Planning for Medicare

The prospect of planning for Medicare might not be the most exciting, but it's an inevitable task that cannot be overlooked. As you reach the age of 65, the decisions surrounding your Medicare benefits and supplemental options become paramount. Devoting time to comprehend your choices at this stage proves crucial in gearing up for the associated costs of Medicare.

Today, we’re going to provide you with insights into the workings of the Medicare program and how it’s relevant to your specific needs. Armed with fundamental information, you'll be better equipped to make informed decisions tailored to your situation.

The Parts of Medicare

Medicare stands as a health insurance initiative administered by the federal government, catering to individuals aged 65 and above, as well as those with specific disabilities and end-stage renal disease.

Medicare has three fundamental parts. We’re going to skip Part C now, but we’ll get to that later. For now, let’s take a look at the extent of coverage provided by its three basic components. The primary segments are:

Part A (Hospital Insurance)

• Encompasses care received during hospital stays or in skilled nursing facilities.

• Most individuals do not pay a premium for Part A.

Part B (Medical Insurance)

• Addresses expenses related to doctor visits, tests, and outpatient services.

• Generally involves a monthly premium payment for most beneficiaries.

Part D (Prescription Drug Coverage)

• An optional component providing coverage for prescription drugs.

• Typically has a monthly premium for most individuals.

Navigating Your Medicare Options

Progressing in the Medicare planning process requires a careful consideration of how you wish to receive your benefits. There are two primary avenues for obtaining Medicare benefits.

1. Enroll in Original Medicare (Parts A and B) and a Part D Prescription Drug Plan:

• Often complemented by a Medicare Supplement Plan (Medigap) to assist with out-of-pocket expenses.

• Provides flexibility in choosing healthcare providers.

2. Enroll in a Medicare Advantage Plan:

• Consolidates all Medicare benefits into a single, convenient plan.

• Most Medicare Advantage plans include Part D coverage for prescription drugs.

Both options come with their own set of advantages and drawbacks. While Medicare Advantage plans may offer lower monthly premiums, they often operate within specific networks, limiting the choice of doctors, hospitals, and pharmacies. Notably, Health Maintenance Organization (HMO) plans within Medicare Advantage may necessitate obtaining care within the plan's network.

On the other hand, Medicare Advantage Preferred Provider Organization (PPO) plans offer more flexibility in choosing healthcare providers, with the possibility of using out-of-network providers at a higher cost. Additionally, Medicare Advantage plans frequently provide supplementary benefits beyond what Original Medicare covers, such as limited routine dental and vision care.

Original Medicare Plus Medigap

Original Medicare provides a higher degree of flexibility, allowing for healthcare utilization wherever Medicare is accepted, which can be particularly advantageous for frequent travelers. When coupled with a Medigap plan like Plan F or Plan G, the potential to virtually eliminate out-of-pocket healthcare costs becomes a compelling incentive. Many individuals find the assurance of minimal back-end spending to be a significant appeal.

Medicare Supplement plans are optional, but we almost always advise our clients to enroll in one if they’re sticking with Original Medicare The one-time Medigap Open Enrollment Period ensures acceptance without the risk of being turned down or facing higher premiums based on health status. Delaying enrollment may subject individuals to medical underwriting, enabling insurance companies to deny coverage or impose substantially higher premiums, rendering the coverage financially burdensome.

Given that Original Medicare lacks coverage for retail drugs, individuals opting for Medicare with a Medigap plan typically also enroll in Part D for prescription drug coverage. While Part D enrollment is voluntary, prompt enrollment upon eligibility is recommended. Failure to secure prescription drug coverage from an alternate source may result in a late enrollment penalty, impacting monthly premiums for the duration of coverage.

Medicare Enrollment Timeline

As you approach the milestone of turning 65, a strategic timeline can guide you in securing the most suitable Medicare plan. Here are key steps to consider in the months leading up to your 65th birthday.

Six Months Before Your 65th Birthday

• Contact the Social Security Administration to verify your Medicare eligibility and make sure you have enough working credits to receive premium-free Part A.

• Start comparing Medigap vs. Medicare Advantage options.

• Ask your doctors which Medicare plans they accept.

Four Months Before Your 65th Birthday

• If you will continue to work past the age of 65, talk with your employer about how your group plan will coordinate with Medicare.

• Compare premiums and cost-sharing amounts for the Medigap and Medicare Advantage plans you’re considering.

Three Months Before Your 65th Birthday

• Apply for Medicare.

• Enroll in Medigap or Medicare Advantage.

• Shop for Medicare Part D plans (unless one is included in your Medicare Advantage plan).

• Look into any additional policies you may need, like long-term care, cancer insurance, dental insurance, etc.

One Month Before Your 65th Birthday

• Make sure you have all your Medicare ID cards.

• Give your new coverage to your doctors and pharmacy.

Need Help Planning for Medicare?

You don’t have to do all this alone. Enroll in Medicare with the help of Local Medicare Specialists. Our dedicated team will guide you through all available options, assist in enrolling you in coverage that suits your needs, and provide ongoing support for any Medicare-related questions, issues, or concerns.