You’ve likely been paying into the Medicare system your entire career. If you’re approaching retirement, you’ll soon enjoy the benefits that come from all those payments. Generally, Medicare is available starting at your 65th birthday, although some forms of coverage may be started later.
Medicare was originally implemented to cover hospitalizations. However, other forms of protection have been added over time. Today, Medicare offers a robust menu of options and choices, each of which covers different services and comes with varying premiums, deductibles and copays.
Many new retirees are overwhelmed by Medicare options. However, it’s important to review your choices and analyze your needs. By choosing the right protection package, you can minimize the impact health care has on your retirement assets.
Below are some common questions and answers about Medicare enrollment. If you haven’t yet planned your health care strategy, now may be the time to do so.
When should you enroll?
Medicare eligibility starts at age 65. However, you have a seven-month enrollment window that includes the month you turn 65 plus three months before and after.
You are automatically enrolled in Medicare Part A when you file for Social Security benefits. You’re also automatically enrolled in Part B, but you can opt out if you like. Enrollment in parts C and D are optional.
What coverage options are available?
Medicare offers a number of different types of coverage. The first is Part A, which is also known as Original Medicare. As mentioned, enrollment in Part A is automatic and comes with no premium. Part A covers hospitalizations and hospice care, as well as temporary nursing home and skilled nursing care.
Part B is an optional form of coverage that comes with a monthly premium. It covers doctor visits, ambulance transportation, some prescription drugs and equipment needed to treat specific ailments. Part B also comes with copays and deductibles.
Part C, also known as Medicare Advantage, is a program in which you can purchase a policy through a private insurer. These policies typically include all the coverage that comes with parts A and B plus additional protection for other treatments and services, such as dental, vision and physical therapy. There are many different types of Medicare Advantage plans, and each has its own set of premiums, copays and deductibles.
Finally, the most recent addition to Medicare is Part D, which covers prescription drug costs. Again, this is an optional program that comes with additional premiums. Given the high cost of some drugs, however, Part D could be a useful resource.
Will Medicare cover all your health care costs?
Medicare is a valuable benefit for retirees, but it doesn’t cover everything. In fact, it covers only a portion of most services. Other services, such as dental care or vision, aren’t covered at all. That means you could face significant out-of-pocket health care costs. In fact, Fidelity estimates that the average retired couple will spend $275,000 on out-of-pocket health care expenses.1
In addition to planning your Medicare coverage, you may want to develop a strategy for managing out-of-pocket expenses. Your strategy could include a health savings account, supplemental health coverage and even long-term care insurance.
Ready to develop your health care strategy? Let’s talk about it. Contact us today at DSM Financial. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
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