Medicare and Your Retirement

​Health care is one of the biggest expenses most seniors have during retirement, so it’s important to understand the costs associated with health care. Budgeting for health care should be one of your top priorities and every senior should have a solid understanding of Medicare costs and benefits. Seniors should factor in Medicare costs when planning for retirement, and choose the Medicare plan that makes the most financial sense for you.

The two ways you can get your Medicare Insurance when you retire are: Original Medicare, Part A and Part B, or through private insurance such as a Medicare Advantage plan (Medicare Part C)

​Most people become eligible for Medicare when they turn 65. You can also become eligible if you have a disability. You may also qualify at any age if you have end stage renal disease requiring dialysis or a kidney transplant, or ALS (Lou Gehrigs’s Disease). You must be an American Citizen or a permanent legal resident of 5 continuous years.

Original Medicare

The premiums for Original Medicare, Part A and Part B are generally similar for most.

​Medicare Part A (hospital Insurance) is premium-free for most people (you are eligible for premium free Medicare Part A if you worked 10 years paying Medicare taxes). If you did not work 10 years then you can still have Medicare Part A but you will have a premium of either $259 or $471 depending on how much you worked.

Medicare Part B (medical insurance) requires a monthly premium. Your Medicare Part B premium can vary depending on your income for the last two years. If you are drawing Social Security, they will automatically deduct your premium from your social security benefits.

The standard monthly premium is $148.50 in 2021. Your premium could be higher than the standard if you made over $88,000 single or $166,000 filing joint on tax returns.

​Original Medicare covers medically necessary services such as surgeries, treatments of illnesses, and recoveries from illness, as well as some preventative care. You are responsible for paying certain out of pocket costs, premiums, deductibles, co-payments and coinsurance. It also does not cover prescription drugs, routine dental and vision care.

Medicare Supplement Insurance Plans

Medicare supplement (AKA Medigap) plans fill in the gaps of original Medicare. Medigap insurance plans are also available through private insurance companies and are meant to supplement your Original Medicare. The best time to sign up for Medigap is during your open enrollment period. This period is when you turn 65 or older and you enroll in Medicare Part B. During this time, you are also not subject to underwriting.

Premiums for Medigap plans vary by the Insurance company you choose, your location, and what type of plan you purchase

Medicare Part D (Prescription Drug Coverage)

Medicare Part D is optional but be aware if you don’t sign up when you are first eligible, you might have to pay a late enrollment penalty. This generally applies if you go without Medicare Part D for 63 consecutive days or more After your initial enrollment period ends. The premiums and costs for Part D will vary by location and which Insurance company you choose. This should be looked at every year during Open Enrollment (October 15 th through December 7 th ).

If you would like to compare plans give us a call. I would be more than happy to go over your options and answer any questions you have.