Heading into retirement is exciting, but it can also be intimidating. This new phase of life brings about a unique set of challenges, with one of the most complicated being Medicare. Figuring out particulars, like when to enroll, what plans to enroll in and what coverage will be best for you can be overwhelming.
The following are four important things to know about navigating Medicare.
When to enroll
Perhaps the simplest enrollment occurs when you are already receiving Social Security benefits.
If you are already taking Social Security benefits, you will be automatically enrolled in parts A and B. You have the option to turn down Part B, since it has a monthly cost. If you keep it, the cost will be deducted from your Social Security.
For those not receiving Social Security, yet, you will have to sign yourself up for parts A and B. There is a seven-month initial enrollment period beginning three months before the month you turn 65 and ending three months afterward.
If you are working and have health insurance through your employer, or if you’re covered by your spouse’s employer coverage, you may be able to delay signing up for Medicare. However, be mindful that you will need to sign up for Medicare within eight months of losing your employer’s coverage to avoid significant penalties when you eventually enroll.
Options available through Medicare
Medicare offers several options, or parts, available to you for coverage. Parts A, B and D are the most commonly chosen.
Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care and some home health care.
Part B covers certain doctors' services, outpatient care, medical supplies and preventive services.
Part D adds prescription drug coverage to some Medicare programs.
Part C is another Medicare-approved plan available through insurance companies. These are called Medicare Advantage Plans.
Medicare Advantage Plans are health plan options that are approved by Medicare and run by private insurance companies. These plans often have networks, which means you may have to see doctors who belong to the plan or go to certain hospitals to get covered services.
What you will pay
For Part B and Part D, your monthly payment depends on your income level. Part A, which pays for hospital services, is free if either you or your spouse paid Medicare payroll taxes for at least 10 years. If you did not pay the Medicare payroll taxes for at least 10 years, you will still be able to take part in Plan A, but it will cost a monthly premium.
Part B and Part D have surcharges when your adjusted gross income is more than $85,000 if you are single or $170,000 if married filing jointly as of 2018.
For example, Part B, which covers doctor visits and outpatient services, will cost new enrollees about $134 per month if income is below these thresholds, and will increase if income exceeds these thresholds.
Part D, which covers prescription drug costs, also has a monthly charge that varies depending on which plan you choose.
Medicare doesn't cover all services
While Medicare is meant to be a wide-ranging health benefit for you in your retirement years, it doesn't cover everything. In fact, Medicare does not cover preventive vision, dental or hearing services. Because many seniors need these services, they enroll outside of Medicare to get coverage for these needs.
If you need supplemental coverage or have questions please contact Kellogg Insurance for help.