Most of us start dreaming of retirement when we’re still young. We long for the days of no work and all play. But what we don’t think about is all the healthcare expenses we’ll encounter when we finally get to retire. According to the Urban Institute, if you’re currently in your 40s, you can expect to spend more than $300,000 on healthcare expenses during retirement. Ouch!
While that might be a hard pill to swallow, know that you can plan for (and even prevent) some healthcare costs if you know more about what you’ll be getting into. That’s why today, we’re going to address seven of the most common Medicare questions we get from our clients.
Yes. Everyone begins their Medicare journey by enrolling in Original Medicare, which consists of Part A and Part B. Next, they’ll usually choose a Medigap plan or Medicare Advantage.
The common misconception we hear is that people think that once you enroll, you’re stuck with your choice for life. That’s not entirely true. Sure, there are some rules that will dictate when and how you can change your Medicare plans, but you won’t be locked into your decision forever. This is especially true within your first 12 months of enrollment. If you enroll in Medicare Advantage, you’ll have a 12-month trial right period. If at any point during this time you would rather go back to Original Medicare (with or without a Medigap plan), you can do so with no questions asked.
Once you’re enrolled in Medicare, you’ll have two enrollment periods per year during which you can make changes to your coverage. The Annual Election Period (AEP) runs from October 15 to December 7. During AEP, you can change Medicare Advantage plans, enroll in Medicare Advantage for the first time, or switch back to Original Medicare.
If you are already enrolled in Medicare Advantage, you can also make a change during the Medicare Advantage Open Enrollment Period, which runs from January 1 through March 31 each year. You may switch to a different Medicare Advantage plan or back to Original Medicare during this time.
You may even have access to a Special Enrollment Situation if you’ve had life-altering events happen. Talk to your Medicare advisor about what’s going on in your life and find out if you might be eligible for an SEP.
No. But that’s an easy assumption to make, isn’t it? When we know Medicare is supposed to help us in our older years, it would make sense that it would cover long-term care. However, that’s not the case.
Most people who reach the age of 65 will need long-term care services. Generally speaking, people usually need these kinds of services for two or three years. Sadly, the cost of long-term care is astronomical. The average semi-private room costs about $7,000 per month!
You have several options when it comes to planning for these costs. You can build those costs into your retirement savings plan, or you can invest in long-term care insurance. Long-term care insurance is a great option and can be very affordable if you plan ahead since most rates are based on your current age.
Your retirement date may not correlate with your Medicare enrollment timeline. While you can retire at any age, you cannot get Medicare until you turn 65 (unless you have a qualifying medical condition). If you decide to retire prior to age 65, you’ll need to look for other health insurance until you can enroll in Medicare.
It is important to know when you’re eligible to enroll in Medicare so that you can avoid late-enrollment penalties. Unless you have creditable coverage, you’ll need to enroll during your Initial Enrollment Period (IEP), which is a 7-month window around your 65th birthday.
Your Medicare advisor will create a customized enrollment timeline for you to ensure you enroll on time and avoid any fees.
Medigap plans are excellent investments. They allow you to have secondary coverage, with Original Medicare acting as your primary. Medigap plans were designed to pick up some or all of the costs that remain after Original Medicare pays its portion.
That does not mean they cover everything. First, they only cover things that are also covered by Original Medicare. If Parts A or B don’t approve a service, it won’t be approved by your Medigap plan. Second, the costs they pick up will depend on which Medigap plan you have. For example, Plan F picks up everything, but Plan G will leave you with the Part B deductible.
Yes and no. You can apply for a Medigap plan at any time of the year. You don’t need to wait for certain enrollment periods. However, the insurance company does not have to guarantee your acceptance into the plan.
Every Medicare beneficiary has a one-time guaranteed enrollment period when they first enroll in Medicare. You will have a 6-month Medigap Open Enrollment Period that begins on your Part B effective date. During those six months, you can choose any Medigap policy that’s available in your state. You won’t be asked any health questions, and you won’t pay higher premiums based on your medical history.
Outside of that enrollment period and the 12-month trial right we mentioned in the first question, you won’t have guaranteed rights to a Medigap plan. This is why so many people say you can never switch your Medicare plan. As long as you’re relatively healthy, it’s no problem at all. However, if you have serious health concerns or severe chronic conditions, you may not be able to get a Medigap plan.
Nope. Medicare is very different than your typical employer-sponsored health plan. Most group and individual plans have a maximum out-of-pocket on their plans. That means that you’ll only be responsible for costs up to that amount. Medicare does not have that luxury.
This is the prime reason we recommend our clients enroll in either Medigap or Medicare Advantage. Both of these options will put a limit on what you could pay during the calendar year, making your healthcare expenses much more predictable.
We’re afraid this answer is also “no.” Original Medicare does not include coverage for routine and preventive dental, vision, or hearing care. When it comes to major services like cataracts, glaucoma, and macular degeneration, you will have coverage. However, dental cleanings, eyeglasses, and hearing aids will not fall under Medicare coverage.
Since Original Medicare does not cover these things, neither will your Medigap plan. However, if you decide to enroll in Medicare Advantage, you may have some extra benefits. Most Medicare Advantage plans include preventive care in these three areas, which is just one reason the plans are so popular.
If you don’t have a Medicare Advantage plan with these benefits, you can also enroll in a separate Dental, Vision, Hearing (DVH) policy.
Schedule a FREE Medicare plan consultation with an agent in your neighborhood.
LocalMedicareSpecialists.com is privately owned and operated by LMS Insurance LLC. LocalMedicareSpecialists.com is a non-government resource for those who depend on Medicare, providing Medicare information in a simple and straightforward way.
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area which are United Healthcare, Aetna, Humana, Cigna, Blue Cross Blue Shield of Arizona, Centene, Devoted, and Scan. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.