If you're new to Medicare, now is the time to start considering signing up for a plan if you are 65 or older. Open enrollment for Medicare Part A and B begins on Jan. 1 and runs through March 31 each year. Coverage will begin on July 1 for those who sign up during this time. You are eligible once you turn 65 and can sign up for Medicare plans three months before and after your birthday, leaving a seven-month period of eligibility. Missing out on this initial enrollment period could result in higher payments later.
What is Part B?
Medicare Part B covers medical necessities like doctor visits, services and preventative treatments. When you turn 65, you are automatically eligible for Medicare. For most seniors, signing up for Part A – which has no premium costs – is a no-brainer. If you are still employed and have insurance, however, you may want to refrain from signing up for Medicare Part B, which does require a monthly premium.
Part B typically covers clinical research, ambulance services, medical equipment, mental health treatment, some prescription drugs and second opinions before surgery. Part B also covers the services needed to diagnose a disease or condition. For preventative services, most seniors don't have to pay anything out of pocket with Medicare Part B.
How much does it cost?
If a senior signs up for Medicare Part A, then they are automatically enrolled for Part B. However, there is the option to refuse enrollment for Part B, though this could result in higher premiums later on. If a person does not sign up during their initial seven-month eligibility enrollment period, their premium will rise each year they subsequently don't sign up. The increase in price is permanent over the years.
There is a special enrollment period which allows a person to sign up for Part B without a late penalty if they deferred coverage because they already had insurance with an employer. The special enrollment period runs eight months after employment or health insurance ends – whichever comes first.
The cost for Part B will remain the same next year as it was in 2013, the Centers for Medicare and Medicaid recently announced. For 2014, the monthly premium will be $104.90. For most Americans, this is a very affordable rate for healthcare. The deductible will also remain at the same price from 2013 at $147.