Medicare coverage is vital in retirement. It helps cover the costs of medical expenses from doctor visits, hospital stays, prescription medications to home health care. It is difficult to navigate. There is Part A, Part B, Part D, Plan K, traditional, Medicare Advantage and more to understand. One tiny blog post won’t scratch the surface. What we can cover are some little known facts that you can use to help you make your decisions. Our goal is to encourage you to do your research early before you are eligible so you can make the decisions that best fit your plan.
Medicare premiums are not free. For most people, Medicare Part A premiums are free. Part A helps cover for inpatient care in hospitals, skilled nursing and/or some home health care. There is still Part B, Part D and perhaps Medigap insurance to budget. It’s important to plan early how you will pay for your premiums and your health care.
Something a lot of us don’t consider is taking care of our health while we are able to reduce the costs of healthcare as we age. Exercise, healthy eating, getting productive sleep and managing stress are effective ways to reduce costs and improve our enjoyment of retirement.
There are specified enrollment periods for Medicare and if you miss them, you may pay a monthly penalty for the remainder of the time you have Medicare. This topic is full of exceptions and caveats, so the best bet is three to six months before you reach age 65, start your research for the Medicare option that best suits you. Let me stress here that even if you continue to work and are covered by your employer for your health care, begin your research prior to turning age 65. You want to make sure you make good decisions about coverage, about COBRA and when you are eligible. Failure to understand how all these plans work together may result in a coverage gap and/or a penalty that just isn’t necessary.
You cannot decline Medicare Part A if you are receiving Social Security Benefits. One reason this is important is the relationship between Medicare and HSA accounts. Depending upon when you elect or are assigned Medicare Part A, you must discontinue contributions to your HSA account to avoid tax penalties. And determining when to stop is not straight forward. For example, if you work past age 65 and do not sign up for Social Security and Medicare until after the month you turn 65, you want to discontinue your HSA contributions 6 months prior to signing up for Medicare.
Confused? No need to worry. It’s a lot of information, a lot of exceptions, but you’ve got this. Speak with your advisor. Contact the Social Security Administration. Medicare.gov is a valuable resource and fairly easy to navigate. There are lots of experts willing and able to help you. Just remember to begin planning early.