% of your income in Medicare tax. If you are self-employed, you pay the full 2.9% of the tax yourself.

Medicare taxes are sometimes bundled with your Social Security payroll taxes. They may show up together as FICA taxes on your pay stub.

The money you pay as Medicare tax goes into one of two Medicare trust funds. The Hospital Insurance Trust Fund pays for hospital, hospice and skilled nursing facility costs of people currently on Medicare.

A second trust fund — the Supplementary Medical Insurance Trust Fund — receives money from Congress and interest on the fund’s investments. It pays for Medicare Part B costs.

It’s important to sign up for Medicare plans when you are first eligible for them to avoid late enrollment penalties.

These penalties can raise your premiums and can have other financial consequences depending on the Medicare plan you choose.

Open enrollment periods are your opportunity each year to get the best bargain for Medicare coverage. You should review your options each year during open enrollment and look for the best plan for your needs and budget.

But more than seven in 10 Medicare beneficiaries never even compared plans during a recent open enrollment, according to a 2021 study by the Kaiser Family Foundation.

The study looked at beneficiaries during the 2018 Open Enrollment Period for 2019 coverage. Overall, 71% of beneficiaries did not compare plans. And the average was even higher for certain demographic groups.

It’s important to compare Medicare plans during open enrollment periods to make sure you’re getting the best coverage at the best price available.

A 2022 study published in the Journal of the American Medical Association Network found ‌that vulnerable populations tended to be subjected to high-cost or poor-quality coverage choices more often because of a lack of health care literacy help.

Further, they found that “annual review and comparison of coverage choices [were] associated with higher Medicare Advantage enrollment and choice of a particular Medicare Advantage plan.”

You have to choose between a Medigap and Medicare Advantage plan — you can’t have both at the same time.

Medicare Advantage plans are private plans that effectively replace Original Medicare. Advantage plans cover everything Medicare Part A and Part B cover — but they also offer other benefits. These commonly include built-in Part D prescription drug coverage and hearing, vision and dental benefits.

Medicare Advantage plans may limit your choice of doctors and hospitals. But more than 90% of doctors — other than pediatricians — accept Original Medicare.

Medicare Advantage plans also have maximum limits on your out-of-pocket costs. Original Medicare does not, but a Medigap plan can reduce them if you have Original Medicare.

Medigap are private plans that only work with Original Medicare by helping you cover out-of-pocket costs associated with Medicare Part A and Part B. Medigap plans won’t pay for things that Original Medicare does not cover, so they won’t pay for prescription drugs, vision, dental and hearing services.

It’s important to look past monthly premiums and consider your total out-of-pocket costs with different plans before deciding which plan is best for you.

While most Medicare Advantage plans include prescription drug coverage, you will have to enroll in a Medicare Part D plan if you want prescription drug coverage with Original Medicare.

You can add a Part D plan to Original Medicare during the initial enrollment period, the annual open enrollment period or a special enrollment period.

It’s important to compare your Part D plan each year during open enrollment to make sure the costs and coverage are the best you can find.

Also evaluate changes to your drug coverage if you have a Medicare Advantage plan. Medicare Part D and Medicare Advantage plans update their drug coverage each year and they may change the drugs they cover or the pharmacies that are in their network.

In many cases, you don’t need to enroll in Medicare while still working past 65 and have insurance through your employer or your spouse’s employer. You do, however, have to meet certain requirements to avoid late enrollment fees later on.

If you have Medicare and other health insurance — through an employer, a union, veterans’ benefits or other sources — Medicare will work with your other insurance to cover your health care costs.

Exactly how it works depends on the combination of plans and a process called the coordination of benefits which spells out which plan pays first. This order can affect your out-of-pocket costs.

There are three circumstances that allow people to receive Medicare before they turn 65. These include having a disability, End-Stage Renal Disease or ALS (Lou Gehrig’s disease).

Social Security, not Medicare, determines when people are eligible for SSDI coverage.

Those insured through the Railroad Retirement Board should also contact Social Security rather than Medicare to find out if they are eligible.