One of the biggest decisions to make in retirement is ensuring you have the health care coverage you need, when you need it. Medicare can be a complicated program to navigate and as you approach the time in which you can begin enrollment in the Medicare program, we thought we’d send along resources to make the process easier.
It’s helpful to understand the basics to choose the best options for your health and budget. With certain parts of Medicare offered by the government and other options available to purchase through private insurers, putting all the pieces of the puzzle together can be complicated. Here are the main features of Medicare to be aware of as you determine your needs and when you should opt into Medicare coverage:
Eligibility: Medicare is available to individuals ages 65 and older, younger people with certain disabilities, and those with End Stage Renal Disease (ESRD).
Coverage: The Medicare program is broken down into four main parts: A, B, C, and D. Each covers different areas of health care. Some plans are government offered and some are offered by private healthcare companies for a separate cost.
Enrollment Periods: Initial enrollment spans a total of seven months; the three full months before your 65th birthday, your birthday month, and the three months after. Unless you qualify for a Special Enrollment Period, failure to enroll at age 65 will result in a permanent penalty of 10% for every 12 months you could have enrolled but did not. There are also several general enrollment periods each year for specific purposes.
Premiums: While most don’t pay a premium for Part A, premiums for Part B & D are dependent on income, higher-income earners will pay escalated premiums. If you do not receive Part A for free, you will be responsible for paying a premium for that part, as well. You can click here to see Medicare premiums at a glance.
The particulars of Medicare can be intimidating and budgeting for this expense in retirement is crucial. We can help you create a plan that suits both your medical and financial needs. Please let us know what questions you have and how we can help!
Medicare 101: Understanding the Basics
December 01, 2020