Medicare options

Common Questions and Answers About Medicare Enrollment

If you’re approaching retirement, you likely have some big milestones ahead. One of the most important may be enrollment in Medicare. You’ve been paying into Medicare your entire career. Retirement is your opportunity to finally benefit from those contributions.

Medicare is a valuable service that extends medical insurance to retirees. It is generally available starting at your 65th birthday. Originally, Medicare simply provided coverage for hospitalizations. Over time, however, the program has become more robust and complex.

Today’s retirees face a wide range of choices and benefit options. Some come with added protection but also additional premiums. You may find it helpful to review your options 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?

You are eligible for Medicare benefits when you turn 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 at this time. Part A covers hospitalizations and comes with no premiums.

However, you are not automatically enrolled in Part B or any of the other optional Medicare programs when your turn 65. If you fail to enroll in those programs, you may have to wait until the next open enrollment period. That could leave you temporarily exposed to high out-of-pocket health care costs.

What are the various coverage options?

Medicare offers a number of different protection programs. First is hospitalization coverage, known as Part A. Another popular option is Part B, which covers doctor visits. Part B has premiums and is offered in a variety of levels, each with its own copay and deductible.

Part C is often referred to as Medicare Advantage. It’s 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. Premiums, copays and deductibles vary with Part C.

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 costs 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 a comprehensive retirement strategy? Let’s talk about it! Contact us today for a free initial strategy session. We can help you analyze your needs and develop a plan.

 

1 https://www.fidelity.com/viewpoints/retirement/retiree-health-costs-rise

 

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