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My clients often report Medicare as the most confusing aspect of their retirement financial picture. With all of the options available through Medicare, just deciding on which coverage to elect can make one’s head spin.
Understanding the basics can help you feel more comfortable as you sort through the decision process. In this article, I’ll cover some of the main aspects of Medicare as well as providing some resources where you can learn more.
When can you sign up?
Most people will become eligible for Medicare at age 65 and can sign up as early as three months prior to their 65th birthday and as late as three months after. If you apply prior to the month in which you turn 65, coverage should begin the first day of your birthday month. Otherwise, your coverage should begin the month after you apply.
If you miss this initial seven-month window, you could have your benefit start date delayed and/or face additional costs.
Some people may qualify for Medicare earlier due to a health condition or disability, while others with group coverage through their employer might be able to delay applying.
What are the essentials on coverage options?
Part A
Medicare Part A covers hospital stays, some of the care you receive while in the hospital, and, in some cases, can cover a portion of skilled nursing and hospice care.
Part B
Medicare Part B covers some of what Part A doesn’t and includes some preventative and medically necessary services. Those can include doctor’s visits, blood tests, surgeries, and items such as wheelchairs.
Part D
Medicare Part D provides prescription drug coverage. Part D has a list of prescription medications that are covered and tiered pricing for those medications.
Part C
Medicare Part C is essentially an option that allows you to combine Parts A and B as well as the option to include Part D.
What are the costs?
Part A
While there is an annual deductible and some other potential costs, Medicare Part A is free for anyone who has worked (or who has a spouse who has worked) for 10 years (40 quarters). Those who have not worked for 40 quarters may pay a premium in order to get Part A coverage.
Part B
The premiums for Medicare Part B are based on your annual income. Click here to go to the Medicare website to view the 2019 pricing for Part B coverage.
As you might expect, you’d also have a deductible and some benefits for which you’d have co-insurance.
Part D
Medicare Part D’s costs will vary based on the plan you purchase, the medications you need, and where you go to get your medications. This area can be extremely complex and confusing. Make sure to fully evaluate your coverage options before you apply and understand your benefits before getting your medication.
Other Plans
Medicare Advantage plans and Medigap (supplemental) policies offer additional options to the standard plans. These plans can combine the coverage offered through Medicare and/or provide you with additional coverage to fill in some of the gaps in Medicare (deductibles, co-pays, and additional services).
Resources
You may want to start by contacting your State Health Insurance Assistance Program (SHIP). SHIP offers free assistance to help individuals and couples sort through their Medicare options. You can find your local office here.
You can also find additional information at the Medicare website.
UnitedHealthcare has a site with a PDF book and some videos that help explain the basics.
The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation. |
